David Timmons has been a Cheba Hut “Toasted” Subs franchisee long enough to remember when the brand had fewer than a dozen units open.
A quarter century after its founding in Arizona, Cheba Hut, a cannabis-themed restaurant concept, has 68 locations in 15 states.
Timmons and his partner Kyle Archer at Elevated Inc. are Cheba Hut’s largest franchisees with their 22nd location opening this month in Englewood, Colorado. The new store comes 14 years after Timmons’ started with the brand that’s named after a slang term for marijuana.
The Cheba Hut in South Denver is Elevated’s 17th restaurant in Colorado. The Denver-based franchisee has five locations in Nevada and anticipates opening three more units this year. It also has a development agreement in Kansas and Kansas City, Missouri.
Elevated Inc. owner David Timmons, left, and partner Kyle Archer own 22 Cheba Hut “Toasted” Subs restaurants in Colorado and Nevada.
“We still have a lot of growth potential in our markets, so we will continue to open restaurants and backfill our locations there as the opportunities present themselves,” said Timmons, the owner and CEO of Elevated.
Scott Jennings founded Cheba Hut in 1998 in Tempe, Arizona, near Arizona State University. Jennings came up with a counter-culture vibe for his restaurants where people can hang out and choose from a creative sandwich menu designed specifically to satisfy the late-night munchies.
Cheba Hut now offers 30 different sandwiches and most locations feature a full bar with local craft beer on tap.
Thanks to multi-unit franchisees like Elevated Inc., Cheba Hut has continued to expand. It opened 22 restaurants from 2021 to 2023.
Related story: Cheba Hut Brings Its Cannabis Theme and Cold Cuts to New Markets
Timmons entered the Cheba Hut system out of college in 2010 when he partnered with a husband-and-wife team to acquire a franchise store in Iowa City, Iowa. Three months later, Timmons sold his share in that business when the partnership fell apart.
Timmons said he moved to Hawaii during a “quarter-life crisis” stage of his life when Jennings asked him if he wanted to buy two of his company-owned locations in Fort Collins, Colorado.
“I always loved Cheba Hut and the opportunity to get back into the brand was something I wasn’t going to pass up,” Timmons said.
Timmons, who founded Elevated Inc. in 2012, added Cheba Hut locations nearly every year with different partners.
In 2019, Timmons acquired all the company stores along with the development rights in Colorado, Nevada and Kansas. He owned a Cheba Hut in Madison, Wisconsin, at one point before selling it to a new franchisee.
Elevated Inc. is a franchisee of SkinnyFATS, another unique restaurant concept that’s geared toward healthy eating.
Archer, Timmons’ business partner, was Timmons’ former banker and joined Elevated in 2020 as the company’s chief operating officer. Archer did not provide the company’s sales revenue but said its stores sell more than 10,000 sandwiches per day and the top-performing Cheba Hut in the Denver market will do close to $3.5 million this year.
The average unit volume for Cheba Hut was $2.03 million for its 58 franchised locations in 2023, according to the company.
Timmons said alcohol sales make up less than 10 percent of revenue but have been a big help in creating the right late-night vibe they seek. Their most popular sandwiches are the White Widow, with grilled chicken breast, bacon, ranch, cheese and veggies; and the Kali Mist, a spicy club with roasted turkey, bacon, chipotle mayo, jalapeño, avocado, pepper jack cheese and vegetables.
“It’s been one hell of a ride, and it’s a long way from being over,” Timmons said. “We see a lot of space to grow.”