Advice Line with Todd Graves of Raising Cane's

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This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. And if you're building something and you need advice, give us a call, and you just might be the next guest on the show. Our number is 1-800-433-1298.

Leave us a one-minute message that tells us about your business and the issues or questions that you like help with. Alright, let's get to it. Joining me today is Todd Graves, founder of Raising Kane's Todd. Welcome back to the show.

Hey Guy, how you doing? Great to have you back. You were first on the show a few years ago in 2022. A lot of people ask me, what's your favorite episode of the show?

I don't have one because I love all my kids, but I do cite yours often because it was so funny and fun. And I think you remember that. Do you hear from people about that episode? Not again?

Oh, I do. All the time. Yeah. Of course, it was so funny.

If you guys haven't heard that episode, go back and listen to it. It's so good. And we'll put a link to it in the show notes. The story about how you had this dream of fried chicken joint in Baton Rouge where you grew up and you couldn't get a loan, so you worked in oil for fineries and in commercial salmon in Alaska.

And you basically saved enough money to open the first restaurant and then, you know, took a while. But of course, today, it's just an unbelievable story. I read that this past summer of 2025, canes surpassed Kentucky fried chicken as the third largest chicken quick service restaurant in the U.S. Yeah.

You know, I grew up with KFC chicken. Right. It's a chicken. In the kernel, in the red, white, straight buckets, and you know, just all of a sudden you're like, wow, you know, it just blows you away.

You're bigger than the kernel. It's also really interesting, too, our unit count. You know, we only have a thousand restaurants and looking at the average unit volumes. It's kind of a different way to grow, right?

We just not have this mass volume, but having the highest of the highest average unit volumes per restaurant that really adds up. So anyway, sometimes I've hit you and I told the team, let's enjoy it. Yeah, let's do it for a minute. I bet.

I mean, you know, one of the things I think that you guys have done well and smartly is you've got kind of a hybrid model. You're not, I think mainly corporate owned locations, but you do have some franchises and I think overseas, they're mainly franchise. That's harder because you've got this quality standard, right? It's easier in a corporate owned store, but when you've got a franchisee, it's a different ballgame.

So what are the ways you're able to, or you guys focus on maintaining those standards when it's, it's not you guys were directly controlling it. Yeah. You know, it's number one is picking a good partner, obviously, right? You're gonna have a franchisee, basically you're licensing the brand package.

You know, they know how the training, the product knowledge, all those things, but it's their business and they're running it. So picking the best franchisee is so clutch. Yeah. So let me give you an example, Muhammad al-Shaiah al-Shaiah company in the Middle East.

That's my partner. I've been a partner now for over 10 years. Yep. I courted we talked about Muhammad and I talked for two years before we did something.

We got to know each other, we mystery shopper each other's brands, right? Look, I spent weeks at the time over in the Middle East in the different regions, seeing all the brands that his team ran. And that's all the same thing. I do it.

You know, happy, happy people give him good customer service selling good product, integrity, brand standards were handled well. Yeah. We've had no problems. Now, doesn't mean we haven't made mistakes, but we can work together to make them better because they were the right partner.

Yeah. You know, one of the things I'm sure you're asked this all the time, we are too. It's just like, well, what are you going to change? What are the radical things you're going to do?

It's a common question. It's a good question. People often ask. And one thing that I think a lot of people fail to recognize is consistency, especially when you've got a strong brand.

It's critical, right? It's actually oftentimes better to double down on what you do well. And I know you started in and out in our interview. In and out was an inspiration for you because they did a very simple thing.

They've been doing the same thing for whatever 50 plus years, you know, very minor modifications like the double double, right? And you walk into a canes. It's got the one love. It's got the lemonade and the soda fountain.

And it's got a very simple menu. So when people say to you, Hey, Todd, what are you going to do next? You're going to introduce tacos, you know, chicken tacos and stuff. And you guys going to do like chicken cheese dip things.

What do you say? Yeah. I mean, look, I don't get as much as I used to. But man, just from starting out and going through, even though our sales were the highest unit volume.

So it's literally us and Chick-fil-A. We blew away. Everybody's suggestions still kept coming in. Knowing from my core and having, you know, seeing restaurants that do very well.

You know, and staying true to that has had so much to do with our success, right? Because the so-called experts will tell you to end the food industry. You're going to have to change. You're going to have to add spicy, spicy chicken.

Right. People are going to get tired of this and you're going to have to have the variety and then look when the success of national hot chicken, like in Dave's chicken, you know, going all over the country, the world, you know, even bankers will be like, well, you're considering a spicy alternative. I'm like, no, we're not considering a spicy alternative because our concept is quality food, quality, craveable food served with fast food, speed and convenience. You know, from speed, if you add choices and you add people thinking they're, I know, you know what?

