6 takeaways from a fusion fast casual’s recent PE infusion

Combining the terms “kimchi” and “cilantro,” Chi’lantro is slinging Korean-Mexican mashup dishes like Korean barbecue tacos and its signature kimchi fries throughout Austin, Texas. The fast-casual chain is projected to reach $6 million in sales this year and is gearing up to open its fifth restaurant in early 2017. Coming off a successful appearance on TV show “Shark Tank,” founder Jae Kim discusses what makes Chi’lantro an investable brand and the challenges on growing the concept, including how to deal with the chain’s cashless policy. 

Chi’lantro launched in February 2010, when Kim used $30,000 of his savings and maxed out his credit cards to launch a food truck. Over the years, he launched more trucks to meet demand, but struggled to find an affordable space to launch a brick-and-mortar restaurant. After receiving a Small Business Association loan, Kim had enough funds to open Chi’lantro’s first brick-and-mortar site in 2015—and is now gearing up to open the concept’s fifth permanent site in January. Chi’lantro continues to operate a handful of food trucks, which now are primarily used for catering and private events. Kim estimates that Chi’lantro’s catering division accounts for 20% of the chain’s business. 

Kim credits Chi’lantro’s growth to its menu of Korean-Mexican signatures. A Korean immigrant, Kim says he became a fan of Mexican food when he moved to Texas and found that it shared similarities with the Korean fare he grew up on. “There was the spiciness and the rice, and the pickled jalapenos reminded me of kimchi,” he says. With Mexican fare already prevalent in Austin, he thought it was a good market for serving Korean barbecue fare with a Mexican twist.

Chi’lantro’s menu includes customizable rice bowls, salads, burritos and tacos with proteins such as soy-glazed chicken and spicy pork. Dishes feature traditional Mexican items, including salsa and black beans, alongside Korean ingredients like fried eggs, kimchi and proprietary Magic Sauce, a mayo-based sauce featuring Sriracha and Asian spices. The average check runs between $13 and $15.

Although Kim saw the similarities between Mexican and Korean fare, there was a bit of a learning curve for Austinites, he says. “People would ask, ‘What is kimchi?’ And I would say, ‘It’s fermented cabbage,’ and not a lot of people liked that,” he says, laughing. “So I had to play around with the wording. I started telling people it’s a pickled cabbage, like a slaw.”

But Kim says it took a late-night act of desperation for customers to really start embracing kimchi. One night while the truck was gearing up to serve the bar crowd, Kim wanted to create a dish that utilized low-selling ingredients—including kimchi—so he wouldn’t waste food. “I just put everything that we had on top of the fries and started selling it to people who had no idea what they were getting at 3 a.m.,” Kim says. “And now it’s a staple item for us.”

That dish became known as The Original Kimchi Fries, Chi’lantro’s most popular item. It’s topped with a choice of protein, caramelized kimchi, cheddar and Monterey Jack cheeses, onions, cilantro, Magic Sauce, sesame seeds and Sriracha. 

In addition to Chi’lantro’s menu, Kim credits company culture for aiding in growth. Employees receive amenities such as free food while on shift. The company also hosts semiannual store parties, closing units and letting employees choose a place to hang out—such as a restaurant or bowling alley—with co-workers and their families.

Kim also reflects his dedication to keeping staff (as well as consumers) happy through his own title, which is listed as “founder and server.”

“That’s just my approach in keeping myself grounded,” Kim says. “Customers are our bosses, and I’m here to serve my staff.”

Currently, all Chi’lantro locations are cashless, but that policy could change as the concept expands.

An initial reason for going cashless was due to safety concerns—Kim worried that food trucks carrying cash were a target for robberies. But after some research, Kim realized 85% of customers weren’t even using cash. For those remaining 15%, “We started educating customers six months prior [to going cashless] to see if they would care, and they were completely OK with that,” says Kim. When all units went cashless in April, they would hear from an unsatisfied customer at least once a day, but now he says they barely get negative feedback on the policy. He acknowledges being in a progressive market like Austin probably helps, and that they’ll consider changing the policy as they enter new markets that aren’t familiar with a cashless system.

Chi’lantro is now in growth mode, thanks to a November appearance on the TV show “Shark Tank.” Investor and entrepreneur Barbara Corcoran offered Kim $600,000 for 20% equity in the chain. A Houston location is in the works, and Kim hopes to open more units in Texas. He says he’s researching the best options for expansion, whether it should be through franchising or company-owned locations. Some locations currently have a set menu while others utilize a build-your-own format, and Kim says all future openings will feature the latter style. He says he’s also considering entering the retail space by selling Chi’lantro’s signature kimchi and Magic Sauce.