How it beat KFC to become No. 3 chicken chain

With a simple menu and company-owned restaurants, Raising Cane’s has quietly surpassed KFC in annual U.S. sales, becoming the third-largest chicken chain in the country.

The accomplishment follows a recent winning streak for the 28-year-old company, which has spent the last decade expanding outside its home bases in Louisiana and Texas. Its restaurant footprint has grown to more than 900 locations, up from just over 500 in 2020. Last year, it opened 118 restaurants. About 100 are expected to open this year, with another 200 or so in the development pipeline.

Cane’s told CNBC that its system sales rose to $5.1 billion last year, more than double its total in 2021. Last year’s total was lifted by a 10.8% increase in traffic, even as consumers pulled back their overall restaurant spending. Cane’s trails only Chick-fil-A and Restaurant Brands International’s Popeyes in U.S. sales.

But Cane’s founder Todd Graves has even bigger ambitions for the chain he started at age 24. He has said that he wants Raising Cane’s to become a top 10 restaurant chain, with more than $10 billion in annual sales. The chain is ranked 18th – up 10 spots from a year earlier – on Technomic’s list of U.S. restaurant brands based on 2024 system sales.

Cane’s is inching closer to Graves’ goal every day. Last year, the chain reported its first $1 billion quarter, and its speedy expansion should further lift sales. It expects to operate nearly 1,000 restaurants by the end of 2025.

“All indicators say that we should get there before the end of this decade,” said AJ Kumaran, who shares the title of co-CEO with Graves. “We’re climbing the ladder slowly, but we’re humble about it.”

Of course, in a crowded space where major players like Popeyes, Chick-fil-A, McDonald’s and even Taco Bell are competing for diners craving chicken, sustained growth is not guaranteed. Consumers could also continue watching their spending in an uncertain economy.

Graves founded Raising Cane’s in August 1996, in part using money from working in an oil refinery and fishing for sockeye salmon in Alaska. The name came from his labrador retriever, Raising Cane. (He’s continued using the name for every subsequent dog he owns; Raising Cane III, born in 2017, is the latest.)

The first Cane’s location, which still exists, opened at the North Gates of Louisiana State University in Baton Rouge. Then came a second restaurant, followed by many more.

In the nearly 30 years since Cane’s founding, its menu hasn’t budged: chicken fingers, crinkle-cut fries, Texas toast, coleslaw and the all-important trademark sauce. Even its sandwich is simply three chicken fingers with lettuce and Cane’s sauce on a bun.

Cane’s doesn’t plan on changing that recipe anytime soon.

“We do not get into value play. We do not get into limited-time offers. When our customers pull into the drive-thru or walk through the doors, they immediately know what to expect,” Kumaran said.

Sandra, 60, a home health aid in New York City, said she eats a kid’s meal from Raising Cane’s once a week, calling it a great value for the price.

“I like Popeyes, but I love Raising Cane’s,” she told CNBC after a recent afternoon visit to the city’s Astor Place location, adding that it’s “just good food.” 

Kumaran, a seasoned restaurant executive, joined Cane’s as its chief operating officer in 2014 after holding similar roles at restaurant company Gourmet Gulf LLC in Dubai, United Arab Emirates, and Old Country Buffet owner Buffets Inc.

Three years later, Cane’s named Kumaran co-CEO, just in time for a massive boom in fast-food chicken chains.

Chick-fil-A was finally expanding past its Southeastern stronghold, opening its first Manhattan location in 2015 as part of a nationwide expansion plan. Four years later, Popeyes unveiled its first chicken sandwich sold nationwide, kicking off the so-called chicken sandwich wars and selling out of the initial launch quickly. Upstarts like Dave’s Hot Chicken, which recently sold a majority stake to Roark Capital for nearly $1 billion, were in their early days.

While the boom in chicken at fast-food restaurants may seem like a recent trend, the obsession has been a long time coming.

Since 1960, U.S. consumption of chicken has grown steadily. In 2025, the national per capita consumption is expected to hit 104 pounds, up more than 25% over the last 15 years, according to data from the National Chicken Council.

