Franchise - 2026 FDD
Cheba Hut franchise
Cheba Hut franchisees operate quick-service sandwich restaurants featuring toasted submarine sandwiches, original sauces, salads, soups, chips, brownies, and other high-quality food and beverage items in a fun, casual and distinctive atmosphere. An experienced hospitality professional with at least three years of restaurant and bar management experience must manage the day-to-day operation. Area developers acquire the right to develop multiple Cheba Hut Businesses in a designated area and must open a minimum of three locations.
Independent Franchise.com profile
Cheba Hut 2026 Franchise Disclosure Document, issued April 6, 2026. Existing outlets and disclosed development do not establish current market availability.
Cheba Hut franchisees operate quick-service sandwich restaurants featuring toasted submarine sandwiches, original sauces, salads, soups, chips, brownies, and other high-quality food and beverage items in a fun, casual and distinctive atmosphere.
Getting started
Standard Location
Item 7 stated investment$631,150-$2,086,100
Initial franchise fee$50,000
Typical time to open9-15 months
Recommended prototype2,000 to 2,600 square feet, typically in free-standing outlets, shopping malls, and strip malls
Ownership & operation
What the local business requires
Day-to-day operatorOwner or a trained Designated Manager
On-premises during peak hoursNot specified; owner or a manager must manage day to day
Key required roleExperienced hospitality professional Designated Manager
Owner performs the service personallyNot required; owner or a trained manager must manage the business
System size
U.S. - year-end 2025
total units83
Franchised Businesses (latest disclosed FY)80
Company-owned Businesses (latest disclosed FY)3
Franchised-unit change across the disclosed window+22 (+37.9%)
System Size and Recent Changes
How large is the Cheba Hut system, and how has it changed?
Cheba Hut ended the 2025 fiscal year with 80 franchised outlets and 3 company-owned outlets, for a total of 83 system-wide outlets. The number of franchised outlets has increased over the last three fiscal years, from 58 in 2023 to 80 in 2025.
2023
58
franchised outlets
2024
73
franchised outlets
2025
80
franchised outlets
Card: net change note: The total number of franchised Cheba Hut outlets increased by 22, or 37.9%, from 2023 to 2025.
Card: openings/reductions note (latest disclosed FY): In 2025, 7 franchised Cheba Hut outlets were added. No franchised outlets ceased operations, were reacquired by the franchisor, were terminated, were not renewed, or closed for other reasons.
See development context, year-end system size and 2025 franchised outlet movement
Development context: As of the end of 2025, there were 15 franchise agreements signed for outlets not yet open, with 15 new franchised outlets projected to open in the next fiscal year. These figures do not represent the current availability of franchise territories.
Year-end system size
| Year | Franchised outlets | Company-owned outlets | Total outlets |
|---|---|---|---|
| 2023 | 58 | 2 | 60 |
| 2024 | 73 | 2 | 75 |
| 2025 | 80 | 3 | 83 |
2025 franchised outlet movement
| Measure | Count |
|---|---|
| Franchised outlets at start of 2025 | 73 |
| Franchised outlets at end of 2025 | 80 |
All profile counts use the FDD's outlet terminology. Existing outlets, signed development and projections do not establish current territory availability.
Growing system
Compare this system with others
Look at more franchise opportunities and how their size, fees, and investment compare.
Startup costs
How much does a Cheba Hut franchise cost?
The total estimated initial investment for a Cheba Hut franchise ranges from $631,150 to $2,086,100. Key drivers include leasehold improvements, estimated between $275,000 and $1,100,000, and furniture, fixtures, décor, and equipment, which range from $150,000 to $325,000. The standard Initial Franchise Fee is $50,000.
Where the money goes
$275,000-$1,100,000Leasehold Improvements
$150,000-$325,000Furniture, Fixtures, Décor and Equipment
$50,000-$100,000 for 3 monthsAdditional Funds - 3 months
$3,500-$10,000, with a minimum spend of $2,500first party grand opening celebration
Real-estate intensity callout: Restaurants typically range from 2,000 to 2,600 square feet. The costs for building and construction vary based on the condition and size of the premises, as well as local construction expenses. The franchisor provides an approved real estate and construction management supplier to assist with site identification and lease negotiation.
Launch Planning
- Typical opening timeline
- The typical length of time between signing the Franchise Agreement and opening a Cheba Hut Business is 9 to 15 months. This timeline can be affected by factors such as location acquisition, financing, compliance with local ordinances, permit obtainment, equipment delivery, and construction.