I do want spicy or I do want this. It's going to add a second or two. Second or two adds up. It adds up to a lot of profitability because as many cars you can get through, they're on low, low margins and high volumes, which you do.

Now, let's also think about quality. I have a cooked order process, just like in an outburger, right? You walk in an outburger, you see that grills filled with those burger patties and they're selling that product. Now, if it's slower in the day, you might actually put that raw beef down and start cooking.

Same at caps, right? If you're the first one a day, you're going to wait for five minutes. But when we pick up volume, we're in the cook orders process. We don't have heat lamps.

We're selling that food. It's going out hot and fresh, right? Yeah. It's going to be spicy.

I've got two things to cook. You would start doing what the other quick servers do. They start cooking food, holding it in warming bins and assembling it to orders what they do. So my quality and my speed would go down.

So knowing I don't want to be all things to all people, because if you try to be all things to all people, you're not really going to serve any of them very well. Knowing that and staying disciplined to that is what's important. I think that's right. I think in a world where there's infinite choices, having fewer great choices is actually an advantage.

I think of Trader Joe's. They have 3,000 products compared to Walmart, which has 200,000 products in their grocery. And I think people see a Trader Joe's peanut butter and it's like a creamier crunchy. They don't need like 15 different kinds.

They know that other weddings have been done for them. And that's why they're doing 16 billion revenue a year. Agreed. You know, it's a natural human condition to keep changing evolution and growing.

It's just like if you're doing something really well, you know what would make it even better. I mean, look, it's just for young entrepreneurs staying focused is so clutch. It's so key. Knowing what you're good at and doing that and focusing your efforts on that is what will make it successful.

So like I was telling you me specifically is like not having all these different LTOs, limited time offers, right? I've sort of saved menu for 29 years, almost 30 years. If I had LTOs, which might spike business for a tiny bit, right, something new at Keynes, my managers would have to like then be putting up point of purchase materials, getting training everybody on how you cook this one thing during this small period of time. And it would wear them all out.

Then my customer service would go down because the crew members are a little bit frustrated. And we wouldn't be doing what we do great every day consistently by adding different things to that. So we say menu serve for 30 years, good, creable food and good customer service. I love that.

And it's so counterintuitive today because we've done brand. We've done awesome brands that do drops. Okay. It's gimmicky.

It's like that's a thing that marketers and social media people that you got to do these drops. You got to be on social media and Instagram. Hey, this week, we're going to do a raising Keynes, you know, whatever chicken rolled in Doritos. But the thing is you're right.

It's like that might get you hype for a couple weeks, but it's not. It doesn't necessarily bring in the repeat customers. That's what matters. Actually, that kind of be great rolling in Doritos, crispy Doritos.

If you do that, I want my name on that product. You wanted to worry about that. Anyway, you ready to take some calls? Yeah, be fun.

Alright, let's bring in our first caller. Welcome to the advice line caller. Tell us your name where you're calling from and a little bit about your business. Hey, guy.

Hey, Todd. It's Evan Slad's here. I'm out here in Tolar, Texas, and I'm the owner of Whiskey Morning Coffee. Evan.

Yes, sir. Evan, how you doing, man? Doing good. Tell us a little bit about the business, just a line.

Yeah, so pretty much we're a flavored coffee company that uses non-traditional ways to flavor, such as bourbon barrels, barbecue smokers, things like that. I love that. Welcome to the show Evan. Thanks for calling in.

Alright, so do you know, many years ago we had Howard Schultz on the show and then I went up to Seattle to the roastery there with him and he gave me, this is like 10 years ago, gave me a whiskey flavored Starbucks coffee. It was so good. I still remember it now. So I love this idea.

How did you get into this business? So I'll be honest, we grew up like drinking Folgers in community. So the last thing we thought we'd be doing is coffee. Folgers at the church, like through the big coffee, whatever, percolators?

Yes, sir. But my granddad, he's an old moonshiner, so we have a family distillery. So we grew up making whiskey and bourbon, still do that. And I had to start a business in college at TCU and said I could get a hold of some bourbon barrels and another kid said he knew how to get a hold of coffee beans and we just started aging it in our apartments and roasting it out in the parking lot.

So how did a guy like you who grew up on Folgers crystals or whatever in kind of small town, Texas, did you get into where you into coffee? Oh, no. We didn't know nothing about it. We drank it every day.

That's for sure. But yeah, we made our first coffee roasters, got some barbecue pits from tractor supplies and welded up a drum and definitely just learned by failure. That's for sure. How did you know that whiskey barrels was going to make coffee taste delicious?

