FREEDOM OF SPEECH

CHEBA HUT TOASTED SUBS QSR CONCEPT IS A 'GATEWAY' TO NEW FRANCHISES

Daily Vista
Published: April 22, 2009

Cheba Hut Toasted Subs, a marijuana-themed restaurant concept, announced that it has opened its tenth location in Flagstaff, Ariz., with excited response from the local college community, according to NAZ Today.

The Mesa, Ariz.-based sub shop held a "4:20 Grand Opening" on April 20, based on the famous counterculture number, and offered a sub sandwich meal with chips and a drink all for $4.20.

The Cheba Hut concept features a Volkswagen van for every location that is decked out in Cheba Hut decals. The walls are covered in pro-marijuana legalization literature, "stoner" stickers and Bob Marley posters to titillate the senses of college students.

"Obviously we've got a great marketing hook with the green leafy substance we have on our menu, but that's just part of the counter-culture and its our first amendment right of freedom of expression and freedom of speech," Chief Operating Officer Matt Trethewey told NAZ.

The toasted sandwiches and stoner themes are intentionally marketed to the college demographic, but the real addiction at Cheba Hut is the food. The subs are available in three sizes: Nugs (4inch), Pinners (8-inch) and Blunts (12-inch), and come with the customer's choice of lettuce, onions, tomatoes, pickles and the "special" house dressing.

Trethewey told DailyVista that in addition to Cheba Hut's recent opening in Flagstaff, the company does have a bit of chatter on the East coast a well, but its only solid deals at the moment include a store under development in Scottsdale, Ariz., which will tie into the Arizona State University Campus and a deal in New Mexico, which will tie in with New Mexico State University.

"Those two deals are in the pipeline and we're actually about two weeks away from singing a multichannel deal for Austin (Texas)," he said. "They want to expand into College Station. We typically focus our development on college campuses; it's a good fit."

Trethewey said that the great thing about playing on a counterculture concept is that the audience is a lot bigger than most people think it is. Cheba Huts messaging certainly taps into a market that is a lot larger than previously thought.

"We actually go grassroots as much as we can, and that's not a pun," he said. "We take that approach to everything from corporate franchising to driving sales to stores. We do better out in the community and in front of people and creating buzz in marketplace than we do placing ads in the newspaper, and frankly it spreads like wildfire through word of mouth. We're surprised by it every day."

Trethewey said the "stoners" or the college students is a market that Cheba Hut has "on lock down" and as such, the restaurant concept doesn't need to aggressively market to this type of crowd. He said that the best part about Cheba Hut locations is drawing an even more diverse consumer that includes professionals and families.

"The marketing hook is right there, people might come in and see our signage and think that we're trying to get attention, but when people come in and try the food and eat the great food we provide, it sells them on it and they want to keep coming back," he said. "We're 11 years deep on this thing, if we didn't have good food, we wouldn't be in business."

Trethewey said that the company primarily markets to potential franchisees via the Internet and public relations initiatives, and is always looking for new markets and franchise investors, but on the other side of the strategy, the company focuses on marketing store-level awareness among individual consumers, which it does primarily through its grassroots efforts.

"As far as stores go, our angle is that every one of our stores has a classic old style VW bus and we deck them out with Cheba Hut logos, and we'll go through campus with four to eight people and throw Cheba Hut Frisbees with sub cards on them to make a presence," he said. "That's how we drive people to the store, but we do Web-based stuff with interviews and trade shows to expose the franchise concept."

Cheba Hut wants to do whatever makes sense for the growth of its system, and if that means making tweaks to its current marketing efforts, than so be it, but Trethewey said that with just two employees - himself and Founder, President and Chief Executive Officer Scot Jennings - the company is not like the corporate bigwigs at other major restaurant chain concepts.

"We're just real people and we're not high level ivory tower CEO's, just two guys trying to make their way," he said. "So we'll probably take a different approach as we get bigger, but we don't want to be a 5,000 unit concept. We're talking 250 to 300 of these locations on college campuses."

While Trethewey doesn't want to discourage families from stopping by Cheba Hut for a good meal, he said that he's not necessarily looking to specifically reach out to this type of market. He doesn't want to intentionally rub people the wrong way, but wants to market directly to those that are free thinkers, and those that embrace the right of freedom of speech.

"We want people to enjoy themselves. We don't really target a specific market, it's really just anyone with a mouth who likes to eat good food... the cross section of our customers would probably surprise most people that just think of Cheba Hut on the surface. It's Americans in there eating American food," he said.

Trethewey added that as a company, Cheba Hut is enjoying its current growth and hopes to continue to expand at a much slower pace than most concept restaurants. Being a very small company, he added that Cheba Hut has a small marketing budget that comes with it, and based on past experiences working with various firms, he has found that the team can get more done for less money.

"We have done some marketing online through franchising Web sites that pool franchise prospects and give you leads, and it just doesn't work for us because our franchisee is a unique individual - they're not afraid to wave the freak flag a little bit," he said. "What we'd rather do is have information in our stores, and a tremendous amount of information on the Internet and specifically on our site so we can educate people and answer questions directly."

In fact, most of Cheba Hut's franchising leads have generated from in-store interest, and while Trethewey said that there is a plan in motion, the company does not have the budget or the manpower to grow as aggressively as some of the bigger chains. He added that he would be "absolutely" open to hearing from DailyVista readers regarding prospective creative or project work, or perhaps a strategic alliance.

"If we don't grow and adapt and keep our eyes and ears open to opportunities, things don't work," he said. "We're open-minded individuals. We want to be able to expand our brand at a moderate pace and be able to support our franchisees at a high level, and if we can find a partnership or a contract that can allow us to do that, of course we'll be looking at those things as we evolve. Our system will be different tomorrow than it will be today, and we'll have to adapt to the situation we're in."