All of the Flavor, None of the Judgement: Toasted Sub Concept Cheba Hut Still Serving Good Vibes After 21 Years

Phoenix-founded sandwich concept Cheba Hut has been keeping it real since 1998 when founder Scott Jennings decided to blend delicious fare with good old anti-establishment vibes. The result? A beloved seven-state, 24-unit “toasted” sub chain that has built its unique cannabis theme into a deep commitment to hospitality, excellent customer service and majorly munch-able sandwiches and sides. Oh, and conversation-starting sandwich names (see “The White Widow” or “Magic Mushroom” subs, or the “Bowl o’ Balls” starter).

Notably, Cheba Hut found success long before the first instance of state-level legalization of marijuana, and in traditionally conservative Arizona to boot. This might surprise some, but not Seth Larsen, Cheba Hut’s Chief Relationship Officer.

“Our theme is secondary,” Larsen explained. “The biggest thing we’re focused on is hospitality and great food. We’re food- and hospitality-driven and that’s what makes rabid fans that keep coming back.”

Core values

One of Cheba Hut’s longest-tenured franchisees, Dorian “DJ” Lenz of Phoenix, Arizona, agreed with Larsen.

“We take three things really seriously at Cheba Hut,” Lenz said. “That’s culture, food and customer service. So we might seem like pot-smoking hippie goofballs, but we don’t mess around with the quality of the product or with our customer service. If our only claim to fame was that we had a weed gimmick, we would have closed a long time ago.”

Both Larsen and Lenz emphasized that Cheba Hut’s focus on a welcoming, laid-back atmosphere and exceptionally tasty sandwiches—plus, at several locations, new kick-back-and-relax, full-service bars coupled with an impressive signature cocktail list—make Cheba Hut a concept open to all.

“Being about food and hospitality—our core customer base, and society in general, embraces that,” Larsen said. “We’re an inclusive brand, and we want everyone to feel comfortable—so if you’re a blue collar worker, a soccer mom, a stoner, old, young, it doesn’t matter. We want everyone who comes in to feel comfortable.”

Lenz said that this welcoming approach—central to Cheba Hut from day one—comes from a commitment to zero judgment.

“Our culture could be summed up as this: no judgement,” Lenz explained. “So if you’re an employee, and you have long hair and tons of tattoos, but you’re a hard worker? No judgment. And that spreads out, to our customers, to our vendors, to the people we do business with. So if you’re a police officer? No judgment. If you’re a missionary who wants a delicious toasted sub? No judgement.”

Marketing approach

Cheba Hut’s people-focused approach to doing business naturally extends to their marketing as well. The brand doesn’t invest in traditional campaigns like TV spots or radio, nor the more-recent social media marketing. Instead, Cheba Hut relies on word of mouth and organic enjoyment.

“We’ve always been a word-of-mouth brand,” Larsen said. “That third-party endorsement from a friend or a coworker who loves Cheba Hut is more significant than radio, print or a commercial. Let’s say you’re on the fence, but a coworker says, ‘Hey, they’re quirky guys, but it’s priced fairly, the food is great and there’s a bar.’ Now you’re interested.”

Lenz noted that Cheba Hut is also a concept that becomes a kind of community staple.

“I’m 40, and I have zero problem taking my kids to a weed-themed sandwich shop, and that’s true of most of our customers. In our store, I see teens, college kids, professional business people and parents and kids…and the parents visiting now used to come as teens!” Lenz said. “Everywhere you go, people see our merch and respond. Our employees, too…I don’t know a lot of employees who would rep a McDonald’s hat going out, but our employees do! We're about good food, great culture. It shows.”

Larsen added: “That’s all we want: just give us a chance and let us provide that great experience to you. That’s how we built this brand and our high AUV [Average Unit Volume]. It’s by making sure every customer interaction is important and positive.”

Competitive edge

Ultimately, then, Cheba Hut’s point of differentiation in a competitive sandwich market isn’t its cannabis theme: it’s an unrivaled commitment to service, quality and good vibes only. That means Cheba Hut can perform well in diverse markets without ever selling out.

“We’re an edgy brand, that’s not gonna change,” Larsen said. “Scott was a cage-rattling MOFO when he had one store, and still will be when we hit 25 next month.”

“We’re not the average sandwich player out there, nor do we want to be,” Larsen explained. “And the biggest thing is, when we were founded, we were pigeon-holed into being a college brand. And we love college markets, but we can operate in suburbia, downtown, in states that are more traditionally conservative—we love those markets. We’re food- and hospitality-focused and those are core values across the United States.”

To Larsen’s point, Cheba Hut has focused on balanced growth, adding three to five stores every year, and utilizing a business model that only signs on franchisees for a minimum of three locations. That focus on brand commitment and scalable growth—plus an inimitable culture—earned Cheba Hut an impressively high AUV in 2018: over $1 million, a figure that’s exceedingly rare for a sandwich concept.

“For 2019, we’re focused on that healthy growth and opening stores at or above that average unit volume,” Larsen said.

Looks like “Green Wave” or not, Cheba Hut will keep blazing ahead.