How Much Does It Cost to Start a Raising Cane’s Franchise?

Fast food restaurants have long been a profitable business venture, with many popular chains seeing sustained success over the years. Raising Cane's, a relatively new player in the fast food industry, has quickly established a strong brand and a loyal following thanks to its unique menu, high-quality ingredients, and commitment to simplicity and customer service. As a result, many entrepreneurs are now considering opening a Raising Cane's franchise as a potential investment opportunity.

Raising Cane's Chicken Fingers is an American network of fast food restaurants that specializes in chicken fingers. The brand was established in 1996 in Baton Rouge, Louisiana, by Todd Graves and Craig Silvey. Raising Cane's Chicken Fingers is also known as Raising Cane's or simply just Cane's.

In 2015, Cane’s continued to expand into locations both domestically and internationally and tap into new foreign markets with the establishment of its first location in Kuwait. Since 2015, Cane’s has not slowed down. In fact, the restaurant celebrated the launch of its 600th location in Corona, California, early last year and has added an additional 62 since then. Cane’s expects to continue this tremendous growth throughout the next year. 

Cane’s is striving to expand its global restaurant footprint and become known as the go-to brand for delicious chicken finger meals, an amazing staff, a hip culture, and engaged participation in local communities. We’ll cover how to finance your franchise, as well as the following topics in this article:

• History of Raising Cane’s
• Cost of starting a Raising Cane’s
• Advantages of owning a Raising Cane’s
• The Chief Advantages of owning a Raising Cane’s
• Disadvantages of owning a Raising Cane’s
• How to Open a Raising Cane’s Franchise
• Expected Annual Profit for Raising Cane’s Franchisee
• Conclusion

Cost of Raising Cane's franchise

The first concern that a potential franchisee will have is related to the above-mentioned financial investment required to own a Raising Cane location.

The financial requirements and expenditures associated with owning a Raising Cane franchise are outlined below in the form of a preliminary estimate based on other businesses that operate under comparable models.

According to the company's franchise disclosure document (FDD) from 2021, the initial franchise fee for a single Raising Cane's restaurant is $45,000. However, the “total investment” of opening a Raising Cane's franchise can range from $768,100 to $1,937,500, depending on factors such as the size and location of the restaurant, as well as other expenses related to equipment, supplies, inventory, and more. A more detailed breakdown of the potential costs can be seen below:

Franchise fee: $45,000

Real estate and construction costs: $571,300 to $1,285,800

Equipment and supplies: $206,700 to $336,200

Inventory: $11,500 to $22,000

Training and opening expenses: $18,500 to $44,000

Additional funds: $50,000 to $104,300

It's important to note that these estimates are just that - estimates - and the actual costs associated with opening a Raising Cane's franchise can vary significantly depending on a variety of factors. Additionally, ongoing fees such as royalties, marketing expenses, and other costs will also need to be factored in over the life of the franchise.

Additionally, there is a royalty fee of 5% and a 4% marketing fee. Overall, Raising Cane's franchise fees are comparable to those of other fast food chains. In other words, both the royalty and marketing fee is on par with other chains, including Popeyes and McDonald's. Here is a list of the franchising fees of Raising Cane’s to other comparable businesses:

Raising Cane's:

Franchise fee: $45,000

Marketing fee: 4% of gross sales

Royalty fee: 5% of gross sales

McDonald's:

Franchise fee: $45,000 - $160,000

Marketing fee: 4% of gross sales

Royalty fee: 4% of gross sales

Chick-fil-A*:

Franchise fee: $10,000

Marketing fee: 0.25% of gross sales

Royalty fee: 15% of gross sales

Popeyes:

Franchise fee: $50,000

Marketing fee: 4% of gross sales

Royalty fee: 5% of gross sales

*some franchises, such as Chick-fil-A, have more stringent requirements for potential franchisees and a more limited pool of available franchises, which can affect the overall costs and benefits of owning a franchise. 

History of Raising Cane’s

Raising Cane's Chicken Fingers was established in 1996 in the city of Baton Rouge, Louisiana, by Todd Graves. Graves got the idea for the restaurant when he was working on an offshore oil rig, which is where he had his first experience with chicken fingers. After getting back to his hometown, he made the decision to launch a new business that would focus on his newly discovered favorite food.

