August 1, 2022

Last week, in several parts of the United States, long lines formed at convenience stores, gas stations and other retail outlets which sell lottery tickets. The frenzy to buy tickets was driven by the size of the winning prize for the Multi-State Lottery rising to $1.3 billion. This billion-dollar plus amount was due to the accumulation of prizes from 29 previous consecutive drawings which had no winners.

AJ Kumaran was among those in line at a gas station in Dallas. Twice last week, for two separate drawings, he waited for hours to purchase $100,000 in lottery tickets – one for each of his 50,000 employees at $2 each.

“Let me tell you, it’s nerve-racking being at a gas station with $100,000 in cash,” Kumaran, Co-Chief Executive of Raising Cane’s, a fast-food restaurant chain, told The Washington Post.

Raising Cane’s essentially serves four items in different combinations: breaded fried chicken fingers, crinkle cut French fries, coleslaw and soda. The privately-owned chain, based in Baton Rouge, Louisiana, has more than 600 restaurants in 35 states in the U.S. In 2020, it had $1.8 billion in sales, according to QSR Magazine.

Some reporters pointed out that the company could have given the money to the employees instead of wasting it on a lottery where the odds of winning was 1 in more than 300 million. “You spent $100,000 on tickets and you lost, and you’re going to do it again? Why not give the money, give $200,000 to your employees?” a CNN reporter asked Kumaran.

Raising Cane’s employees “work very hard every day, and we’re doing this for them to have fun and test their luck,” Kumaran told The Washington Post. If one of Raising Cane’s tickets had won, each employee would have gotten an equal share of the prize - roughly $13,000.

Quite apart from seeking to boost the morale of his employees, Kumaran’s lottery ticket purchases were a big marketing win for the restaurant chain. Last week, each of Kumaran’s purchases got wide and free media publicity for Raising Cane’s. Attracting similar public attention, and that too via the less effective means of buying advertising, would likely have cost the company several million dollars.  

The money for the tickets came from Raising Cane’s co-CEO Todd Graves, who founded the chain in 1996 and named it after his yellow Labrador. Numerous bankers turned down Graves application for a loan to fulfil his dream of starting a restaurant in Baton Rouge. He raised the funds by working as a boilermaker at a refinery in Los Angeles and a commercial salmon fisherman in Alaska.

Raising Cane’s tickets did not win the lottery. The winning ticket was sold in a suburb of Chicago. In 2021, Raising Cane’s was one of three restaurant chains listed on Glassdoor.com’s top 100 places to work in the U.S., across all industries. It was also the only company based in the state of Louisiana to make the list. Currently Cane’s has a 3.8 star ratings, out of five stars, from roughly 3,000 employees who posted about their work experience at the company on Glassdoor.com.

Soon after the COVID-19 pandemic hit in March 2020, Raising Cane’s business dropped by 30%. Kumaran and Graves stopped taking their salaries for the rest of the year, according to Inc.. They asked employees to work fewer hours in order to help save the jobs of their fellow employees. Since almost all of Cane’s locations had drive-through counters, the outlets continued operating during the pandemic. The chain’s revenues in 2020 exceeded Kumaran and Graves’ expecations by 10%.

Ajith (AJ) Kumaran is a rare Indian American CEO running a non-technology company in the U.S. He joined Raising Cane’s in 2014 as the Chief Operating Officer (COO); three years later he was named president. Earlier in 2012, he was appointed COO of Dubai-based Gourmet Gulf, which then operated 52 Gourmet Burger Kitchen, Hard Rock Café and other restaurant franchise restaurants in the United Arab Emirates, Saudi Arabia, Kuwait, Oman, Bahrain and India.  

Previously, for fifteen years, he was a senior manager in the U.S. including at Buffets Inc., the parent of Old Country Buffet and HomeTown Buffet. At its peak, Buffets operated 650 locations in the U.S. In 2021, a successor company filed for bankruptcy, burdened by debt, poor management and hurt by the COVID-19 lockdown, according to Restaurant Business.

Kumaran earned a Bachelor of Arts degree from the Cesar Ritz Colleges, Switzerland, and an Executive MBA from Cornell University.

The titles on Raising Cane’s business cards for both Graves and Kumaran describe them as “fry cooks and cashiers.” Cane’s business strategy is based on finding and retaining good talent. So the company offers financial help to employees to attend college and has a nearly year-long internal training program for its store managers. About two thirds of its store and other managers are promoted from within. Last year, Cane’s increased wages for most employees by about 15 percent.

Raising Cane’s culture is “rooted in appreciation,” of employees, Graves told QSR Magazine. He seeks to honor and encourage his crew “because my crew is helping me achieve my dream.”

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