- Contractual opening deadline
- Franchisees must open their Cheba Hut Business within 18 months from signing the Franchise Agreement, unless extensions are requested and paid for. Failure to open within this timeframe may result in termination of the Franchise Agreement and retention of the non-refundable Initial Franchise Fee.
- Site and lease milestones
- Franchisees must obtain site approval within 120 days of signing the Franchise Agreement and purchase or lease the site within 180 days. A protected territory, typically a two-mile radius, is granted unless the restaurant is in a metropolitan area or a non-traditional location. Non-traditional locations and metropolitan areas do not receive an exclusive territory.
- Additional Funds
- Additional funds of $50,000-$100,000 are estimated to cover expenses for the initial three-month start-up phase. These figures exclude standard pre-opening expenses, Royalties, advertising fees, and debt service.
- Grand-opening marketing
- Franchisees must host a one-day grand opening celebration, a 'First Party', within 60 days of opening and spend a minimum of $2,500 on it. The franchisor provides a First Party package with advertising and promotional materials. The franchisor will also match up to $3,000 for approved grand opening marketing spent during the 180 days prior to opening.
- Fee commencement
- The Royalty fee (5% of Net Sales) is due on Wednesday of each week, based on the previous week's sales. The Brand Fund Contribution (2% of weekly Net Sales) is due at the same time as the Royalty. The Technology Fee (currently $1,000 per month) is due monthly upon opening. Additional Technology Fee (Ghost Kitchen) is also $1,000 per month and due monthly upon opening.
See the full Item 7 cost table
| Type of expenditure | Low | High | When due |
|---|---|---|---|
| Initial Franchise Fee | $50,000 | $50,000 | See Item 5 of this Franchise Disclosure Document |
| Leasehold Improvements | $275,000 | $1,100,000 | Before Opening |
| Furniture, Fixtures, Décor and Equipment | $150,000 | $325,000 | As Incurred |
| Point-of-Sale Systems and Other Equipment | $0 | $15,000 | Before Opening |
| Pre-Opening Technology Fee | $900 | $2,400 | Before Opening |
| Opening Team Expenses | $0 | $20,000 | As Incurred |
| Training Expenses | $15,000 | $25,000 | As Incurred |
| Architectural and Engineering Fees | $17,500 | $50,000 | Before Opening |
| Non-preferred Architect Fee | $0 | $4,200 | As Incurred |
| Site Survey Fee | $1,750 | $3,500 | At Lease Execution |
| Signs | $10,000 | $50,000 | Before Opening |
| 3-Months' Lease Payments | $20,000 | $50,000 | As Incurred |
| Miscellaneous | $15,000 | $30,000 | Before Opening or otherwise as arranged |
| First Party | $3,500 | $10,000 | Before Opening |
| Additional Funds - 3 Months | $50,000 | $100,000 | As Incurred |
| Initial Inventory- Food & Bar | $15,000 | $30,000 | Before Opening |
| Professional Fees | $5,000 | $15,000 | Before Opening |
| Liquor License Costs | $2,500 | $200,000 | Before Opening |
| Extension Fee | $0 | $6,000 | As incurred before opening |
| Item 7 table — stated total | $631,150 | $2,086,100 |
These estimated initial expenses are the franchisor's best estimate and do not include any construction allowances from landlords. All expenditures paid to the franchisor or its affiliates are non-refundable. For liquor licenses in 'quota' states, the cost can vary significantly and may exceed $1,000,000 in certain markets, an amount not fully accounted for in the high estimate.
Find your fit
See which franchises match you
A short quiz compares your budget, timeline, and goals with franchise opportunities. It takes about two minutes.
Ongoing fees
What ongoing fees does Cheba Hut charge?
Cheba Hut franchisees pay a weekly royalty fee and contribute to a Brand Fund, both calculated as a percentage of Net Sales. There is also a required monthly local advertising spend. Additionally, franchisees pay a monthly technology fee and an online ordering service fee.
