🍟 5/8/2023 – How a Restaurant Selling 1 Item is Crushing The Competition
The Secret of Simplicity
You may be asking yourself, why is there a picture of delicious looking chicken fingers as the banner image for this newsletter?
Answer: because that meal is from Raising Cane’s, a quick-service restaurant that sells effectively 1 menu item (chicken fingers).
Growing up in the northeast, I never knew Canes even existed. But since living in Texas, I’ve seen them all over the place. And then I came to find out that there’s 677 locations open today, with an average unit volume upwards of $4.89M!
For context, that puts their average revenue per location ahead of every quick-service restaurant except for Chick-Fil-A.
All from selling just chicken fingers. Insanity…but also genius.
Let’s dig into why..
The Raising Cane’s Model
Cane’s was founded by Todd Graves in 1996. The (then) 24 year old had written a business proposal for his restaurant idea during a college assignment a few years prior.
He wanted the restaurant to be based around 1 meal: chicken fingers.
So Todd and his best friend, Craig Silvey, spent weeks outlining every detail of the business plan, down to the supplier logistics and cost of materials. Funnily enough, when they finally turned in the assignment, they received the lowest score in the whole class!
The general feedback for Todd, which he’d later hear from banks when he was looking for financing, was:
- The idea was too basic
- The business wasn’t differentiated
- The competition was too great
Regarding that last point, there was already KFC, Popeye’s, and Chick-Fil-A operating hundreds of locations.
But Todd was undeterred, and despite his college professor and all the banks who told him he’d fail, he launched Raising Canes on August 28th, 1996 with just 5 menu options:
The options (which are the exact same to this day) were :
- Four chicken fingers with a side of fries, texas toast, and canes sauce
- Six chicken fingers with a side of fries, texas toast, and canes sauce
- Three chicken fingers with a side of fries, texas toast, and canes sauce
- two chicken fingers with a side of fries, texas toast, and canes sauce
- A chicken-finger sandwich with a side of fries and canes sauce
It’s a beautifully simple model, and given their average unit volumes, it is clearly working.
Why Canes Will Never Change
Take a look at the 30 second clip, where the founder tells us why he’s not worried about the simplicity of the concept.
By adding just 1 more menu item, such as a spicy version of his chicken tenders, he already knows the ripple effect it could have:
On one level, less focus on their core product would lead to reduced quality.
But Todd goes even deeper, and talks about simply by adding 1 menu item would force customer into making a decision, which would undoubtedly increase the time it takes to order, which means longer wait times, drive-thru lines, etc.
His simple business model allows his staff to focus on just 1 product, and means customers know exactly what they want when they show up!
It’s easy for businesses to want to add different products and services to increase and/or diversify revenue, but Raising Cane’s shows that laser focus on 1 product can yield the best results.
Cane’s isn’t the only company that has a narrow focus. Here’s a few others that have obsessed over doing 1 thing exceptionally well.
Since their inception 70+ years ago, they’ve only added 5 items to what makes up a 15 item menu. It’s mainly just burgers, fries, milkshakes, and soft drinks.
The fitness franchise was one of the pioneers of the HIIT workout class. Members don’t have different options for workout classes, nor can they do self-guided workouts with a bunch of different static equipment.
You sign up for the class, and know exactly what you’re getting: an intense 60 minute HIIT workout.
There are numerous education franchises out there, and Mathnasium is arguably the most successful of them are.
Many brands in this space offer multiple options for students, whether it’s a STEM curriculum or otherwise.
Mathnasium has only taught math, and that singular focus has allowed them to build a brand to be known as the best option for young kids struggling with mathematics.
It’s no surprise they were acquired for 9 figures.
Start Simple, Expand Later
Clearly the simple business model can work wonders. But it’s also been proven that it can solely be a starting point for your business.
The picture above shows an early version of Amazon’s home-page. Today they may truly be the everything store, but on day 1, they sold just one item: books.
Their whole brand was built on being the world’s biggest online book seller. Amazon’s rise directly correlates with Barnes & Nobles demise, but they’ve obviously expanded to far more items.
In the fast-food world, brands like McDonald’s and Chick-Fil-A were notorious in the early days for having super simple menus, with just 3-10 items for each brand.
Today, McDonald’s has expanded their menu to a whopping 145 items, while Chick-Fil-A has grown to 45 menu items. While I do love the Cane’s approach to business, who am I to say that diversifying at a later stage isn’t a good idea? McDonald’s and Chick-Fil-A’s value has only increased over the years.
You may not need to have a narrow focus forever, but for franchises in the earlier stages of their life cycle, being better than everyone else at 1 thing is underrated.
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