Raising Cane's co-CEO on CA minimum wage hike: We never compromised on the quality of our product

Let's get to California's minimum wage. You want to talk higher prices? Well, the hike to $20.00 an hour is forcing a rash of quick service restaurants to shutter their doors or layoff employees on mass. But one chain is cranking up the heat in the state. Popular fried chicken joint Raising Cane's already has 95 locations in the Golden State and now plans to open 20 more this year. The hourly wage hike having no effect on its growth plans or employee benefits. Cane offers profit sharing, tuition reimbursement, and even $10,000 toward closing costs for restaurant leaders buying their first home. And breaking news today, Raising Cane's has officially opened its doors in the heart of Tennessee's Music City, the new flagship location on Broadway. For those of you who've been there, you know that stretch of Rd. joins its portfolio of flagship locations in New York City, South Beach, Miami, Chicago and Las Vegas to the Co CEO and C0 0AJ Kumaran live from Nashville in a Fox Business exclusive. AJ There are always two sides to the story. One side of this minimum wage story is that two months after California implemented its new minimum wage of $20.00 an hour, Rubio's Coastal Grill, that's a chain there closed 48 or something like a third of their restaurants. But you're opening more. What makes you different? Good to be here, Liz. You know this business runs on razor thin margins. So when you take up the minimum wage by almost 5 bucks, that is quite high. You know, there is no denying it. But that said, if you have a great product, if you have a great culture, if you're consistently taking care of your crew members for a long time, it's just about continuing on that path. We did have to take a small price increase just like all of the chains had to do, but we never compromised on the quality of our product, our culture, our crew members and our customers should buy us. So we're doing well. We are continuing on our growth path. We want to do great by our customers who expect a great meal from us. So by a smiling crew member and we're able to do both. Today you are opening new 100 new restaurants this year, at least that is the goal. One of them Nashville, TN, the heart of Music City. What we find really interesting about this is this is the first fast casual restaurant or QSR quick service restaurant on that road. They usually don't have those on that road. So how did you manage to do this? And this is going to be one of your flagships. How what kind of sales are you looking at? You know, this is one of our flagships. We don't know about sales yet. It's too early to tell. We just opened it today. In fact, I was there for the opening. I'm here at the studio now and going back again. I think it's going to be very well received. You know, we want to be every community that we go into. We will be a part of that community's fabric, part of the community and everywhere possible. It's a very unique location. In fact, it's the original Baxter Building from the 1800s that we took. It's a historic building. We kept the facade as is and then we build a beautiful restaurant inside. It's one-of-a-kind. But you know, everybody there, they're in the Music City, they're enjoying music going around from bar to bar and then they want that quick meal, a fresh meal. So by a happy crew member and go back out to the Music City again. We are there for them. So we'll see how the sales goes. Let's talk about what's making your crew members happy. You have a whole suite of offerings that are very financially helpful that most fast casual restaurants do not offer. And we're talking about something like, I guess it at the core of everything that you do, you've got $10,000 toward closing costs for restaurant leaders who are buying their first home. You talked about that last year with us and we were blown away by that. How much have you distributed for that program? You know, we have 42 first time home buyers through that program right now. We hope there will be hundreds more. And you know what, what makes really happy is that many, many of them are buying their first home in their entire family. They're the first one to do so. You know, the one thing that you mentioned, the core of what we do is actually appreciation, appreciation for our crew members who work very, very hard to serve our customers, who spend their hard earned money with us. So it's all the way around showing appreciation and for our crew members, it's internally promoting them, showing them opportunities and being a part of their journey. Tuition, let me just interrupt you. Tuition reimbursement, fully funded high school diploma program, free online learning. So you're helping these employees better themselves and, and hopefully that works in your favor when it comes to employee retention. But let me bring you back to what you said at the top of the show that yes, you had to raise your prices just a bit. This at a time when McDonald's is cutting its prices and Starbucks is cutting its prices, makes me wonder, are you going to have to reverse that and Are you ready to do that? You know, I don't think so because we have always priced our product right. It was not about it is making a healthy margin so that we can continue growing, so we can continue providing opportunities for our crew members and our future leaders. So we will never compromise on that. The folks who are cutting cost, I mean I don't know where it's going to come from because restaurants are not razor thin margins. You know it's not like it's a stacked up margin business. So we are we're not taking extra margins or anything with this price increase. So we don't think so. We're not planning on any discounting or anything like that. We've never done that in the history of our business. We just we are that everyday value a great fresh meal for a good price. Opening another 20 locations in California, just as many are close and pretty interesting and we'll continue to follow it. AJ, thank you. Thank you so much, Happy to be here.