Cannabis-themed sandwich brand Cheba Hut opened its 50e location recently in Washington, marking the company’s continued growth outside of its Southwestern origins.
Founded in 1998, Cheba Hut was born in Arizona, and in the years since the brand has grown there, into Colorado and New Mexico. Cheba Hut has overtaken this region in recent years, however, with stores now open in 15 states.
In June, Cheba Hut franchisee Doug Engerman opened the latest unit in Bellingham, Wash., after discovering the brand in Colorado. Although he found the brand’s cannabis theme entertaining, it was the product that inspired him to open his own.
“You don’t have anything if you don’t have a good food item, and that’s what hooked me,” Engerman said. “My kids went to college in the Denver area where they had Cheba Huts and they always brought it to our hotel. I have knocked down the quality of the food.
Engerman said he was able to learn more about Cheba Hut while working as a consultant in Fort Collins. After getting a good rundown on the concept, Engerman reached out and began communicating with Cheba Hut head office.
“They’ve been very careful about building the brand in a certain way, not to be overcommitted and overextended to provide franchise opportunities,” Engerman said. “It’s really good news that they are vigorously protecting the brand. As a franchisee, it’s very attractive.
Engerman’s Cheba Hut has done well so far and he has another one under construction in Seattle that should open before the end of the year. Cheba Hut’s relationship manager, Seth Larsen, said the brand’s growth will continue across the 15 states it operates in before branching out further.
“Over the next two years, we’re going to be focused on backfilling the states we’re in,” Larsen said. “We would like to continue our growth in Texas and Florida. We have no interest in going northeast for the next two years.
These new units, like others built before them, will feature the brand’s marijuana-themed food decor and names. “We make the distinction because there are no cannabis products in the food offerings,” Engerman said. “It’s a cheeky concept where we embrace cannabis culture. There are a lot of visually fun things in the stores, as each features a custom mural by a local artist.
“That’s not what drives us completely,” Larsen said. “I would say anyone can feel comfortable in a Cheba hut. You don’t get our average unit volume to be exclusive to smokers. It’s really more about giving the opportunity to present themselves as their authentic self. We are an escape that people can have on their lunch break.
Cheba Hut’s AUV is $1.48 million, with its top performing location achieving sales of $2.18 million, as shown on the company’s website. The cost of opening a location ranges from $575,900 to $939,700.