Franchise Deep Dive: Cheba Hut's Franchise Costs, Fees, Profit and Data

The marijuana-themed sub shop is spreading like wildfire across the US.

1:13PM • 04/23/23

LAST UPDATED: March 10, 2023
FRANCHISE WEBSITE: https://franchise.chebahut.com/
NUMBER OF LOCATIONS: 40+
REPORTED COST TO GET IN: $575,900–$939,700
REPORTED ROI (Item 19): Not reported

Scott Jennings worked a series of odd jobs while in college and noticed a gap in the industry for late-night food deliveries. A foodie himself, Jennings figured that a lot of college students liked to get high after long days of class and decided to create a cannabis-themed sub shop. In 1998, Cheba Hut* “toasted” Subs was founded.

Jennings wanted to create a place where everyone felt welcome, embraced counter-culture and was better than anything on the fast-casual market.

How Many Cheba Hut Locations Are There?

There are over 40 Cheba Hut locations all over the US. Many of the locations are in Arizona, where the flagship store is located, and Colorado.

What Is the Cheba Hut Business Model?

Each Cheba Hut is unique to its location. Franchisees work with local artists to paint a mural that reflects them and their community. The target footprint for a location is 2,400–2,600 square feet, which thrives both as a stand-alone or in a local strip mall. Franchisees can also add a patio to their location (minimum of 400 square feet) if space allows.

How Much Can Cheba Hut Franchise Owners Make?

According to the 2022 Franchise Disclosure Document (FDD) from Franchimp, in 2019, franchisees earned $790,756.79–$2,306,507.08. In the same year, affiliate locations earned $1,025,955.32–$2,363,108.95. In 2020, franchisees earned $743,392.44–$1,949,826.07. The highest-performing location earned $2,188,577. There is no report of what franchisees or affiliate locations earned for the years 2021 and 2022.

How Much Does It Cost to Open a Cheba Hut?

The initial investment to open a Cheba Hut is $575,900–$939,700. Currently, Cheba Hut is only accepting applications from candidates willing to commit to a three-store, three-year package. If candidates are willing to do this, they will receive a significantly reduced franchisee fee. A breakdown of the fees involved in starting a Cheba Hut are listed below.

Initial Franchise Fee: $28.3K–$40K
Real Estate and Construction Assistance Fee: $15K
Leasehold Improvements: $250K–$500K
Furniture, Fixtures, Décor and Equipment: $140K–$170K
POS System and Computers: $8.2K–$10.2K
Pre-Open Tech Fee: $1.2K–$1.5K
Opening Team Expenses: $0–$6K
Training Expenses: $15K–$18K
Architect and Engineering Fees: $15K–$22K
Site Survey Fee: $2K–$3.5K
Signs: $6.5K–$20K
Restaurant Lease (Three Months): $16.5K–$30K
Miscellaneous: $14K–$20K
First Party / Grand Opening: $3.5K–$3.5K
Additional Funds–(Three Months): $45K–$60K
Initial Inventory: $6K–$10K
Attorney(s) and Legal: $5K–$10K

TOTAL: $575.9K–$939.7K

Who Is the Leadership of Cheba Hut?

What Helpful Sources Can I See to Learn More About Cheba Hut?

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