We didn't. We heard from a guy that if they keep the coffee in the bar lap too long, it'll start to taste like bar lap. So that was the only research we had really done. Yeah, we got 320 bucks as a group from the class and we bought green beans off of Amazon and aged it and luckily people around school bought it.

How long ago was that? That would have been 2018 senior year. Okay. So tell me where the business is now.

Do you guys have a store? Do you guys have a shop in? Are you in total or Texas? Yes, sir.

So really right now we're mostly online e-commerce. I'm direct to consumer. We do a lot of events and trade shows as well as roast for other coffee companies or coffee shops now. It's still me and three buddies.

So there's four of us on the team full time. Last year we did about 924,000, which is crazy. Wow. That's amazing.

So what percentage of your business is roasting and what percentage of your business is selling beans? So we're about 60% direct to consumer from the website, whether it be subscription or just one time purchases. The remaining 40%, that's either what they consider total roasting for other people or coffee shops or events. That's a great business.

You got a nice, diversified business. Okay, before we dive in more, what's your question for us? So my question is we're seeing to be stopped, stay when it grows and we kind of looked at what we're good at. And it's definitely the customer service, small town deal, word of mouth.

And what we're starting to do is build these mini drive through coffee shops and small towns that, you know, your seven brew and Dutch brothers aren't going to. You haven't done this yet. This is your idea. We're building out our first one right now that'll open in March.

In Tolar, Texas. In Grandberry, which is same town pretty much. Okay, I'm looking at the map. I see it.

So you guys are like an hour or half hour out of Fort Worth. Yeah, so it's going to be different because, you know, for us to build our stands, it's going to cost about 150 grand for all the equipment and buildings. It's going to be ran by one to two people. And we're trying to figure out, as we start to grow, is there an advantage to franchising and partnering with other influential people in these small towns?

Or should we look to grow kind of as our own and grow slowly? Oh, man, you've come to the right place with Todd Graves Todd. I want to bring you in. Do you have any questions for Evan or thoughts?

Yeah, Evan. So when you just said 150,000, that is, that's all in. That's building equipment, everything you need to open up. Yes, sir.

Besides the land. Got it. So you made your ground lease in the land? Yes, sir.

The first one where we purchased it. Okay. So you're actually building a drive-thru location. Yes, sir.

They're kind of like these modular buildings you're seeing popped up, but a lot smaller scale. So it's going to be about 16 by 20. Okay. Okay.

And drive through only. And espresso drinks too are just like more like Dutch brothers. So it's going to be espresso drinks and it's going to be Tex-Mex. So the only food is going to be tamales.

Oh, okay. Food too. All right. Something different.

It's actually kind of funky. I kind of like it. It's espresso drinks and tamales. For you, what are you estimating your sales will be at this first unit?

We're hoping to do about, I think we're going to try to get about $1,500 to $2,000 a day in revenue. And we're basing that off of other coffee shops that we supply beans for in similar locations. That seems a little high to me, Todd. It is.

But he's basing it off of other drive-thru sales with other coffee shops they're selling to. It sounds like a lot of coffee drinkers in your part of Texas, man. Yes, sir. They do early in the morning.

And then throughout the day, are you basing your sales off the tamales sales too or no? Yes, sir. We sell tamales at the distillery. So that's kind of taking information from ourselves at the distillery in Christmas orders, things like that.

Sure. Well, it sounds a lot of me too, God. But I think the normal Starbucks will be doing a lot higher than that every day, Dutch brothers, et cetera. So I think that could be achievable.

And then just real quick on your margins, last thing I'll ask you, do you have financial projections and what your calls of goods sold margins will be and what you think you'll make on the bottom line? So I don't have all of that figured out. I've got the coffee market's kind of crazy right now. Yeah.

Oh, yeah. So that works changing every day. Yeah. I'd be going to do some financial projections, right?

You can get those models just looking to Google it. But I'd look at that and your labor, your things like that. It's more opening because you'll know where you're tied about and where you need to work on to be profitable. Because that's the first thing you have to do is, man, you got to cash flow.

Because the quickest thing out there, if you bought this property, you've got $150,000 and I don't know if you're paying cash or you're financing that. But you're going to have payroll. You're going to have vendors to pay. You're going to have all those things and those payments don't stop, right?

So being profitable right now, the Gates is very, very important. I made 30 bucks in my first month, which was pretty funny, right? But what that meant is I could pay everybody and I wasn't going further in the whole. And then God, I don't know if you can answer the franchising question on this perspective.

I have some thoughts, but I know I'd love to hear your thoughts on it. You've done this. Yeah. The first way is to grow your business, right?

And the first way to grow it is at your mother's ship, which I call the first-raising pains, right? You're opening your mother's ship and learning the business inside and out while you do that. That will be your plan. And then if it's something that's profitable, it can be replicated, then you've got to look at growth.

