What Raising Canes Can Teach Us About Margin and Simplicity
And Why Craveability Beats Complexity
What does the future hold for business? Ask nine experts and you’ll get ten answers.
It’s a bull market. It’s a bear market. Rates will rise or fall. Inflation’s up or down. Can someone invent a crystal ball?
Over 43,000 businesses have future-proofed their business with NetSuite, by Oracle - the number one AI cloud E.R.P., bringing accounting, financial management, inventory, and HR, into one platform. With real-time insights and forecasting, you’re able to peer into the future and seize new opportunities. Whether your company is earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities.
Download the CFO’s Guide to AI and Machine Learning for FREE.
At the bottom of this post you’ll get a quick round up on who’s taking the CFO seat at PE-backed companies. Scroll down for the latest from Marketbridge, Orbus Software, and Iris Software.
A False Tradeoff: Speed and Margin
Sam Walton had a ruthless saying: “Your margin is my opportunity.” What he meant was simple… if you gave him an inch to provide more value at a lower price, he’d take a mile and bury you.
He could do this because he knew that in the long run, he’d earn a higher customer lifetime value. He understood the flywheel and was willing to play the long game.
David Senra recently had a conversation with the founder of Raising Cane’s, Todd Graves. The company sells a lot of chicken fingers…. Like $6 billion a year worth of chicken fingers.
Given the volume the company does, the conversation naturally led to a discussion on trading speed for margin. Graves explained how CFOs have historically urged him to optimize margin by shaving costs in small ways:
“I’ve had CFOs over time tell me, ‘If we just cut this by a little bit... because it’s a penny’s business... we’ll do so much better.’
But if you start cutting a penny here and a penny there, then it’s death by a thousand cuts and your food just isn’t craveable.”
-Todd Graves, Founder of Canes
While it’s tempting to chip a basis point off here or there, maybe outsourcing a department overseas or reducing your customer support ratio for a janky, unproven AI tool, each move compounds in the wrong direction.
It’s a lesson that should ring louder in software.
In PE-backed companies, margin expansion is gospel. But it can create a false tradeoff, one where we confuse a series of small cost cuts with smart longer term strategy.
Craveability Beats Complexity
Steve Jobs used to say, “You want people to lust over your products.”
And to do that you need to manically focused on doing the main thing right.
Graves was maniacally focused on one thing: quality, delivered fast. That focus cascades into every operational decision:
“I wanted to create that craveable product first and foremost.
And then I saw the value of how quick I could do the drive through.
A singular product focus with one menu item… You’re making basically one meal with either, three, four, or six chicken fingers.”
Cane’s doesn’t use heat lamps. Because heat lamps are a shortcut, and shortcuts kill the product.
When the fast-casual industry leans on limited-time offers (LTOs), new SKUs, and rotating menus to boost revenue, Graves stays the course:
“Every new product is a distraction. Management and crew have to learn it, prep it, sell it, and hit sales goals. Then 60 days later, it changes. And again. It pulls focus from the thing we’re actually great at.”
Sound familiar?
We’ve all run spiffs for underperforming SKUs. We’ve distracted reps with bundles no one understands. We’ve pushed customers into unnecessary complexity just to hit the quarterly upsell target.
We introduce friction into the drive-thru because we’re desperate to sell the McRib — and forget that most of our revenue still comes from Big Macs.
Expanding Multiples
Instead of optimizing for short-term EBITDA, Graves focused on long-term multiple expansion:
“If you franchise everything, you earn ~6% of that store’s revenue.
Franchised businesses trade at maybe 4–7x EBITDA.
But we own the restaurants. We focus on quality.
And we’re valued at 20x+ EBITDA.
That’s how you get to a $20+ billion business.”
This is the multiple arbitrage that every PE operator understands:
You don’t just want more EBITDA… you want a better-quality EBITDA stream.
So what drives a premium multiple?
Clean pricing
Repeatable motions
High retention
Low customer friction
Operational leverage that scales
A business buyers understand in five minutes
Buyers don’t pay up for complexity. They pay up for systems that work.
Speed is Margin
What’s so elegant about the Cane’s model is that speed is the margin lever, but only because the system is simple enough to move fast.
“We’re at 2 minutes, 35 seconds in drive-thru time.
Every two seconds of order time = ~1% of sales.
At $6 billion in revenue, that’s $60 million in throughput.
Add complexity, and those seconds compound the wrong way.”
Too often in software, we obsess over basis points instead of seconds. We count pennies and miss the $60 million hiding in our sales velocity.
So here’s the translation for operators:
Stick to your concept: The main product is the main product. Don’t let GTM complexity dilute the value prop.
Don’t use heat lamps: Cheap tech and labor debt (e.g., under-trained AI, outsourced CX) lowers perceived quality.
Narrow your menu: Trim your SKU list. Kill features that don’t pull their weight. Make it easy for reps and customers to say yes.
Don’t jump at shiny objects: Short term product pushes dilute focus. Throwing spiffs at reps may work against you, incenting the wrong behavior in the medium term.
This isn’t just about simplicity for its own sake. If you are reading this you are a smart person who can handle complexity. So you should also realize that simplicity accelerates throughput. And throughput drives margin, sustainably.
“Don’t try to be all things to all people, or you’ll be nothing to everyone.”
— Todd Graves
The best software companies today are craveable and fast. The trick is building a system simple enough to be both.
Leveraged Moves
Recent C-suite shifts across the private equity landscape… because people moves are performance levers too.
Marketbridge announced Bob Ray as CEO to lead expansion efforts as a unified go-to-market operating partner for enterprise organizations—integrating strategy, insight, data, orchestration, and activation with emerging AI-enabled intelligence layers. Ray is a veteran agency CEO who previously led Markle B2B with the Dentsu Group. Marketbridge was acquired by a portfolio company of PE firm RTC Partners in 2023.
Orbus Sotfware, a leading global provider of enterprise transformation software, appointed Steve Fulton as CEO. Fulton brings more than 25 years of experience in senior leadership roles, most recently as President of Secureworks, where he helped drive the acquisition of the company to Sophos for $859M. Orbus Softward is owned by PE Firm SilverTree, which acquired it in 2021.
Jens Ulrik Knudsen joins IRIS Software Group as CFO, bringing 20 years of international experience scaling finance functions for high-growth businesses. Knudsen most recently served as Interim CFO of Aceve, a private equity backed SaaS platform. Leonard Green & Partners and Hg both have co-controlling stakes in the company with ICG holding a minority stake.
Thanks for reading, and make sure to check out our sponsor, NetSuite.
Download the CFO’s Guide to AI and Machine Learning for FREE.
Outstanding piece on the false tradeoff between margin and quality. Graves' insight about death by a thousand cuts resonates powerfully: every basis point shaved might look good on a CFO dashboard, but compounds into a degraded customer experience that erodes lifetime value. The 20x valuation multiple for company-owned stores versus 4 to7x for franchised operations perfectly illustrates how quality EBITDA commands premium pricing. What most operators miss is that simplicity itself is the margin lever. When you trim SKU bloat and eliminate operatonal friction, you unlock velocity gains that dwarf the pennies saved through cost cutting, and those velocity improvements scale without degrading the core product.