Gourmet grilled cheese not as hot as previously thought?
Tom + Chee, the gourmet grilled cheese franchise that gained national exposure after its appearance on season four of Shark Tank, may have grown faster than perhaps it should have. After receiving an equity investment from "shark" Barbara Corcoran in 2013, Tom + Chee began to rapidly expand, growing from three locations to upwards of 50 with reportedly "over 25,000 franchise requests." (Shark Mark Cuban was to be Barbara's partner in the investment, but felt it would be better if all the stores were corporate owned rather than franchised. Founders Corey Ward and Trew Quackenbush didn’t want to do this, so Barbara ended up as the sole "shark" investor.)
Side note: If you watch Shark Tank, you know that one of the most common questions the sharks ask is "is this protected?" or "is this proprietary?" I may be crazy but throwing cheese and bread together and grilling it is about as "protected" as a chain of pie shops called "Ap + Pi."
Well placed industry sources indicate at least one local franchise of the Cincinnati, Ohio-based chain wants out of their two locations in Buford and Atlanta. Bibby Donnelly Investments, LLC owns the two restaurants which opened in early 2015 and early 2016 respectively. Victor Bibby and Brian Donnelly are the men behind the franchise and may be well known to those in the banking community for this reason.
While I can find no evidence that the duo had prior experience owning or managing restaurants, I feel as though there are a number of factors contributing to what is surely a struggling operation.
Both the Atlanta restaurant, within the new Westside Ironworks development on Howell Mill Road, and the Buford restaurant, in a new-ish center on Buford Drive near the Mall of Georgia, are in high rent centers. Strangely, the pricing structure, while slightly higher than the menu prices at the Kennesaw location (owned by a separate franchisee) located in a low rent district, is still below what is likely necessary to sustain the business.
|Pesto + Turkey grilled cheese|
The basic Tom + Chee sandwich (diced tomato + garlic seasoning + mozzarella + cheddar + hardy white) is $4.95 while The Longhorn (Roast beef + gouda + avocado + tomato + red onion + hardy white) is one of the most expensive items at a mere $6.95.
I first questioned the viability of the Westside location early last year when I broke news of its planned opening.
If Tom + Chee were doing Jimmy John's-like volume, it might be OK to have such economical menu items. Unfortunately, Tom + Chee is still a growing brand and does not (yet) have the following or market that Jimmy John's has garnered. The Atlanta location does offer delivery from services like GrubHub and DoorDash.
|Reserved parking at Tom + Chee Westside|
Additionally, parking is a HUGE challenge at Westside Ironworks. Popular restaurants Barcelona Wine Bar and O-Ku, a sushi restaurant, monopolize much of the center's limited parking for valet service at night. Parking during the day can also be a challenge, so much so, that Tom + Chee has exclusive parking (four spots) until 8PM daily. Tom + Chee is open until nine and even invested in a city of Atlanta alcohol license in an effort to increase revenue. The likelihood of beer & wine sales during the day is limited making the sales during evening hours that much more important, but with limited parking, this plan is hampered.
|Beer & wine options at Tom + Chee Westside|
One other striking observation in my visits to both the Buford and Atlanta locations was the use of Stanley automatic sliding door systems. These systems, often found in grocery and pharmacy stores, are a significant expense for an economical restaurant. The Kennesaw and Alpharetta restaurants use standard doors, something that perhaps should have been done in Buford and Atlanta.
|Stanley electronic doors at Tom + Chee Westside|
While I truly believe the food is pretty good at Tom + Chee, the chain has been experiencing some growing pains as it continues to open additional franchised units. The chain, which started under a tent near a park in Cincinnati perhaps have should have stayed a tent or food truck. A brief online search shows that at least ten Tom + Chee restaurants have closed, with about 31 still in operation.
Tom + Chee locations have closed in Olathe, KS, Lansing, MI, Centennial, CO, Buchanan, WI, Lincoln, NE, Maumee, OH, three locations in the Columbus, OH market ( University District Hilliard & Pickerington), and Carrboro, NC (closed late last year after six months in operation)
Strangely, some of the Tom + Chee struggles are similar to those currently being experienced by local pizza franchise Uncle Maddio's Pizza. Uncle Maddio's started at Toco Hills in Atlanta in 2009, the same year as the original Tom + Chee tent, and had been aggressively expanding via franchising. Like Tom + Chee, Uncle Maddio's claims to have tons of interest and a multi-hundred unit pipeline of upcoming locations.
Both chains may have done too much too soon, with each chain having closed about ten locations, and neither having crossed the 50 unit threshold.
In mid 2014, Tom+Chee laid off six employees from its downtown Cincinnati headquarters. "It's something we have to do to make sure we keep growing in the right way," Ward said. "We don't want to get ahead of ourselves."
I think they got ahead of themselves.
What are your thoughts on the Tom + Chee brand and its Atlanta area locations? If Tom + Chee locations in Buford and Atlanta are in fact for sale, what would you like to see open in their place, or can the business be saved? What would you pay for a "gourmet grilled cheese" sandwich?
Please share your thoughts below.