Cheba Hut Sandwich Franchise Headed for Big-Time Expansion in Southern California

The marijuana-themed sandwich restaurant franchise already has two locations open in San Diego, and the brand’s success there has seen a California public wanting more. Cheba Hut specifically has plans to open new locations in San Diego, Los Angeles County and Orange County. The lifestyle in the region is the perfect fit for the brand.

“Southern California just goes hand-in-hand with Cheba Hut,” Cheba Hut’s Chief Relationship Officer Seth Larsen said. “Cheba Hut was founded on a semi-beach theme and there’s no better beaches than in Southern California.”

Southern California also has the perfect demographic of people for Cheba Hut. Cheba Hut owns the 18 to 40 age category, and based on the demographics of Southern California and the high volume of people living there, there is just unlimited potential, Larsen said.

“We love California because there’s a lot of passionate fans out there,” he said. “You can tell by the amount of Yelp and Google reviews, which are by far the highest in our system.”

The disposable income in Southern California is also a huge reason for Cheba Hut’s expansion in the region.

“Californians are savvy consumers,” Larsen said. “We offer full-service experience at fast-casual prices. We pride ourselves on hospitality and food and you can get a great meal with alcohol at half the price of full-service competitors.”

Cheba Hut is prepared to help franchisees compete with the local competition, as well as the high rent costs. The brand already has experience with these issues thanks to its presence in other competitive markets that also have high rents. To help ease real estate costs, Cheba Hut offers franchisees incentives to help with operations.

“We understand that everyone wants to open up businesses in Southern California due to the demographics, weather, beach vibe and mix of tourists and locals,” Larsen said. “We understand real estate costs are high and rising in Southern California. That is why we have flexible floor plans and pride ourselves on ease of operations. We can do 1,800 square foot spaces as well as 2,400-plus square foot locations. We also have no fryers, flat tops or other expensive equipment, which in turn keeps the investment lower than other concepts and the sales to investment ratio at nearly 3:1.”

Larsen also pointed to the beer culture in Southern California. Add the region’s art and music scenes, and the potential for success is huge.

“The opportunity to partner with all the great breweries out there is something we do across all markets,” Larsen said. “It not only keeps our average ticket high but it’s also good to retain high-level employees. They don’t just feel like they’re working in a sandwich shop.”

The first Cheba Hut San Diego location opened in 2010 and is located close to San Diego State University. The second San Diego location opened in 2013 on Pacific Beach, and Larsen said “it’s been good all the way through” for both locations.

The San Diego State University location was recently granted a liquor license, which should go live in the fall. (Per San Diego city law, which prohibits alcohol on beaches, the Pacific Beach location does not offer alcohol.)

“Even with those two stores we understand there’s still unlimited potential to add locations there,” Larsen said.

When it comes to potential franchisees, Larsen emphasized the desire for positive people who are enthusiastic about the brand.

“We have a strict no asshole-policy at Cheba Hut,” he said.

Business acumen is also crucial. Cheba Hut is especially interested in franchisees that have multi-unit aspirations and experience building high-level teams.

“We’re businessmen at the end of the day,” Larsen said. “Being numbers-driven and being driven to provide excellent hospitality are some of the things we look for. Yes, we’re a fun brand and we like to do things a little bit differently but we’re food-driven and we’re service-driven and we like to make money.”

With a company culture that jives well with the Southern California lifestyle, Cheba Hut is excited to see further growth and success in the area.

“We just go hand-in-hand, and those cities have great music and art and beer culture,” Larsen said. “It plays well.”