And you can grow three different models. You can grow all company restaurants. You can grow all franchise restaurants. Or you can do a mix of both.

Now, I wanted to do a mix of both when I started. So I liked running my restaurants. I felt like I could run my restaurants very well. I like hiring people, bringing them to have new jobs.

I like teaching them how to become managers and lead and earn people's money. It's a calling for me. And then I wanted to do that. And I couldn't grow quicker without using franchisees, in my mind, because one, I couldn't have that much access to capital.

There was only a certain amount of money I could borrow from the banks. These franchisees had their own money to grow. And it wasn't for me about being debt-averse. I'm not.

I would take all the debt. I just didn't have the capacity. So franchisees served like a grow. And the second thing was I thought that the franchisees got picked really good restaurant people that they would actually be better in their community being right down the road while the restaurant then I would.

And so I went that route and I had exceptional franchisees. And we grew company restaurants as quickly as quickly as much money as we get lent. But over time, I saw that the franchisees didn't run their restaurants as good as I did. Okay.

And so we'll say 100 point scale. If we're running our restaurants at 95, which is like, just, you've got to care so much to do that. Our franchisees were about 85, which is exceptional in the franchise world because most of them in quick service food run about 65, 70. Wow.

And so we should be very thrilled about our franchise partners. And I appreciate them because they did care. But that 85 to 95 just drove me crazy, man. I mean, like, it was just like, oh, if you just do this, your customer service would get better.

Or if you just did this, the quality would get better. And then the advantage about company is you can control that. Second thing that I thought was inefficient about franchising is we've needed to change something that we were doing, right? Like, here's a better operational procedure.

There was so much time you had to talk in these franchisees because it's their business. And they're like, well, we don't agree with that. We think it should be this. And, but that wasted time to me that when, you know, we have company restaurants, we can roll something out three months later, it's adopted and we roll the efficiency goes away.

So that's there. Another advantage of having your own restaurants company restaurants is that your valuations are way higher, right? So your sales, your profitability, your dividend that goes through as you grow company restaurants, just the company's worth so much more, man. Because if you think about it, if you were taking a franchise system and say you were charging them 6% of sales, right?

But that's what you're making. Then you have your G&A that's going to the constant support systems, branding, processes, et cetera, et cetera. You're just not going to be working nearly as much. So if I were you, I would think about some things and questions about in my debt adverse because if you are company restaurant models, not going to be a great model for you to grow because you're going to grow and you're going to need to take on more debt and grow.

You can do the other franchisees. How much is this a baby? And you'll see that first year you're open this your mothership down the road. If this is somewhere you're just like, you don't even leave your ship and things aren't right.

Even though you had a great date plan that night, you're not going to feel good. But franchisees don't might have that same type of passion as yours. So I just would figure out it's just a good or bad to it. It's just a personality thing and really see where you're at.

I totally agree. And I would say in your case, again, Evan, it's not, I don't know if you can make that decision now. You have to first prove the model, right? You've got to take that store one and just instrument it like crazy.

It's just everything is data in that store. And once you figure out how to make that work, then you open two or three more stores and you write everything down because to make it successful as a franchise model has to be, you've got to have repeatable unit economics. Training system is going to be a brand voice. You've got to have quality control.

You've got to have a solid menu, operational simplicity, all of these things. If and only if it works after three to five corporate owned stores, then you can start thinking about whether it makes sense. I think it's a multi-step process. And step one is you've got this great laboratory now in Grandbury.

And then you can answer the question if and when you get to a point where it does take all these boxes. Does that make sense? Yes, sir. That makes total sense.

I think both of y'all just hit it right on the head because like what you were saying, Todd, the baby part in 95 and 85, we run everything at 105 miles an hour. And if it falls short, that's cool. But as long as you're all out. And I think the franchise model, like you said, people aren't going to do that.

And that would probably frustrate us. And this really helped a lot. And I appreciate it. Awesome.

The brand is called Whiskey Morning Coffee, Evan Sledge. Thanks for calling in, man. Congrats. Good luck.

Thank you guys. Good luck, Evan. Yes, sir. That's awesome.

I have been, I've done some work with a huge quick service restaurant a couple years ago. And I went to their annual convention. And man, the franchisees, they have the power. It's not corporate.

They've got a guy who's got 200 franchise locations of this quick service restaurant. Like he's the guy that everybody's got to talk to, not the CEO of the company. That is right. Which is the way it should be.

Yeah. But of course, it can be like Dave Satchick in this example. They went franchise right away. And that's one of the ways they scaled so quickly.

And it worked out for them, right? I mentioned they sold business. But that was a model that worked for them. It is, right?

And they wanted to expand rapidly. They wanted to do it with people that had other concepts and do how to do it and roll through it. And ultimately, you nail them their head right there. They sold the business, right?

