Raising Cane’s plans growth in 2014

After years of growth that have seen the company establish locations in 17 states, Raising Cane’s is concentrating on local markets in 2014 and heading west in 2015.

After wrapping up Baton Rouge and New Orleans locations it has in the works, the next move for Raising Cane’s will be its first locations in California, in the Los Angeles area.

The California restaurants will be owned by the company and not franchise stores.

“We just want to grow the right way,” said Cane’s co-founder and CEO Todd Graves.

The chicken tender chain is set to open a restaurant in downtown Baton Rouge, at Third and Florida streets. This 3,000-square-foot restaurant should open by the summer.

There had been talk about Raising Cane’s opening a restaurant downtown for several years, ever since the company moved Baton Rouge corporate offices to the One American Place building in 2006.

With the recent growth downtown — such as the IBM Service Center set to open in April 2015 and several residential projects along Third Street — Graves said it made sense to open a location on Third Street. “There’s the volume of people there to do the cash flow we need,” he said.

Cane’s plans to hire 40 employees for the downtown Baton Rouge location. The restaurant won’t have a drive-through, but it will be open late night to feed hungry people coming from the Third Street entertainment district.

The chain also is set to open six new locations in greater New Orleans during the next year, fulfilling a long-standing goal of the company to increase its presence in the Crescent City.

“We’ve been wanting to do this for 10 years,” Graves said. “But it’s very hard to develop locations in Orleans Parish because there are not a lot of properties with room for a drive-through.”

But in the past year or so, the opportunities aligned for Cane’s to expand its footprint in New Orleans. The company has 13 restaurants in metro New Orleans. In contrast, metro Baton Rouge now has 18 Cane’s restaurants in operation.

“These deals and sites all broke loose in the last year,” said Rick Fuchs, Cane’s vice president of real estate. “It’s not like we started in the last year; we started this process 10 years ago.”

The first New Orleans restaurant in the group to open will be a Cane’s in the food court at The Outlet Collection at Riverwalk, which will be in business this summer.

That location illustrates Fuchs’ and Graves’ comments about how the new Cane’s restaurants are payoffs for years of work. Cane’s committed to a spot in the food court of the $70 million shopping center about two years ago.

Two more locations opening this summer, at South Carrollton Avenue and Forshey Street and at St. Charles Avenue and Thalia Street, are old KFC restaurants that are being converted into Cane’s.

In 2015, Cane’s will open locations close to two high-profile redevelopment projects: at 4800 Chef Menteur Highway, near the Gentilly Wal-Mart, and as part of the $24 million Magnolia Marketplace that Stirling Properties is building at South Claiborne Avenue and Toledano.

Cane’s other New Orleans location to open will be on Airline Highway, across from Zephyr Field and the New Orleans Saints training facility. That will open sometime in 2015. “That location is a great opportunity for us and a chance to go in and make an impact,” Graves said.

The company is considering a seventh location, which would be in New Orleans East, but nothing has been committed yet.

To staff the New Orleans restaurants, Cane’s plans to hire 250 employees, including several managing partners. Those managing partners have more autonomy, with larger responsibilities in operations and human resources. “It’s almost like being a franchisee,” Graves said. Salaries for managing partners top out at more than $100,000.

Cane’s should do well with its New Orleans expansion, said Darren Tristano, executive vice president of Technomic, a food industry research and consulting firm based in Chicago.

“They have a pretty good opportunity to do this successfully,” he said. “Opening six stores in a market for a brand this big is not challenging.”

Cane’s has 181 restaurants in 17 states. Company officials said the chain posted more than $370 million in sales in 2013 and is projected to see $450 million in sales by the end of 2014 and $500 million by 2015.

The chain has seen 25 percent annual revenue growth, and Tristano said a heavy amount of that new business is coming from additional Cane’s locations. “That means as they are growing, somebody is losing share,” he said. “Cane’s has a good management team, a good story and a great connection to Millennial consumers, who grew up eating a lot of chicken tenders. They should continue to see success.”