Cheba Hut “Toasted” Subs is a marijuana-themed sandwich chain with 60 units.
At Cheba Hut “Toasted” Subs, a marijuana-themed sandwich chain founded 26 years ago, core values dictate every move the corporate team makes.
“When you do that, it makes tough conversations easy and you tend to get the right outcome,” Chief Relationship Officer Seth Larsen said.
The franchise hosts a fundraiser each January called SmokeOut Injustice, in which Cheba Hut contributes to the Last Prisoner Project, a non-profit focused on cannabis criminal justice reform.
Seth Larsen
“It’s very brand aligned. When you have dispensaries that look like Apple stores and people are still doing long-term prison sentences, something’s not quite right,” Larsen said.
The brand is the highest grower in the Top 400 sandwich category, with a 28.3 percent increase in sales last year. That makes Cheba Hut the top grower in the sandwich category. The company added nine stores in 2023, to 60 units, a more than 17 percent year-over-year increase.
Last year, Larsen said cost increases forced the company to be mindful of putting those extra costs on the consumer.
“We want to be the brand that people can come and enjoy multiple times a week,” he said.
Jersey Mike’s, another high-ranking sub franchise at No. 34, saw a sales growth rate of nearly 25 percent, which is fairly consistent with years prior, President Hoyt Jones said. Last year, the brand added 286 net stores, a nearly 12 percent uptick.
Jersey Mikes, ranked No. 34, did $3.34 billion systemwide last year.
“We’ll do the same number again this year, about 300 stores, give or take, primarily fueled from existing franchisees. 85 percent of the growth is existing franchisees,” Jones said.
Still, the 2,600-plus-unit franchise adds 40 to 50 new franchise owners annually, he said.
Jersey Mike’s is known for being active in its communities, even hosting an annual Jersy Mike’s Day of Giving in March, in which 100 percent of sales are donated to a local charity.
“We try to be very active in the communities, trying to, like Peter’s (Cancro, CEO) mantra: Make a difference in people’s lives,” Hoyt said. “We try to do that every day of the year. And we’re rewarded with higher sales every year.”
Hoyt Jones
Unit-level sales growth is happening, in part, due to its ongoing national advertising campaign. In 2022, Danny DeVito, the company’s first celebrity endorser, starred in some Jersey Mike’s commercials.
The top-ranking sandwich franchise on the Top 400 list is No. 7 Subway, with 37,133 global units and estimated system sales of $20.5 billion last year. Sales grew 7.3 percent and units increased by 1.5 percent.
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Potbelly Sandwich Shop is the only brand in the sandwich category to grow in sales, at 12.6% to $560 million, but decline in units, at 1.2%. The brand lost five stores, bringing its 2023 total to 424 nationwide.
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At Which Wich, one of two sandwich franchises to see a decrease in sales last year at 2.3 percent, menu options returned to pre-pandemic numbers. CEO and founder Jeff Sinelli said during the onset of the Covid-19 pandemic, No. 326 Which Wich reduced its number of menu SKUs for cost and supply chain reasons, but in 2023 the company returned to its full menu.
Personalization is where Which Wich shines, Sinelli said. “We allow for total customization,” he said, “and there’s almost millions and millions of combinations that can be created.”
Penn Station East Coast Subs climbed the ranks from No. 216 last year to No. 208. Sales grew about $3 million, a 1.2 percent increase.
About 80% of Penn Station’s sales come from off-premises channels. The 323-unit brand’s Chief Operating Officer Craig Dunaway said the category has shifted from telling customers how to order, to customers telling brands how they want to order.
“The initiatives of being where the customer is … I think that’s helped drive transactions,” said Dunaway.