So what's the quickest to get to scale to sell, right? And so for me, as I'm not selling the business, I love the business. I want to be a generational business. And to keep rolling in the best way to have somebody proud of, for me personally, was to own a company restaurant.

We're going to take a quick break. But when we come back, another caller, another question, and another round of advice. I'm Guy Ross. Take a round.

You're listening to the advice line on how I built this. Welcome back to the advice line on how I built this lab. I'm Guy Ross. My guest today is the legendary Todd Braves, founder of Raising Pains.

And we're taking your calls. Todd, are you ready for the next call? Yeah. Let's go.

Alright. Let's bring our next caller. Welcome to the advice line. Tell us your name.

I'm Josh Pasta, company and I manufacture fresh pasta and frozen pasta for restaurants and grocery stores and farmers markets and the like. Awesome. Welcome to the show, Dave. I just went to a delicious restaurant, Nashville and had fresh pasta.

So there are restaurants that will sell fresh pasta, but you guys basically are the white label. You make it for them. Right. I make fresh pasta for about 80 different restaurants, 130 different grocery stores, food distribution hotels, farmers markets.

So with the exception of the farmers markets, you're B2B basically. Yes. Tell me a little bit about how you got into this business. Have you been in food your whole career?

Yeah. Yeah. Well, I grew up in restaurants. And when I was 25, I had $1000 an idea and me and some friends bought a restaurant in South Texas and had a small pasta making component fast forward 10 years.

I had a four year old and at that point it went from being 40 seats to 120 seats, 3 o'clock bar. Wow. And so we sold the restaurant and I took the pasta component with me and then I had some help along the way and it's been about 13 years since then. And give me a sense of what you guys are doing in terms of sales a year.

Sure. We're going to be pushing 800 grand this year. I hope to be pushing a million by the end of next year. And how big is your facility?

3,000 square feet. Okay. Awesome. All right.

Before we dive in further, tell us your question. Sure. So scaling up is something that I'm about ready to do and I don't have access to traditional capital and I'm trying to figure out how do I finance and how I get access to capital without sacrificing my equity. Okay.

Before we answer the question, tell us why you don't have access to traditional finance. Sure. Well, part of the sale of restaurant had to do with some tax liability and default on SBA loan. So I've been blacklisted by the SBA and I had to take a personal bankruptcy in that transaction.

So I don't have bad credit, but I don't have any credit. Right. So you can't get traditional loan because of this default and listen, restaurant restaurants, tough business, even as it's growing, Mars are small. Well, we were also hit by the recession.

Got it. Okay. Well, 25% of his business is to food services, restaurants. He's looking to expand thoughts, questions, concerns.

Yeah. So Davis sounds like you're doing pretty good, man. I mean, I'm going to be really proud of 800,000 of sales right now. You're saying by the end of next year you're looking to do 1 million.

That's 20% growth right there that you're just doing organically right now. It's fantastic, especially at 3000 square foot. Can I ask you what, when you say you want to expand? What does that mean?

What is, I mean, what is the, how much cap do you need to do that growth plan? I've got two different plans. The initial plan is about 1.4 million. The further plan is more like five and a half.

What that would do is gain me capacity. So freezer space, for instance, is something that is a premium. I could expand my capacity. I could expand my offerings.

I could improve equipment. The industry is very equipment reliant. Most of my gear has been on for years. I've been rebuilding and repairing.

But a lot of my expenses are caught up in keeping that equipment going and producing. So new equipment, better facilities and also more marketing. I could hire someone to handle more front end things. My focus is on the creation of the production of the quality of the product and managing my team.

Not as much focus as I could have on outwards sales, internet presence. These kinds of front of the house tasks. Quick question for you. Does the current demand, David, outstrip your capacity?

There is more demand than I have the ability to touch. I've actually been approached by national players asking you to do co-packing. Wow. I just don't have the capacity to hold what they wanted.

They were talking about 20,000 pounds a week, which with a large facility, big players in this industry has nothing. But for me, that's more than I could take. So for the 1.4 million or the 5.5 million, just right off the bat, my gut says go the lower amount because of exposure, right? Get good traction and roll.

David, if you run through those numbers, 1.54 million gets me X amount of more freezer space, and that's going to relate to X amount of sales, which means bottom line, I make this so you can measure that return. You've done that? Yes. Great.

Your challenge is that you can't get conventional financing, which would be ideal obviously, right? Sure. You can approve a business model and you need to go get equity types of investments, but you don't want to give up equity. Well, I don't want to lose control.

Yeah. That's what I did with the restaurant. And I ended up with a small slice of big pie where currently I have my own very own whole small pie. Yeah.

