Cheba Hut founders eye national expansion

Cheba Hut, the laid-back, weed-themed, toasted-sub franchise is ready to go national. 

The Fort Collins-based company opens its 20th store this month as it gets ready for its 20th anniversary in January. Owner and founder Scott Jennings has the company on a trajectory to more than double the number of stores in three years.

"The brand deserves to be national," Jennings said. The time is right given what he calls "the green bubble" — the increasing support for legalized medical and recreational marijuana.

More:The new Lyric sets opening date

Cheba Hut's success — the company did more than $25 million in sales last year — means investors are calling, putting Jennings in a somewhat uncomfortable position. 

He wants the additional capital, which could net between $10 million and $20 million, to meet his growth projections, but doesn't want to give up control of the franchise he started in Tempe, Arizona, in 1998.

"In order for us to take care of our customers and our employees, which we believe are the same thing, taking the company national is inevitable," Jennings said.

Whether that expansion occurs through investor funding, debt financing or franchising "will be a game-time decision. We need to see who is at the table and how much of our soul they would want," Jennings said from his second-floor office off Link Lane, across from Flower Power Botannicals, one of the dozen pot shops in and around Fort Collins.

"If you're not growing, you're dying," he said.

More:Heavy August rains push back Ginger & Baker opening

Jennings sold the two Fort Collins Cheba Huts in 2014 but recently bought them back and formed a partnership with franchisees Marc Torres and Dave Timmons, who owned the Fort Collins and Greeley locations.  

Currently, about 60 percent of Cheba Huts are run by franchisees. That ratio will shift to 50-50 by early next year, said Jennings, who from now on plans to open only company stores. 

Since it rolled all stores into one company, "we are putting up numbers we never thought were possible and providing true opportunity for our people," he said. "Now that we have combined resources, we are concentrating on bringing value to our customers."

Cheba Hut opened its largest store in Longmont last week and is ready to open in Las Vegas. Longmont's Cheba Hut features a space theme in honor of Longmont astronaut Vance Brand. In its first week, the store at the corner of Longs Peak and Main Street did $45,000 in sales, Jennings said. 

More:Elizabeth Hotel restaurant, lounges put out hiring call

"Imagine 100 Cheba Huts that all look different," he said. "We don't want to cookie cutter them. We want each one to have a different feel." 

Jennings is also looking for a new location on Harmony Road, which would be modeled after the Longmont store, with an indoor/outdoor space and expansive patio. 

Jennings moved Cheba Hut's national offices from Arizona to 1305 Duff Drive, No. 7, nearly three years ago. Jennings has lived in Fort Collins since 2003, when he opened the city's first Cheba Hut at Laurel Street and College Avenue, where it remains today. 

In addition to Cheba Hut, Jennings owns The Forks general store and restaurant in Livermore and The Still Whiskey Steaks in Old Town Fort Collins.