Raising Cane's Founder and CEO forgo salaries to keep employees amid COVID-19 crisis
BATON ROUGE- The founder of Baton Rouge's original Raising Cane's was featured in Forbes after leading the company to 500 units and $1.5 billion-plus in sales, then sharing the wealth in a time of need.
Starting the business from the ground up in 1996, Todd Graves has proudly provided the fan-favorite chicken strips to customers across the nation for 24 years.
As Raising Cane's prepared to mark that 500-unit milestone just last month, the company announced a new restaurant partner program, offering its partners stout financial incentives.
With the ongoing coronavirus crisis, the momentum has come to a screeching halt, Forbes says. Sales are down by about 25%.
The company shifted its priorities much like its peers. For Graves, those priorities are keeping everyone safe and making sure no team member is laid off.
Graves is forgoing his salary during the crisis, along with his co-CEO, AJ Kumaran, to avoid laying off employees during this difficult time. Graves calls the decision a 'no brainer,' and the company, like many in the industry, has also drawn down its credit lines.
If Raising Cane's can keep its sales declines at that 25% number and no higher, Graves says the company should come out on the other side of this with its employee base fully intact.
“We’re down 25%. We’re losing money and living off our credit line, but if we can keep it at 25, we can last longer,” he said. “If we get to 30 to 35%, we’ll have to start burning more cash and look at salary cuts and take other measures, but our goal is to come out on the other side of this with the crew we started with and we are all motivated to do that.”
The founder expects to see sales recovering starting in June and back to "pre-virus levels" by late July.
With the virus being swift, relentless, and unpredictable, it is hard for Graves to predict.
“I’m human and our business runs off of math, so things can change,” Graves said. “Our thing is no crewmember left behind and we will work our butts off to get there.”
The Baton Rouge, Louisiana-based restaurant grew to nearly 28 restaurants by 2005 when Hurricane Katrina hit. Out of those restaurants, 21 closed, which was a disaster that helped the business owner prepare for the COVID-19 pandemic. Graves began putting a coronavirus plan into place when Starbucks began closing in China earlier this year, Forbes says.
“It was obvious it would come here, so we started our initial prep early and that included drawing down on our credit line. I’m battle-hearted from Katrina and what we went through and that’s why we drew down on our credit line four or so weeks ago because you need to do all you can do to preserve cash in a time like that. The interest you pay is worth it in the long run,” Graves said. “Katrina taught me a lesson of how bad things can get in a big crisis and we’ve been able to get through this so far from those lessons.”
Graves says the company is fortunate to have a drive-thru format to keep 75% of the business going.
He also says the company is doing more broadcast and zone cable TV advertising in places they have never advertised before, and less radio ads.
"Our grassroots efforts have been aggressive–banners, letters to the editor, social media, everything we can think of to let people know we’re still open because we have to drive sales to keep the business open,” Graves said.
Emotions run high in times of crisis when trying to keep a business open, working long days and nights, making endless calls, Graves said.
"I am on calls constantly with operators telling me how the crew is being so friendly to everyone because they know people are being laid off and going through a hard time. That’s put some wind in my sails. Our operators are working so hard to keep the lights on and that has inspired me, too.”
Although Graves expects the challenges to linger in the near term, he is trying to focus on the things he can control, like working hard and keeping the customers and crew safe.
“I can’t control what happens next week, or if sales go to 50% or lower, or how we will rebuild right now. I am focused on two goals: serving the public safely while keeping our crewmembers safe, and keeping people employed,” he said. “I started this business from scratch. It’s a part of me. This is my family. I don’t want to leave anybody behind.”
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