Cheba Hut, the cannabis-themed sandwich brand, opened its 50th location recently in Washington, marking the company’s continued growth outside its southwest origins.
Founded in 1998, Cheba Hut originated in Arizona, and in the years that followed, the brand expanded there, in Colorado and New Mexico. Cheba Hut has moved beyond that region in the last few years, though, with shops now open in 15 states.
In June, Cheba Hut franchisee Doug Engerman opened the latest unit in Bellingham, Washington, after discovering the brand in Colorado. While 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 product, and that’s what got the hook into me,” Engerman said. “My kids went to college in the Denver area where they had Cheba Huts and they’d always bring it to our hotel. I flipped over the quality of the food.”
Engerman said he was able to experience more of Cheba Hut when he was doing consulting work in Fort Collins. After getting a good taste of the concept, Engerman reached out and began communication with Cheba Hut headquarters.
“They’ve been very conservative about building the brand in a certain way, to not get overcommitted and overextended in offering franchise opportunities,” Engerman said. “That’s really good news, that they protect the brand vigorously. As a franchisee, that’s very attractive.”
Engerman’s Cheba Hut has been operating well so far and he has another under construction in Seattle that’s expected to open before the end of the year. Cheba Hut Chief Relationship Officer Seth Larsen said growth in the brand will continue in the 15 states they’re in before branching out more.
Cheba Hut Chief Relationship Officer Seth Larsen
“In the next couple of years, we’re going to focus on backfilling the states we’re in,” Larsen said. “We’d like to continue growth in Texas and Florida. We don’t have any interest in going northeast for the next two years.”
Those new units, like others built before them, will feature the brand’s marijuana-themed décor and food item names. “We do make the distinction, because there’s no cannabis products in the food offerings,” Engerman said. “It’s a cheeky concept where we embrace the cannabis culture. There’s a lot of fun stuff visually in the shops, as each one features a custom mural by a local artist.”
“It’s not what completely drives us,” Larsen said. “I’d say anyone can feel comfortable in a Cheba Hut. You don’t get to our average unit volume being exclusive to stoners. It’s really more about giving the ability to show up as their authentic self. We’re an escape people can have on their lunchbreak.”
Cheba Hut’s AUV is $1.48 million, with its highest-performing location doing $2.18 million in sales, as noted on the company’s website. The cost to open a location ranges from $575,900 to $939,700.