Tom and Chee - Shark Tank Update

Tom and Chee appeared on Shark Tank Season 4 as an innovative gourmet grilled cheese restaurant franchise created by entrepreneurs Trew Quackenbush and Corey Ward, who developed a concept combining the classic comfort foods of grilled cheese and tomato soup with creative, upscale variations that appealed to both children and adults. The business started as a single location in Cincinnati where the duo experimented with unique combinations like grilled cheese donuts, specialty melts, and premium ingredients that elevated the traditional lunch staple into a full dining experience.

At the time of their Shark Tank appearance, the company had achieved impressive sales of $1.5 million from their corporate store in one year, with their first franchisee generating over $100,000 in just one month, demonstrating strong market demand for their elevated comfort food concept. The entrepreneurs had already begun franchising operations and were seeking $600,000 for 10% equity, representing a $6 million valuation, to fuel rapid expansion across the United States.

Their business model focused on franchise development, offering potential franchisees a proven system with strong unit economics, popular menu items, and the growing trend toward gourmet comfort food that justified premium pricing compared to traditional fast-food competitors. The founders' passion for their product was evident as they served the Sharks their signature grilled cheese donuts during the pitch, creating an immediate positive impression that helped demonstrate the unique appeal of their concept and the potential for widespread consumer acceptance across diverse markets.

Tom and Chee successfully secured investment on Shark Tank when Mark Cuban and Barbara Corcoran partnered to invest $600,000 for 15% equity, with each Shark contributing $300,000 and gaining franchise rights to Texas and New York respectively, though Mark later backed out and Barbara invested a smaller amount than originally agreed. The initial success was remarkable, with the company receiving over 9,000 franchise requests following their television appearance and rapidly expanding to 23 locations with plans for 170 stores under contract, generating over $14 million in sales within a few years of the show.

However, the aggressive expansion proved to be the company's downfall, as they scaled too quickly without proper infrastructure support and accepted many franchisees who lacked food service experience, leading to operational challenges and inconsistent quality across locations. By 2017, the company's assets were seized by their bank due to financial difficulties, with the business subsequently acquired by GSR Brands, the parent company of Gold Star Chili, for an undisclosed amount.

Under new ownership, GSR determined that the franchise operation had grown too quickly and began a careful rebuilding process, reducing from a peak of 35 locations down to 23 at acquisition, then further to just 7 locations by 2024. The company has been rebranded as Tom & Chee (replacing the 'and' with '&') and now focuses on a leaner business model with 'melts' instead of grilled cheese, using ovens to reduce prep time from 6-7 minutes to 90 seconds.

As of 2024, Tom & Chee continues operating 7 locations under GSR's guidance with plans for 'rapid expansion' across the USA, estimated annual revenue of $5 million, and a new dual-concept approach that combines Tom & Chee with Gold Star Chili locations, representing a more sustainable approach to growth that prioritizes operational excellence over rapid expansion.