Graces chose the name "Raising Cane's" as a tribute to his beloved dog, who had accompanied him on many hunting trips and had become a loyal companion. Raising Cane's logo features an outline of a dog, which represents Cane, and the company's focus on quality and simplicity. The menu at Raising Cane's is also simple and focused, featuring only a few items, including chicken fingers, crinkle-cut fries, coleslaw, Texas toast, and Cane's sauce. This simplicity and focus on quality have helped Raising Cane's become a popular fast-food chain known for its delicious chicken fingers.

The first restaurant's location was on Highland Road, and it immediately rose to prominence in the community as a result of the high quality of its cuisine and the welcoming nature of its setting. In 1997, Cane’s opened their second restaurant in close proximity to the LSU campus. Because of the overwhelming popularity of this place, others like it started springing up all throughout south Louisiana around the year 2000.

Cane’s is now grown into a global phenomenon with outlets across North America, Europe, and the Middle East.

By 2007, Raising Cane's had established itself as a formidable competitor in the quick-service restaurant sector, earning recognition as one of Entrepreneur magazine's "Top 50 New Franchises."

In 2004, Raising Cane's opened its first restaurant outside of Louisiana, in Columbus, Ohio. The company continued to expand throughout the Midwest and South, and by 2019, it had more than 500 restaurants in 27 states and several countries.

Raising Cane's has won several awards and accolades over the years, including being named the "fastest-growing restaurant chain in the U.S." by Nation's Restaurant News in 2017. Despite its success, the company has remained privately held and is still owned by Graves, who continues to serve as the company's CEO. 

Advantages of Purchasing a Raising Cane's Franchise

Before moving ahead with your intentions to franchise this company, there are several things to take into consideration first. Below is a summary of the advantages and disadvantages to assist you in making a selection that is more well-informed. 

Established brand: Raising Cane's has a strong brand and loyal following, which can help franchisees attract customers and establish a successful business.

Proven business model: Raising Cane's has a simple business model that focuses on a limited menu and high-quality food, which can make it easier for franchisees to operate and manage their businesses.

Marketing and advertising: Raising Cane's invests in national and local marketing campaigns to promote the brand and drive traffic to franchise locations. This can help franchisees attract new customers and increase sales.

Buying power: As part of a franchise system, Raising Cane's franchisees can benefit from the buying power of the larger brand, which can help them secure better deals on supplies and equipment.

Community involvement: Raising Cane's is known for its strong community involvement and support of local causes. Franchisees can benefit from this goodwill and build strong relationships with their local communities.

Expansion opportunities: Raising Cane's is actively expanding its franchise system, which can provide franchisees with opportunities to open additional locations and grow their businesses.

The Chief Advantages of Raising Cane’s

High AUV: Raising Cane's is a popular fast-food chain specializing in chicken fingers, with a focus on simplicity and high-quality ingredients. Raising Cane's has a relatively high Average Unit Volume (AUV) of $4.6 million, which is impressive considering its more limited menu offering. This places Cane’s AUVs among all major fast food chains, only behind Portillo’s, Chic-Fil-A, and Shake Shack. For comparison, here is a list of the AUV of a few other major fast-food chains:

McDonald's: McDonald's is the largest fast-food chain in the world, with over 38,000 locations in more than 100 countries. In 2020, the AUV for McDonald's was reported to be $2.9 million.

Chick-fil-A: Chick-fil-A is a popular chicken sandwich chain with a strong focus on customer service. In 2020, Chick-fil-A's AUV was reported to be $4.7 million.

KFC: KFC is a global fried chicken chain with over 24,000 locations in more than 145 countries. In 2020, the AUV for KFC was reported to be $1.2 million.

Taco Bell: Taco Bell is a popular Mexican fast-food chain known for its tacos, burritos, and other Tex-Mex offerings. In 2020, the AUV for Taco Bell was reported to be $1.7 million.

Wendy's: Wendy's is a fast-food chain known for its burgers, fries, and Frosty desserts. In 2020, the AUV for Wendy's was reported to be $1.6 million.

While it's not as high as Chick-fil-A's AUV, Raising Cane's still performs quite well compared to some of the largest fast-food chains in the world.

Training and Support: Raising Cane's is known for its comprehensive training and ongoing support system for franchisees. The company provides a range of resources and services to help franchisees establish and grow successful businesses.

One of the key elements of Raising Cane's training system is the Restaurant Support Office (RSO), which provides new franchisees with a dedicated team of experts who help guide them through the process of opening their own restaurant. The RSO team assists with site selection, restaurant design and construction, and marketing and advertising. They also provide ongoing support to franchisees, helping them optimize their operations and improve their profitability over time.

