Risk Score
Pending analysis
Investment Range
$631,150 - $2,086,100
Franchise Fee
$50,000
Total US Locations
77
Business Summary
Cheba Hut operates quick-service sandwich restaurants that specialize in toasted submarine sandwiches, original sauces, salads, soups, chips, brownies, and other high-quality food and beverage items. These restaurants provide a distinctive and fun, casual atmosphere for customers.
Corporate History
Cheba Hut Franchising, Inc. was incorporated in Arizona on March 2, 2001, and operates under the names Cheba Hut Franchising, Inc. and Cheba Hut. The company began offering Cheba Hut franchises in April 2002. Cheba Hut Franchising, Inc. has not conducted business under any other name or in any other line of business, nor has it offered franchises in any other line of business. The company itself does not operate the type of business it franchises, though its affiliates do.
Financial Overview
Investment Range
$631,150 - $2,086,100
Franchise Fee (Low)
$50,000
Franchise Fee (High)
$130,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$150,000
Equipment Costs (High)
$340,000
Working Capital
$75,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial condition of Cheba Hut Franchising, Inc., as reflected in its financial statements, raises questions about its financial ability to provide franchisees with adequate services and support.
Financing Details
Cheba Hut Franchising, Inc. does not offer any direct or indirect financing to its franchisees. Additionally, it does not guarantee any notes, leases, or other obligations of its franchisees.
Performance Metrics
Total US Locations
77
Franchised Units
75
Corporate Units
2
Avg Square Footage
2,300
Franchising Since
2002
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Cheba Hut Franchising, Inc. has no litigation that is required to be disclosed in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
Cheba Hut Franchising, Inc. has no bankruptcy history that is required to be disclosed in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew, Cheba Hut franchisees must provide timely written notice, be in good standing without any defaults, sign the then-current franchise agreement (which may have different terms like higher fees), sign a general release of claims, pay a renewal fee equal to 50% of the then-current initial franchise fee, remodel their restaurant to meet current brand standards, ensure their lease allows continued possession of the premises, and take any other reasonable steps Cheba Hut Franchising, Inc. may require.
Training & Support Program
Franchisor Assistance
Cheba Hut Franchising, Inc. provides comprehensive assistance to its franchisees. Before opening, Cheba Hut offers an initial training program for up to three people at no extra cost, loans a copy of its Brand Standards Manual, and provides an approved real estate and construction management supplier to help with site identification, lease negotiation, and construction oversight. Cheba Hut also provides design specifications, grand opening marketing consultation, and lists of approved suppliers for equipment and supplies. After opening, Cheba Hut provides mandatory specifications, advice on operations and marketing, optional refresher training courses (for additional fees), and allows continued use of its confidential materials and trademarks. Cheba Hut also updates lists of approved suppliers and may negotiate supplier agreements for franchisees' benefit.
Initial Training Hours
192
Training Location
Fort Collins, Colorado
Ongoing Support
After opening, Cheba Hut Franchising, Inc. provides ongoing assistance to its franchisees. This includes informing franchisees of mandatory operational standards and procedures, offering advice on Cheba Hut business operations based on reports or inspections, and providing guidance on advertising and marketing. Cheba Hut may also offer refresher training courses and additional training or assistance, which may incur additional fees. Franchisees are allowed to continue using confidential materials, including the Brand Standards Manual and trademarks, and receive updates on approved suppliers. Cheba Hut may also conduct periodic visits to restaurants and hold national or regional conferences for franchisees.
Franchise Requirements
Ideal Candidate Profile
Cheba Hut Franchising, Inc. seeks franchisees, particularly managing operators for entities, who are experienced hospitality professionals with a minimum of three years of restaurant and bar management experience. These individuals must be actively and substantially involved in the day-to-day operations and supervision of their Cheba Hut business.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Min Years Experience
3
Operational Details
Location Type
retail
Owner Participation
hands-on
Territory Type
limited
Territory Size Requirements
Cheba Hut Franchising, Inc. grants a territory for the operation of each Cheba Hut restaurant, typically defined as a two-mile radius around the restaurant location. This territory is determined based on the geographic area, population properties, and other relevant demographic characteristics within that area.
Staffing Notes
Cheba Hut Franchising, Inc. requires its franchisees to hire a Designated Manager who will be responsible for the daily on-site management and supervision of the Cheba Hut business. This Designated Manager must be an experienced hospitality professional with a minimum of three years of restaurant and bar management experience. Franchisees are responsible for determining appropriate staffing levels and for hiring, training, and supervising their employees. All employees must sign an acknowledgment form explaining the franchise relationship and that the franchisee is their sole employer, and this notice must be conspicuously posted in the back-of-house area.