Chi’Lantro Korean BBQ
DEAL
EPISODE SUMMARY
🕓 Air Date: November 11, 2016
Asking For:
$600,000 for 15%
Investor:
Barbara Corcoran
Deal:
$600,000 for 20%
PRODUCT SUMMARY
Chi'lantro BBQ serves Korean barbecue in various forms, including bowls and their signature kimchi fries, aiming to make Korean food an everyday option.
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Background Story
Jae Kim, the founder and CEO of Chi’lantro BBQ, has a compelling background that intertwines his South Korean roots with the American dream. Born and raised in South Korea, Jae, at the age of 11, embarked on a journey to the United States alongside his mother and sister in pursuit of a new life. Settling in Austin, Texas, Jae developed a deep appreciation for Korean cuisine, especially dishes like soy, kimchi fries, and tacos, which he later incorporated into his culinary ventures.
Despite facing initial challenges and limited financial resources after college, Jae’s passion for Korean food drove him to kickstart his entrepreneurial journey. Unable to afford the capital for a traditional restaurant, he made a strategic move by launching a food-truck business, a decision that would prove instrumental in the growth of Chi’lantro BBQ. Over time, Jae’s single food truck evolved into a thriving fleet, complemented by the establishment of three successful fast-casual restaurants.
Jae’s tenacity and dedication to his craft eventually earned him a coveted spot on “Shark Tank.” Having applied twice before without success, he returned with an expanded and flourishing business, determined to secure the funding necessary for his grand vision of building the Chi’lantro empire. The inspiration behind Chi’lantro BBQ lies in Jae’s desire to make Korean barbecue accessible for everyday consumption. By infusing traditional Korean flavors into popular formats like bowls and innovative dishes such as the original kimchi fries, Jae aims to bridge the gap between the exotic appeal of Korean cuisine and its integration into the mainstream American culinary scene.
The Product
Chi’lantro BBQ offers a diverse and flavorful menu centered around Korean barbecue, providing a unique twist to traditional dishes. The flagship products include customizable Korean barbecue bowls and the renowned original kimchi fries. The Korean barbecue bowls allow customers to personalize their meals, starting with a choice of brown rice, white rice, or noodles as a base. Proteins such as soy-glazed chicken, Korean barbecue beef, and spicy pork serve as the main components.
Fresh and vibrant vegetables, including lettuce, carrots, purple cabbage, cilantro, and onions, are added on the side. The culmination of flavors is enhanced by a selection of signature sauces, including the mysterious “magic sauce,” adding a distinctive touch to each bowl. One of the standout offerings, the original kimchi fries, features a bed of fries generously topped with Korean barbecue, caramelized kimchi, and the special magic sauce.
This fusion dish encapsulates the essence of Chi’lantro’s innovative approach to Korean cuisine, creating a harmonious blend of traditional flavors with a contemporary twist. Customers can enjoy Chi’lantro BBQ’s offerings through their fleet of food trucks and fast-casual restaurants in Austin, Texas. The company has garnered popularity for its delicious and accessible Korean-inspired dishes, becoming a go-to choice for those seeking a unique and satisfying dining experience.
How It Went
The company’s position before Shark Tank
Chi’lantro BBQ has demonstrated robust performance, positioning itself as a successful player in the culinary scene. In the last fiscal year, the company achieved an impressive $4.7 million in sales, showcasing a strong financial health. The revenue breakdown highlights the contribution of both the fleet of food trucks and the fast-casual restaurants, with food trucks generating approximately $300,000 to $400,000 each and restaurants ranging from $1 million to $1.5 million per unit.
The company’s growth has been fueled by a combination of strategic expansion and a menu that resonates with a diverse customer base. Known for their Korean barbecue bowls and innovative original kimchi fries, Chi’lantro BBQ has carved a niche in the market by offering a fusion of traditional Korean flavors with contemporary twists. Chi’lantro’s success is further underscored by its ambitious vision outlined by founder Jae Kim—a plan to establish a Chi’lantro empire with 15 restaurants generating $15 million in revenue. Despite this growth trajectory, Jae emphasized the need for additional funding during the “Shark Tank” pitch to accelerate the company’s expansion. The profit margin is reported at a commendable 15%, indicating a healthy financial operation.
The company’s current structure comprises a fleet of food trucks and three fast-casual restaurants in Austin, Texas, with plans for further expansion. In terms of funding, the pitch highlighted that Chi’lantro BBQ was seeking a $600,000 investment for 15% of the business, demonstrating a strategic approach to securing capital for their expansion plans. The available capital and financial stability of the company provide a solid foundation for future growth, positioning Chi’lantro as a promising player in the competitive culinary market.
The Negotiations:
The negotiation process during Chi’lantro BBQ’s appearance on “Shark Tank” was dynamic and ultimately resulted in a successful deal with Barbara Corcoran. After presenting his $600,000 ask for 15% of the business, Jae Kim faced initial hesitations from the Sharks due to concerns about the scalability and uniqueness of the restaurant business. Chris and Mark bowed out early, expressing their preference for early-stage ventures rather than scaling existing restaurants. Lori, Kevin, and Daymond also opted out for various reasons, leaving Barbara as the sole interested Shark.
Barbara, having a background in the restaurant industry, expressed her admiration for Jae’s journey and offered $600,000 for a steep 30% equity stake in the business. Understanding the value Barbara could bring to Chi’lantro’s growth, Jae countered the offer, proposing a more favorable 20% equity stake. Barbara, recognizing the potential and perhaps swayed by the delicious food, agreed to the counteroffer. The deal was sealed at $600,000 for 20%, signifying a mutually beneficial agreement for both parties.
Barbara’s interest in Chi’lantro extended beyond mere financial investment; she positioned herself as a savvy partner with valuable insights into scaling restaurant businesses. This strategic alignment resonated with Jae, making Barbara the ideal Shark to propel Chi’lantro BBQ into its envisioned empire. The negotiation showcased Jae’s business acumen and Barbara’s willingness to adjust terms for a fair deal. Ultimately, the collaboration marked a triumph for Chi’lantro BBQ, securing not only the financial support needed but also a seasoned partner to navigate the complexities of scaling a successful restaurant business.