Royalty5% of Net Sales weekly
Total sales-based fees7% of Net Sales (Royalty 5% + Brand Fund Contribution 2%)
Fixed technology and licensing fee$1,000 per month
Fixed monthly recurring total$475-$1,905 (Technology Fee up to $1,000/month + either Online Ordering Service Fee (Main Channel Platform Fee) $85/month or Online Ordering Service Fee (Catering Channel Platform Fee) $5/month + Mystery Shopper Fee $120-$220/month + Computer System Subscription Fee $350-$600/month)
| Economic category | Amount / basis | How it works |
|---|---|---|
| Audit fee | Cost of audit and inspection, plus any understated amounts and related expenses, if Net Sales are understated by more than 1.5% | This fee is payable if an audit reveals an understatement of Net Sales by more than 1.5% in any week, month, or year, or if required reports are not submitted. |
| Brand fund | 2% of weekly Net Sales, may increase up to 4.20% | This contribution is used for a system-wide Brand Fund to promote and build the Cheba Hut brand, and may increase up to 4.20% upon written notice. |
| Local advertising minimum | 1% of Net Sales monthly | This is a monthly local advertising expenditure requirement; if not met on a rolling six-month basis, the difference must be paid to the Brand Fund. |
See secondary recurring and conditional charges
Marketing and technology
- Online Ordering Service Fee (Main Channel)
- A platform fee of $85 per month plus $0.02 per order is paid to an approved supplier for online ordering services.
- Additional Technology Fee (Ghost Kitchen)
- Franchisees operating an approved Ghost Kitchen pay an additional technology fee of $1,000 per month.
Training and operating obligations
- Additional Training or Assistance Fees
- Fees for additional persons in initial training are $3,500 per person plus expenses, and on-site training is $250 per day plus expenses.
- Transfer Fee
- A fee of $10,000 is payable for the transfer of a Cheba Hut Business, ownership of a legal entity, or the Franchise Agreement, with a $1,000 non-refundable deposit.
Ownership, staffing and support
How is a Cheba Hut business staffed and supported?
Cheba Hut recommends that the franchisee directly operate the business, but allows for a qualified Designated Manager to oversee daily operations. Initial training is provided for up to three people, covering all aspects of restaurant operations and management. Ongoing support includes operational advice, marketing guidance, and access to approved suppliers.
Ownership structure card
- Cheba Hut recommends but does not require direct owner operation.
- The day-to-day operation must be managed by an experienced hospitality professional with at least three years of restaurant and bar management experience, referred to as the "Designated Manager." If the franchisee is an entity, one owner must be designated as the "Managing Operator" responsible for communication and daily operations.
Local operating team card
- Beyond the owner/manager, all management staff members must successfully complete the franchisor's training program.
- The opening team assists with implementing the Cheba Hut System and training staff, providing a minimum of 12 days for the first business and 8 days for additional businesses.
Training and support card
- Initial training is provided at no cost for up to three people (the Managing Operator, a Designated Manager, and an additional person if desired) and covers orientation, kitchen operations, front-of-restaurant service, management, and financial management.
- This comprehensive program combines classroom and on-the-job training, lasting a total of 192 hours.
- Ongoing support includes operational advice, marketing guidance, and refresher training, which may require additional fees.
Ownership signal callout: This franchise is suitable for owners who wish to be involved, or for those who prefer to hire an experienced, trained manager to oversee the daily operations. A strong emphasis is placed on comprehensive training for all management staff.
How customers find the business
How does a Cheba Hut business attract and retain customers?
Cheba Hut franchisees operate quick-service sandwich restaurants featuring toasted submarine sandwiches and other food and beverage items in a distinctive atmosphere. The primary market for the goods and services is the general public. While the franchisor provides system-wide marketing and brand support, the franchisee is responsible for local advertising efforts and cultivating a loyal customer base.
What the system provides
- A system-wide Brand Fund for marketing, developing, and promoting the System, Marks, and Cheba Hut Franchises.
- Initial training on Restaurant operations, technical skills, management, and financial management.
- Materials and consultation for grand opening marketing.
- Specifications for furniture, fixtures, equipment, signage, inventory, and supplies, including a list of approved suppliers.
- A System Website for Cheba Hut Businesses, with final approval rights over all information.
- Advice and guidance on advertising and marketing during operation.
What the local operator executes
- Must spend an average of 1% of Net Sales on local advertising each month.
- Required to host a grand opening celebration ("First Party") within 60 days of opening, spending a minimum of $2,500.
- Must participate in at least two system-wide celebrations per year at their sole cost and expense.
- Not permitted to use unauthorized advertising materials or create their own gift cards/certificates or coupons without prior written approval.
- May provide catering and delivery services within or outside their Territory according to policies and procedures.
- Expected to operate the Cheba Hut Business at an approved location, which is typically a two-mile radius protected Territory.
The operating tension: Marketing efforts by the franchisor and franchisee aim to attract customers, but the ongoing success of each Cheba Hut Business ultimately depends on the franchisee's ability to execute operations, deliver quality service, and manage staffing and capacity effectively.
