Cheba Hut Franchise Cost, Revenue & Review 2026
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Cheba Hut franchise requires a total initial investment of $631K – $2.1M, including a $50K franchise fee and an ongoing 5.0% royalty[2]. Per the latest FDD, average unit revenue was $2.3M[2]. SBA 7(a) loans show a 0.0% charge-off rate across 23 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified
Overview
- Investment
- $631K – $2.1M
- 40th pct Service Resta…
- Avg gross sales
- $2.3M
- 23rd pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 83
- 41st pct Service Resta…
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- Total investment $631K – $2.1M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.3M/year (median $2.3M).
- Verdict A (Strongest tier), verdict score 93/100 (higher is better). SBA loan charge-off rate of 0.0% across 23 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- System growing at 37.9% CAGR over 3 years with 83 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Cheba Hut Franchising, Inc.
- CEO title
- Chief Executive Officer
- Marc Torres
- Incorporated in
- Arizona
- HQ
- 400-A N. College Avenue, Fort Collins, Colorado 80524
Overview
About
Quick-service restaurants offering toasted submarine sandwiches, original sauces, salads, soups, chips, brownies, and other food/beverage items in a fun, casual atmosphere
- CEO
- Marc Torres
- Headquarters
- Colorado
- Founded
- 2001
- States available
- 18
Can you afford it, and what does the money buy?
Entry cost runs 44% above the typical full-service restaurants franchise.
Source: FDD · Items 5–7
FDD Item 7
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $50K | $100K |
| Equipment, build-out, other | $531K | $1.9M |
| Total initial investment | $631K | $2.1M |
Source: Cheba Hut FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $631K – $2.1M
- Top 40% of category vs category
- Liquid capital req'd
- $50K – $100K
- Top 40% of category vs category
- Franchise fee
- $50K
- Middle of category vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 0.1%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $1K |
| Transfer fee | $10K |
| Renewal fee | $25K |
| Inventory (initial) | $15K – $30K |
| Total fee load | 0.1% of rev |
A 0.1% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 53% above the full-service restaurants norm.
Source: FDD · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$257K
11.0% margin
Unlevered ROIC
18%
EBITDA / total invested capital
Payback
5.6 yrs
cash-on-cash, unlevered
Financial Performance
- Avg gross sales
- $2.3M
- Per unit, per year
- Median gross sales
- $2.3M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- historical_net_sales_by_quartile
- Sample size
- 73 units
- vs category median 16 · large
- Range (low → high)
- $611K→$3.9M
- Cohort dispersion (min → max)
- Quartile band
- $1.3M→$3.4M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
Compared against 1273 Full-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $2.3M/year in gross sales. Revenue-to-investment ratio: 1.7x.
Fee burden
Total ongoing fee load of 0.1% — below the Full-Service Restaurants average of 7.6%.
Operator retention
System expanding at 37.9% CAGR over 3 years across 83 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Full-Service Restaurants averages
How Cheba Hut Compares
Is the system healthy?
Source: FDD · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 83
- Opened
- 7
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 3
- Corporate units in the system
- % franchised
- 96%
- vs corporate-owned
- Net growth (3-yr)
- +37.9%
- Net unit change over 3 years
- 3-yr CAGR
- +37.9%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 7
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 18 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
18
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 23
- Loan volume
- $14.1M
- Median loan
- $670K
- 50th percentile
- Charge-off rate
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 15
- Defaults
- 0
- Typical loan rate
- 7.9%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7225
- Jobs supported
- 742
- 5.3 per loan
- Lender concentration
- 17%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Top lenders financing Cheba Hut franchisees
Showing 3 of 15 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
With a 0.0% charge-off rate across 23 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Litigation (Item 3)
Capital Canada Limited v. Cheba Hut Franchising Inc., Scott Jennings, Marc Torres, Seth Larsen, James Wedding (Ontario Superior Court of Justice, filed Oct 30, 2025) - plaintiff investment bank alleges breach of contract to pay a $1,080,000 USD "Success Fee" tied to introducing a strategic partner/financing transaction; includes misrepresentation counts; case pending, franchisor intends to defend.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
What are you signing up for?
Ongoing fees run about 0.1% of sales (royalty + ad fund), before rent and labor.
Source: FDD · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory radius | 2 mi |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Mandatory arbitration | Yes |
| Arbitration location | Fort Collins, Colorado (principal city closest to franchisor's principal place of business) |
| Governing law | Colorado |
| Litigation count | 1 |
View Item 3 litigation summary
Capital Canada Limited v. Cheba Hut Franchising Inc., Scott Jennings, Marc Torres, Seth Larsen, James Wedding (Ontario Superior Court of Justice, filed Oct 30, 2025) - plaintiff investment bank alleges breach of contract to pay a $1,080,000 USD "Success Fee" tied to introducing a strategic partner/financing transaction; includes misrepresentation counts; case pending, franchisor intends to defend.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 152 hrs
- Training location
- Fort Collins, Colorado
- Ongoing training
- Required
- Time to open
- 15 mo
- From signing to launch
- Site selection
- joint - franchisee selects subject to franchisor approval; franchisor provides approved real estate/construction management supplier and assists with lease negotiation
- Franchisor financing
- Not offered
- Item 10
- POS system
- Toast
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Cheba Hut franchise?
The total investment to open a Cheba Hut franchise ranges from $631K – $2.1M, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Cheba Hut franchise owners earn?
According to Item 19 of the Cheba Hut FDD, the average gross sales per unit is $2.3M. The median is $2.3M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Cheba Hut's franchise failure rate?
Based on SBA 7(a) loan data, Cheba Hut has a charge-off rate of 0.0% across 23 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Cheba Hut franchise locations are there?
As of their most recent FDD filing, Cheba Hut has 83 total units in the United States, including 80 franchised units and 3 company-owned units. 7 new units were opened in the latest reporting year.
Is Cheba Hut a good franchise to buy?
FranchiseVerdict rates Cheba Hut as a A-grade franchise with a verdict score of 93 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.