Cheba Hut Sub Franchise Set for Major Expansion Within Home State of Arizona

Cheba Hut is focusing on expanding within its home state of Arizona, and this has much to do with its long-term, loyal customer base.

Cheba Hut opened its first sub sandwich restaurant in Arizona in 1998, and 20 years later the brand is still going strong. The brand’s longtime presence in the state means that many a Cheba Hut customer who started enjoying the brand when they were younger still craves it as an adult, even if they’ve moved outside of cities and into more suburban areas.

“It’s cool to see the evolution of our customer base down there,” Cheba Hut COO Marc Torres said. “A lot of people who were original Cheba Hut fans are older and they have families. It’s really cool to see our customers evolve down there and really what it’s done is open up a much broader customer base for us in Arizona.”

The brand attributes much of its success in Arizona over the past 20 years to customer loyalty.

“We do really well with high schoolers and college kids, and as they grow they stay loyal to Cheba Hut,” Torres said. “We’ve done a good job in college markets, and then also in following customers into areas in which they live and work.”

A good example of this is the brand’s new location in the Phoenix suburb of Ahwatukee.

“That’s not our typical location, but because the brand is so strong in Arizona and Phoenix it’s doing well,” Torres said. “We’re following our customers, and there’s a lot of demand for Cheba Hut where people are living and working.”

This demand is especially strong in towns such as Chandler and Gilbert, which are located in Phoenix’s East Valley, as well as Peoria and Goodyear, which are located in Phoenix’s West Valley.

“We receive more store opening requests out of Arizona than any other market and again, I think it’s because our customers have moved out of more traditional college areas and are now living in those more suburban markets, so we just get a tremendous amount of location requests for outlying cities in the Phoenix area,” Torres said.

In addition to just good, old-fashioned customer loyalty to the brand, customers also just love that Cheba Hut is an Arizona-born creation.

“I do think it is important to note that over the past three to five years, there has been a lot of restaurant development in Arizona, and that’s brought increased competition and people from outside the area and it’s made our brand even stronger in the Arizona market,” Torres said. “People know that we are from Arizona and that it’s where Cheba Hut started, so I think it’s actually made our fans more loyal and passionate because all of these outsiders come in to do business and customers know that Cheba Hut is original. I think that definitely helps solidify our brand in the Arizona market and allows for more development, which we’ll be focused on in the next few years.”

At this time, Cheba Hut is not looking for new franchisees in Arizona, as it only plans to open corporate-owned stores, as well as new stores with its veteran Arizona franchisee, Dorian Lenz, who became the brand’s first franchisee in 2001 and now owns five Cheba Hut franchises in the Phoenix area and one in Tucson.

The corporate-owned stores are specifically planned for northern Phoenix and Scottsdale, according to Torres.

“We’re looking to begin developing out that territory towards the end of next year,” he said. “We definitely see by the end of 2020 having a total of 10 locations in Arizona, and then within the next five years having 15 locations in Arizona. Those 15 locations would be a mix of Dorian-owned restaurants along with corporate store development.”

Between the opening of new corporate-owned stores and new franchise locations over the next four to five years, Torres estimates the Arizona expansion will create approximately 300 new jobs. A Cheba Hut location typically has 30 employees, and the brand currently has about 175 employees in Arizona alone.

Torres, who is currently Denver-based and lived in Arizona for four years and started his professional career there, is looking forward to spending more time in the state as a result of this expansion.

Arizona, he said, is a state rife with opportunity for the Cheba Hut brand, and not just because it started there. Torres pointed out that Arizona is a popular state for major sporting events, including golf tournaments, and that Phoenix “is a stop on every band’s tour,” which goes hand-in-hand with the brand wanting to create an experience for customers. Customers can make a Cheba Hut visit part of their overall plans or just make Cheba Hut their main destination.

“People are having a good time and you want to go someplace cool, even if it’s just for a quick lunch,” Torres said. “You can take your friends there and make it a destination, and that’s what we pride ourselves on, it’s being part of an experience or even just being an experience in and of ourselves.”

Cheba Hut is looking for franchisees to open new restaurants outside of Arizona. The startup costs for a Cheba Hut franchise range from $336,000 to $678,000. The franchise fee is $40,000. To learn more about franchising with Cheba Hut, visit https://franchise.chebahut.com/.