Brand and agreement basics
Key Cheba Hut franchise agreement terms
Brand and ownership
- U.S. franchisor
- Cheba Hut Franchising, Inc.
- Headquarters
- Fort Collins, Colorado
- U.S. franchising history
- Since April 2002
- System mix (latest disclosed FY)
- 80 franchised / 3 company-owned / 83 total
Agreement Terms
- Initial term
- 10 years
- Successor terms
- One successor term of 10 years is available if the franchisee is in good standing and meets other requirements. A new franchise agreement with potentially different terms, including higher royalty and advertising contributions, must be signed.
- Territory
- A protected territory, typically a two-mile radius around the restaurant, is granted unless the restaurant is in a metropolitan area or a non-traditional location. The franchisor reserves the right to operate or license others to operate Cheba Hut Businesses outside the territory, and to use alternate channels of distribution within or outside the territory.
- Multi-unit development
- Area development agreements are offered to select qualified persons for developing multiple Cheba Hut Businesses in a designated territory.
Note: The financial performance representations include historical Net Sales information for a reporting group of franchised and affiliate-owned businesses, as well as selected historical systemwide sales and operating data. The Net Sales data is presented for the full reporting group, franchised locations, and affiliate locations, and is also broken down into top and bottom performing quartiles. Systemwide data covers total Net Sales, Net Sales for stores open at the start of the year, Net Sales for new stores, and related growth percentages, along with customer interaction data and average check amounts.
More options
Keep exploring
If this brand is not the one, see more franchise opportunities that may fit better.
Frequently asked questions
Cheba Hut franchise FAQs
Does the owner have to personally perform the core service?
The provided information does not state whether the owner must personally perform the core service. It mentions that franchisees operate quick-service sandwich restaurants featuring toasted submarine sandwiches and other food items.
Is the territory exclusive?
A Cheba Hut franchisee typically receives a protected territory, usually a two-mile radius around the restaurant, unless the restaurant is in a metropolitan area or a non-traditional location. In metropolitan or non-traditional locations, no exclusive territory is granted, and the franchisee may face competition from other Cheba Hut businesses or other channels of distribution controlled by the franchisor. The franchisor reserves the right to operate or license others to operate Cheba Hut Businesses outside the territory and to use the Marks and System through alternate channels of distribution within or outside the territory.
Can a franchisee develop more than one location?
Yes, Cheba Hut offers Area Developers the opportunity to acquire the right to develop multiple Cheba Hut Businesses in a designated development area. Area Developers must open a minimum of three Cheba Hut Businesses and sign an Area Development Agreement.
Can a prospective owner speak with current and former franchisees?
Yes, the names, addresses, and telephone numbers of current franchisees are provided. Contact information for former franchisees who ceased operations or have not communicated recently is also available, though some may have signed confidentiality provisions restricting their ability to speak openly.
What is the total investment required to open a Cheba Hut franchise?
The total investment necessary to begin operation of a Cheba Hut franchised business ranges between $631,150 and $2,086,100. This includes between $51,320 and $86,800 that must be paid to the franchisor or its affiliates.
What kind of business is a Cheba Hut franchise?
Cheba Hut franchisees operate quick-service sandwich restaurants that feature toasted submarine sandwiches, original sauces, salads, soups, chips, brownies, and other high-quality food and beverage items. These are offered in a fun, casual, and distinctive atmosphere.
Similar opportunities
Similar opportunities to Cheba Hut
Compare other franchises with Cheba Hut: Investment, Fees, Franchising history and system size at a glance.
Not able to find similar franchises.
Source and methodology
Source and methodology
Cheba Hut Franchising, Inc. 2026 Franchise Disclosure Document, issued April 6, 2026.
This profile is based on structured information from the franchisor's FDD, with automated tools assisting in the extraction and drafting process, and reviewed by a human editor.
Take the next step
Where are you in your decision?
Cheba Hut is not currently accepting inquiries through Franchise.com. Choose the path that matches how far along you are.
I like this type of business
Explore similar franchises
Browse these franchises on Franchise.com and compare investment, fees and system size side by side.
See similar franchisesI am not sure what fits me
Find your franchise match
Answer a few questions about your budget, goals and timeline, and see the franchises that best fit what you are looking for.
Take the match quizI am not sure I can afford it
Check your buying power
Use the Net Worth Calculator to see whether you have the resources to start a franchise at this investment level.
Calculate your net worth