So there's lots of different ways to finance a business. It depends on what your appetite for debt is, right? What your appetite is for how much equity you want to sell. Obviously, it's already non-negotiable for you.

You don't want to lose controlling interest of the business, which I highly recommend. This is your baby. You started it. You're making success.

Now, there's other ways that you can do things. There's angel investor networks and these are the people that love your pasta. They're very passionate about this. And there are people that have enough money, put away that they can do investments.

It's just to be a part of something, right? Be a part of something special. And these are generally more favorable. It's what I call angels, right?

And so I got angel investors to help me as I grew the business because I did not want to give up equity. I didn't want to give up control. So all of a sudden, what I was doing was just doing other equity shareholders just to have that in my head. Am I doing a good job for them?

Because it took me off my focus of what I knew was the right thing to do for our business. And so generally it's either interest rate things, so what I had was angel investors that I would do a 15% interest rate subordinated debt. It was a one-pager and I personally endorsed these. I mean, if I personally signed on to it, say, anything I had in the world, which is all just time to business anyway, then that I was going to be 100% into this.

But there was no equity being done. But it was a 15% interest rate, but my cash flow could pay for that. So that's why I was asking you about to be, run your numbers and that million, four. And you feel real solid for that.

for that, I was able to do a higher interest rate, but they were a part of it. I made them feel a part of the business. They got Keynes gear all the time. They came to restaurant openings, and their family was thrilled.

I put their photo albums, look how great this Homa Louisiana new restaurant is and how much the community loves it. And then they made up 15% return, which actually was really good. But as soon as I could pay that thing off, I did. And that wasn't convertible debt.

It was just a straight up loan. Straight up loan. And it looked at banking back then was a lot more lenient. I could actually take that subordinated debt and actually use that as equity to get loans, traditional loans.

But for a million four, if you had five to 10 angel investors that really want to be a part of this, and everybody could break off, you'll put in $100,000, put in $200,000, 20 people in St. Louis that do have that kind of money. But subordinated debt, they have no voting rights, no anything. They're just like, hey, look, here's this.

I hope you can pay me back my interest rate and do that. It's an idea, looking at from a 10% to a 20% type of mezzanine type lenders. That's a route you could go. There are a couple of options for you.

So as Todd mentioned, there are going to be local angel investors who are focused entirely on St. Louis makers. And you can find them on LinkedIn, but they may have Facebook groups, a little sleuthing on the internet. You'll find those groups, if you don't already know where they are, they're probably even some agricultural or food production grants available in the state of Missouri, I bet.

These are ways to support businesses in the state that employ people in the state. And they're probably even some food investment groups. And so those are all really interesting paths where you can do what Todd did with loans, or you could basically give away some equity, or you could take some convertible debt. The other option, the other idea, which I don't know if you've explored, as you mentioned, some of these big producers on the coast want to do co-packing with you, have you explored some kind of strategic financing from them, where they basically do a minimum volume contract, or they commit to a certain amount every month, they prepay it, or you do some kind of joint venture with them for just one line, right?

They're on your company, but they co-own one like production line, or even financing some of the equipment through those equipment manufacturers, or they're even equipment lenders. So I think that there are a couple of interesting options for you that don't necessarily rely on traditional financing. Yeah, absolutely. And actually, one of the companies that I was talking to was owned by a private equity firm when I did a little digging, although I have a sense that I'm too small to even sit at that table.

I know the venture capital, when I looked into that, it was way higher. The floor for that kind of transaction was way higher than anywhere close to where I'm at. You're too small for that. But you're not too small for, especially for passionate, committed, local.

I mean, Todd Baton Rouge has groups of people who are committed to investing in Baton Rouge, right? I mean, you are probably one of those people today. That's right. They want to see St.

Louis exceed, and they want to see him do better. And so the community people will invest. A lot of guys, you said there's plenty of government resources to go into looking at what are grants, what are those things going on that you're creating jobs and doing well, you're a proven, hardworking person. And equipment leasing companies, since you have successful company, look at can be higher interest than if you went in and you finance it traditionally, but that's how restaurant tours like us grow.

And you can go in and get it, be higher interest rate, but the equipment lending is another really big one. I love the idea of talking to these companies and want you to come in and do all this pasta for them and just saying, look, here's where I'm at. You're not as guy, so you're going to tell them, here's where I'm at. I can do this, but I need this.

And would you be interested in helping me do that? These are all just creative ways to where you don't have to get up that way. That's right. There's a lot of creativity that you can build into those conversations.

I don't think you've got a capital problem. I actually think it's more of an opportunity for you to identify those places where you can get the cash from an inmate and make work out ultimately in your favor. Right. Right.