“I think it’s a change in people’s diets and their mindsets,” said Andrew Sharpee, co-leader of AlixPartners’ restaurants, hospitality and travel practice. “It’s still a cheaper alternative than where beef prices are. It’s easier on the wallet, and it’s easier for these companies to execute.”

Plus, chicken offers variety, from the breading to the seasoning to the sauces used for dipping. Diners can visit Wingstop if they want wings, Popeyes for crunchy fried chicken or Chick-fil-A for boneless grilled nuggets.

“It’s come a long way, right? Chicken is not this heavily processed, frozen-to-fryer product. It’s fresh, battered in stores,” Sharpee said.

In recent years, other chicken players have slowly expanded their menus with limited-time offers and other draws for diners. Chick-fil-A has been leaning into seasonal drinks, like its Peach Milkshake. Popeyes is selling Chicken Wraps for a limited time this summer.

And KFC’s menu has become sprawling, from bowls to waffles — a trend that could have helped Raising Cane’s and its simple offerings gain ground.

In the first quarter, KFC’s U.S. same-store sales shrank 1%, its fifth straight quarter of declines. The ubiquitous fried chicken restaurant now ranks as the fifth-largest chicken chain, trailing both Cane’s and Wingstop by U.S. sales, according to Technomic data.

These days, Cane’s isn’t just competing with other chicken players. It’s also facing more heat from other fast-food chains’ forays into poultry, from McDonald’s McCrispy Strips to Taco Bell’s sold-out Crispy Chicken Nuggets. But Cane’s isn’t sweating the extra competition.

Cane’s has also attracted new consumers with viral marketing, from a collaboration with singer Post Malone to a sponsored visit from actress Sarah Snook after her Tony win earlier this month.

But Cane’s speedy expansion is likely the biggest reason consumers have become more aware of the brand.

Today, Cane’s has locations in 42 states. New York, Massachusetts, California and Florida are among the markets it is targeting with new restaurants. Most of Cane’s new restaurants will be located on the coasts, although Kumaran said the company is growing “everywhere.”

Outside the U.S., its business is smaller but growing. Cane’s has locations in the UAE, Bahrain, Kuwait, Saudi Arabia and Qatar and is looking for more opportunities elsewhere, according to Kumaran. Its international expansion may involve straying from its domestic strategy of operating its own locations and instead franchising the concept or entering into a joint venture agreement with a partner.

When opening restaurants, particularly in the U.S., Cane’s isn’t focused on maximizing profitability, according to Kumaran. Instead, the company wants to ensure that its locations can endure a long life cycle – from a high schooler’s homework spot to a family restaurant once that customer starts a family.

“Do we have a good population density? Do we have the traffic drivers such as schools and other establishments and things like that? We look at that, and we have very good data points to look at backwards, as well as project out what the future is going to look like in a community, and then we go after those locations,” Kumaran said.

That real estate strategy has helped Cane’s in the long term.

“I think they’ve done a great job in terms of picking the best locations. That gives them access to these potential high repeat visitors,” Hottovy said. “They’re pulling in across all demographic groups, skewing towards a higher household income, but really doing a good job kind of front and center with a lot of consumers.”

And the success of Cane’s locations helps fund even more expansion. The cash from Cane’s booming sales gets reinvested back into the business, going toward building even more restaurants. And since the chain’s new restaurants perform so well, they pay for themselves quickly, according to AlixPartners’ Sharpee.

“Their model seems to work given the size of their [average unit volumes] and keeping the discipline that they want to keep, from a culture and execution standpoint,” he said.

The company relies on traditional lines of credit rather than seeking outside investment to grow the business, according to Kumaran. The company has no plans for an initial public offering, and Graves still owns the majority of the company, giving him an estimated net worth of $17.2 billion, based on Forbes estimates.

For now, Cane’s plans on sticking with that strategy.

“We are focused on growing our business, and we take a very long-term viewpoint in the business,” Kumaran said.” And we have no interest in going public or taking private investments, etc., at this stage at all.”