In addition to the RSO, Raising Cane's also offers a range of training programs to its franchisees. These programs cover a wide range of topics, from operations and management to customer service and marketing. Franchisees are required to complete these training programs before they can open their restaurant, and they also have access to ongoing training and support throughout the life of their franchise.

One of the unique aspects of Raising Cane's training system is its focus on culture and values. The company places a strong emphasis on its core values, which include a focus on quality, cleanliness, and customer service. Franchisees are trained to embody these values in all aspects of their business, from the food they serve to the way they interact with customers.

Overall, Raising Cane's training and support system is designed to help franchisees succeed in the highly competitive fast food industry. By providing a range of resources and services, the company helps franchisees establish and grow successful businesses that reflect the values and culture of the Raising Cane's brand. As a result, the company has built a strong network of franchisees who are dedicated to delivering high-quality food and exceptional customer service to their local communities.

Disadvantages of Franchising Raising Cane's Restaurant

In addition to the many advantages that come with owning a Raising Cane franchise, there are also a few drawbacks to franchising a Cane’s restaurant. We will discuss some of these difficulties that you could face if you decide to become the owner of a Raising Cane franchise in order to help you come to a more informed conclusion.

Limited menu: Even though this limited menu can be helpful, it could also work as a drawback. Raising Cane's Restaurant has a limited menu that focuses on chicken fingers, which can limit the appeal to some customers who may prefer more variety.

High startup costs: The initial franchise fee for a Raising Cane's Restaurant can be expensive, and franchisees are also required to pay ongoing royalty fees, marketing fees, and other expenses associated with opening and operating the franchise.

Limited geographic areas: Raising Cane's Restaurant is a relatively new franchise and is currently only available in certain regions, so potential franchisees may not have the opportunity to open a location in their desired area.

Intense competition: The fast food industry is highly competitive, and Raising Cane's Restaurant competes with other popular chicken chains like Chick-fil-A and KFC. This can make it difficult for franchisees to establish a strong customer base.

Dependence on the franchisor: Franchisees must follow Raising Cane's operating system and brand standards, which can limit their ability to make independent decisions about their business.

Need for high-quality customer service: Raising Cane's is known for its customer service, and franchisees must maintain the same level of quality in order to maintain the brand's reputation. This can be challenging, especially if the franchisee is not experienced in the restaurant industry.

Employee turnover: The fast food industry has a high rate of employee turnover, which can make it difficult for franchisees to maintain consistent levels of quality and service. Franchisees may need to invest more time and resources into training and retaining employees.

How to Open a Raising Cane's Franchise?

Step One: Requirements 

To open a Raising Cane’s Franchise, you must first meet some baseline requirements. These requirements include:

Financial requirements. Raising Cane's requires franchisees to have a minimum of $1.5 million in net worth and $750,000 in liquid assets.

Business experience. Prospective franchisees should have a background in business management, preferably with experience in the restaurant or hospitality industry. They should also have a demonstrated track record of success in managing and operating a business.

Commitment to the brand. Raising Cane's franchisees must be committed to upholding the brand's standards and values, including its focus on quality, simplicity, and customer service.

Willingness to follow the franchise system. Raising Cane's is a franchise system, which means that franchisees must be willing to follow the company's established systems and procedures, including its training programs, marketing strategies, and supply chain management.

Location. Franchisees must have a suitable location for the restaurant and secure a lease or purchase agreement for the property. Raising Cane's will work with franchisees to evaluate potential locations and negotiate lease or purchase agreements.

Overall, Raising Cane's seeks franchisees who are passionate about the brand and committed to upholding its values and standards. The company provides extensive training and support to help franchisees succeed, but it also expects a high level of dedication and hard work from its franchisees.

Step 2: Acquire an awareness of the financial investment that will be required to launch a restaurant franchise

There are a variety of costs that need to be accounted for when starting a Raising Cane's franchise. The cost of real estate, equipment, signs, licenses and permits, uniforms, insurance, and other things are included in this category of expenses.

The process of applying for a franchise requires that you first have an understanding of the needed financial commitment. This stage is vital because it enables you to assess whether or not you are prepared to make this investment.

Step 3: Conduct an examination of the experiences you've had in the past as well as the attributes you have

It is critical that you take the time to evaluate your prior work experience in the business world before submitting an application to become Raising Cane's franchise owner.