Look at the rest of the restaurants you currently sell to now. I'm sure they're thrilled with your product. I'm sure they love you because you give them good product. Those are those angel investors, you know, they're doing well and just saying, Hey, look, I want to grow.

I'd like you to make a good return. Are you interested in this? I'm asking for smaller increments. I'll put together a group of this many people and look, they start talking.

They know each other. They start talking. Hey, this is exciting. This is, you know, have them come out to your plant and look, this is what I'm going to do.

And they feel part of something and you do good for St. Louis. I think those restaurant owners who sell to you right now are a good place to go. Look, 100%.

I agree. Yeah. Dude, my sir Midwest pasta company, thanks for calling and good luck. Thank you.

Well, it's interesting because a lot of people think that once you default, it's like you're finished, but it's actually there are all kinds of ways to find. It's not easy. There's no question about it. There are all kinds of ways to find that cash.

Absolutely. I mean, that was a good advice guy. That was some good stuff. Stay with us because after the break, we'll talk to another founder working to take their business to the next level.

That's after the break. I'm Guy Raz and you're listening to the advice line right here on how I built this. Welcome back to the advice line on how I built this lab. I'm Guy Raz and today I'm taking calls with Todd Graves of Raising Canes and let's bring in our next caller.

Yeah, I'm ready. This is fun. Hi, Todd. And hi, Guy.

I'm Shane Lyons. A longtime listener for Splendcaller. I'm the co-founder of Vesti in Los Angeles, California. We specialize in delivering chef crafted snacks and signature sandwiches made on homemade focaccia to retail partners, offices and corporate campuses and direct to consumers via web orders all over LA and Orange County.

Awesome. Vesti. So you make sandwiches, focaccia bread sandwiches in LA. Tell me a little bit about where you're selling yourself.

Sure. So we've been on quite the journey. My partners and I were about three years in and we have 45 retail partners that we work with. So Alfred Coffey, being one of our most notable.

They've got like 22 locations in Los Angeles and we serve as 18 of them with sandwiches as well as gourmet gressers and other coffee shops. So you make the sandwiches like a central kitchen and deliver them for us every day to these different places? That's right. Yeah, we call it like a chef driven factory model because we're all chefs and my partners and I longtime fine dining boys and girls and we love great food.

We also wanted to make a really scalable profitable business. So we're trying to find the balance of the two and we landed on sandwiches and the sandwiches we designed actually believe or not get better as they sit because of how we've designed them. They're a little moisture, relatively high-fat because it's nice olive oil that we use. And so they have a shelf life up to we stay three days but in actuality it's four days where you really see almost no degradation in the product.

And just really quick what you guys are profitable and what's roughly what are your sales? Sure. Yeah, we had our first months of profit in June and July. We are targeting just under a million in sales this year.

Nice. And you mentioned you were a fine dining chef. Tell me a little bit about your background and why did you? I can imagine why you left that world but why did you leave that world?

Sure. I've actually had dual careers my whole life when I was a kid. I was a kid actor on Nickelodeon Disney for many years and then that train stopped and at 16 I went culinary school. I went to the CIA culinary institute of America.

My mom's also a graduate from there. So sort of in the blood. And then I worked with some really fantastic chefs David Chang and Daniel Bloud. And I had the opportunity to open up a restaurant in New York City with my cousin Nikkyo Bikini and legendary restaurant tour Drew Neapont.

We did that for about eight years and eventually sold at least to other restaurant tours. So after that I was sort of beat on, you know done with restaurants. I was working six, seven days a week back to back lunch dinner into brunch. All that sort of good stuff that chefs do.

And I was burnt out and then found myself working in film and TV again and during COVID. And like many people during COVID, you know, I was going one direction then I was given the diagnosis I was supposed to actually start on a TV show and they recast immediately. And so I had a regroup and I really spent a lot of time thinking about the background of being a chef and as well as an actor and the things I liked and the things I didn't like from the cultures I was in and I was just dedicated to doing something with my friends. So sounds like you got your weekends back basically.

I do have my weekends and I've seen what a Friday night not at a restaurant looks like and it's really nice. Tell us what your question is before we dive in a little more. So our question relates to brick and mortar. You know, should we invest in a brick and mortar?

And if so, when it comes up often in conversation, we have internal debates about it. We have some active investor interests and then constant guests in queries. You know, our model right now as a chef driven factory allows us to excel at high volume, high quality free production. But it's not currently set up for on demand single sandwich orders, which as you can imagine, leaves some of our guests really frustrated and potentially turned off from the brand entirely.

But given that our models low fixed costs and high margins, what are the compelling reasons that we should be exploring and investing in traditional bricks and sticks location? Okay, great. Todd, I want to bring you in former Michelin star chefs and making focaccia bread sandwiches to offices and coffee shops. But they're thinking about opening a brick and mortar.