This stage helps you assess whether you have the abilities and traits essential to operate a successful franchise, such as previous experience in management, knowledge in marketing, and a strong work ethic. If you do have these skills and qualities, you may go on to the next step.

Step 4: Assess market availability

In this stage, the potential franchisee will have to determine whether or not there are open markets in the desired location. Furthermore, the franchiser will have to judge whether or not there is adequate demand for a Raising Cane's franchise in your region.

Step 5: Send in your Application

At this point, the prospective franchisee will be able to send your franchise application to the Raising Cane's franchise team. The franchisee will be sent a confirmation receipt via email as soon as we have received your application. This confirmation receipt will contain the contact information of the franchise owner.

Step 6: Discovery Day

If your application is approved, you will be invited to attend a Discovery Day at the company's headquarters in Louisiana. This event is designed to give you a better understanding of the Raising Cane's business model, training and support, and franchise operations.

Step 7: Sign a Franchise Agreement

If you are approved for a Raising Cane's franchise, you will need to sign a Franchise Agreement, which outlines the terms and conditions of your franchise ownership, including the initial franchise fee, royalties, and advertising fees.

Step 8: Secure a Location

Raising Cane's provides its franchisees with support in finding and securing a location for their restaurant. The company has specific requirements for restaurant sites, including high-traffic areas and proximity to residential areas, among others.

Step 9: Build and Open Your Restaurant

Once a location is secured, Raising Cane's will provide support and guidance to help you build and open your restaurant. This includes training programs for you and your staff, assistance with design and construction, and ongoing support from the Raising Cane's Restaurant Support Office.

In conclusion, creating Raising Cane's franchise demands meticulous preparation, stable financial backing, and a strong dedication to the process as a whole. If you follow these instructions, you will be able to improve your chances of being successful and establish a franchise that will be lucrative for you.

Expected Annual Profit for Raising Cane's Franchisee 

Raising Cane's has been consistently ranked among the top-performing fast-food franchises in the United States, and the company reports that its restaurants have historically generated strong financial performance. However, it's important to note that gross sales do not directly translate to profit, as franchisees are responsible for covering a wide range of expenses related to operating the restaurant, including rent, labor costs, food and supplies, marketing, and more. Profitability can also be impacted by a variety of other factors, such as the level of competition in the local market, the quality of the management team, and the overall economic conditions of the region where the restaurant is located. As such, it is not possible to give a precise estimate of the profit that a Raising Cane's franchisee can expect to make each year.

Nevertheless, we do know some information about the profitability of opening a Raising Cane's. While they do not provide data on franchisee financial performance, we know the AUV for its franchises in 2021 was $4,192,239. The time to recoup the initial investment depends on the profit margin achieved and other factors. It takes an estimated five years at a 15% profit margin to recoup the full initial investment. The valuation multiple for selling a Raising Cane's franchise is estimated to be around 0.89 of net sales, which would be $3,731,092 based on the 2021 AUV. Owning multiple franchises increases earning potential as private equity firms become interested in the business.

Financing Options

Franchisers can choose from a wide variety of different financing options to get their franchise off the ground and running. Here is a short overview of a few different financing options franchisees can take advantage of:

SBA Loans

SBA loans are a popular financing option for small businesses (not just franchises) offered through the United States Small Business Administration (SBA). SBA loans are unique in that they are backed by the federal government. As a result, lenders who lend to businesses through the program are able to offer their loans to a wider array of borrowers at better interest rates.

SBA loans typically come with some of the best loans and the lowest interest rates available to small businesses. One of their most popular programs is the SBA 7(a) loan program, which can be used for a wide array of purposes. SBA loans allow borrowers to obtain up to $5 million in funding with term lengths of up to 25 years.

However, SBA loans typically have long application processes that require a great deal of documentation. Small businesses often have to provide a thorough business plan and meet a wide range of other criteria. This can result in long wait times for businesses to obtain funding, making SBA loans a poor option if you need funding fast.

Additionally, the SBA only allows their loans to be used for certain pre-approved franchise brands. Whether or not the franchise you are interested in has been approved by the SBA is something you may want to consider when selecting a franchise. The complete list of pre-approved franchises can be found in the SBA’s online franchise directory.

Term Loans

Terms loans are another traditional and popular financing resource for small businesses, including franchises. With term loans, borrowers receive a lump sum of capital upfront which can be used to cover a variety of different expenses, including working capital, equipment purchases, and startup costs. Term loans are then paid back over a fixed term, typically ranging from 1 to 5 years but oftentimes much longer, with set monthly and quarterly payments. This includes paying back interest on the loan, which can be based on either a fixed or variable interest rate.

Term loans are offered by both traditional brick-and-mortar banks and alternative lenders (like Biz2Credit!). Both of these options come with pros and cons for borrowers.

Term loans that are offered by traditional lenders are known to be incredibly difficult for small businesses to obtain. The application processes are long and drawn out, requiring prospective borrowers to provide a great deal of documentation for the lender to analyze their business with. However, because of this long application process, traditional lenders are able to provide loans with some of the lowest interest rates available.

Term loans offered by alternative lenders are much different. The application processes are typically short and can often be completed online with minimal documentation. Funds can often be obtained in as little as 24 hours after submission of the application. However, because the process isn’t as thorough, the interest rates on these loans are typically much higher.

Lines of Credit

Lines of credit are another common type of loan that many small businesses obtain. Lines of credit are different from other loans in that they remain open for an extended period of time (often 10 years or even longer). Borrowers can then use them over and over again by borrowing up to the cap on the loan and then paying back the funds (with interest). Once you pay back the funds, you can borrow from the line again.

The fact that lines of credit remain open makes them great for shoring up cash flow or short-term financing. You don’t have to apply each time for funding, and you can access the funds right away. However, lines of credit also typically have higher interest rates that are variable. This means that they aren’t ideal for long-term borrowing or financing. Instead, for large purchases, they are better used as interim financing while you find a long-term loan that can be a permanent solution.

Though a line of credit may not be great for startup costs, any new business should still look into and consider getting one. This can be a lifesaver down the road if you end up having cash flow issues or your business needs access to cash immediately for some reason.

Equipment Financing

Equipment financing is a great option for franchises, particularly in the restaurant industry, due to the volume of commercial equipment they often have to purchase. Equipment financing is unique in that the equipment that is purchased with the loan is used as the collateral on the loan. This typically lowers in the interest rate on equipment financing and makes it easier to obtain. This is because the equipment lowers the lender’s risk by providing them with something they can sell to salvage some of their funds if the borrower defaults.

If you are considering opening up a franchise and need to buy commercial equipment, equipment financing is definitely an option worth considering.

Conclusion

In conclusion, Raising Cane's has established itself as a popular and successful fast-food chain in the United States and beyond. With its focus on high-quality ingredients, simplicity, and a limited menu offering, Raising Cane's has differentiated itself from other fast-food chains and created a loyal customer base. The company's commitment to providing a strong training and support system for its franchisees has also contributed to its success and allowed for rapid expansion in recent years.

While Raising Cane's is still a relatively young company compared to some of the other major fast-food chains, its AUV is impressive and places it in the industry's upper echelon. The company's success has also helped it give back to local communities through various philanthropic efforts, further solidifying its reputation as a socially responsible company.

Overall, Raising Cane's continues to grow and expand its reach across the United States and beyond, offering customers a simple and delicious menu and franchisees a supportive and profitable business opportunity. As it continues to evolve and adapt to changes in the industry and the world at large, Raising Cane's is sure to remain a popular and beloved fast-food chain for years to come.

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FAQs

How much does it cost to buy a Cane's franchise?

Raising Cane's franchise requires an initial franchise fee of up to $45,000, with total startup costs ranging from $768,100 to $1,937,500.

How much does a Canes store owner make?

Cane's locations generates an estimated average gross sales of $4.5 million. With an average restaurant operating margin of 15%, the estimated annual earnings (EBITDA) for a typical Raising Cane location is approximately $675,000.

What are the requirements to open a Raising Cane's?

To qualify for a Raising Cane franchise, applicants must have a minimum net worth of $1.5 million and at least $750,000 in liquid assets. Additionally, candidates should have strong business management experience, ideally in the restaurant or hospitality industry.

What is the net worth your total value requirement to open a franchise?

When pursuing a franchise investment, focus on strengthening your balance sheet by increasing assets or reducing debt. Generally, franchisees should have a minimum net worth of $100,000 to qualify.

Is Raising Canes good to work at?

Working at Raising Cane’s has its pros and cons. The best aspects include a lively, fast-paced work environment and a strong sense of teamwork. Coworkers are supportive, and management can be encouraging depending on the location. The company emphasizes a positive attitude and strives to create an enjoyable shift experience.