Shane, I'll give you a few things just from my experience. What happens is when you start to have success, you have other influences that come in saying, Hey, you're doing great doing this. But you know what? Maybe you should go do this.

And that's where I think this brick and mortar is coming to be brought to your products are incredible. And why don't you go do this? And what's worked in my, you know, my passion, my career doing raising pains, it's been being staying focused, right? Focused on I know what I'm good at.

I know what I can do to successfully make money, but you have to continue to make money. So for me, the whole thought of brick and mortar, and I'm not saying it's a bad one, but it's a, as you know, it's a completely different business, you know, you're still selling your product. But now now you're the one doing, you know, all the front of house, back of house with people, you're taking on substantial debt doing that. And to me, it's a distraction away from building your current business that's doing very well.

You can take that 45 retail partners and you can make a goal to say we want 90 retail partners. And this is how we're going to go out and do this and double your sales. So my advice would be go for the goals of keep doing great what you're doing right now, focus on that, make it better. And I would table that brick and mortar thought until after you get that next goal, let's say it's 90 retail partners.

Hey, do we really want to do that now and change our focus right now? Because this little guy, Todd Graves and Baton Rouge, we had a chicken finger dream and stuck with it. And now I got a thousand brick and mortars and we're playing on the next thousand, you know what I mean? But if I tried to get into retail line, you know, the grocery stores, what canes frozen in the, in the, in the grocery stores, retail, they want our salt bottle, they want all these different lines.

And if I look at all those different product lines, it's going to take my focus away from doing what I'm really good at. Yeah, I know it's so, a couple of questions for you, Shane. I mean, the first is, do you guys do pop ups? It's funny you should say that.

I'm actually suited up because right now we're working at the Midan Market in Los Angeles, the really cool hybrid concept, which we kind of consider an asset-like brick and mortar. Basically, we have a six-week lease. So for us, you know, exactly what you're describing, Todd, it's back. You know, we're there every day.

I'm there from 9 a.m. to, you know, 11, 12 o'clock at night. And it's full on six days a week. And it's reminded me of, you know, I really like my core business.

As much fun as it is to interact with guests, we're in hospitality for a reason. We love people. We love the making people great. We love delivering on the promise of providing a fantasy, which I think is what restaurants are ultimately there for, is to provide fantasy to some degree and fulfill on that promise.

So it's been really nice to kind of be in a restaurant for this period, but then we'll be exiting. Yeah. I mean, to me, that's a brand-building exercise, which is important because it, a lot of chefs go into catering. It's just more efficient.

It's more profitable, better margins. And by doing these pop ups, right, you're exposing more and more consumers to what you offer. And really, it's the lunchtime, you know, it's at 500 sandwiches or 200 sandwiches for the lunchtime, you know, offices that's really going to be a bread and butter. What's interesting to me about brick and mortar is that, and I totally agree with Todd, it's like, do you want to get back into that restaurant lifestyle that you walked away from?

I think there's a kind of a happy middle there, which is, is there a world where down the road, it may not happen right away, you basically open up a commissary kitchen that is like an embassy, like almost a brand embassy, where you might have a little counter where you can go in, a little bit of a brick and mortar, where you do offer maybe a window, but really it's just about putting a brand out there and just building more awareness, but also having a kitchen, your own kitchen, where you're making the product. I think that's right. It makes total sense. And we've talked around ideas like that, and we really love the hub and spoke model.

We've kind of reverse engineered a lot of restaurants move into catering because they're all cart sales are lagging, and instead we've started exclusively catering, and now there's demand for all the cart. So trying to find that hybridization of the two is really what we're looking at now. And we do know that we'd like to expand across the least North America. And this the internal conversation of, well, can you have a brand that can leave LA and go somewhere else and not have a brick and mortar presence?

Is it even possible? We don't know. As far as expanding, right? Now you'll have some aspiring goals to dream, you know, you want to expand across the country with using retail partners, they need good products, right?

And I like what guys saying of some of your product having its own brand is a pop up in the new area, right? You set up that hub and smoke model, you're going to set up your commissary there and do it great. Some pop ups for people, but that's the best focaccia sandwich I've ever had using influencers where people know it's your brand, but I don't think you need to have the brick and mortar. You also run the risk of that brick and mortar not hitting the way you want it to hit.

And the retail partners are like, Hey, you know what, you weren't that successful in your brick and mortar. I don't want to get your product. You have something that's working very well right now, and I would focus you and your team, all the energy on that and growing that side of your business. Yeah.

Yeah, we've been sort of like a slow growing indie band in LA for the words getting out. And like, we can see that the opportunities are sort of everywhere now. And I'm very afraid of the shiny objects. I've been around enough to say most of them are distraction.