Dutch Bros. goes public with big expansion plans

Dutch Bros. Inc. made its public debut Wednesday, after its initial public offering came in well above expectations.

The Oregon-based, West Coast cult-fave drive-through coffee chain priced at an above-range $23 a share, which valued the company at about $3.8 billion. Dutch Bros., which sold 21.05 million shares in the IPO to raise $484.2 million, is now trading on the NYSE under the ticker symbol "BROS."

Dutch Bros. has expanded aggressively in recent years, and currently operates 471 locations (207 company-operated, 264 franchised) in 11 Western states, including Washington, Oregon, Idaho and California.  The company said in its filing that it hopes to eventually to have 4,000 shops, with the majority of its growth to be company-owned locations.  (In 2017, Dutch Bros.  stopped franchising and shifted to a company-operated model.)

“While we maintain great relationships with our existing franchise partners and they continue to open new shops as they look to infill their high-demand markets, the majority of our growth is expected to continue to come from company-operated shops,” the company said in its prospectus.  

Dutch Bros., which serves a variety of energy drinks and other beverages in addition to coffee, was founded in 1992 with a single pushcart by brothers Travis and Dane Boersma. (Dane Boersma died of Lou Gehrig's disease in 2009.) Although it does operate some sit-down cafes, most of its locations are drive-thru and have one or two lanes. Some offer outdoor or patio-seating.

“While we maintain great relationships with our existing franchise partners and they continue to open new shops as they look to infill their high-demand markets, the majority of our growth is expected to continue to come from company-operated shops,” the company said in its prospectus.

In its filings, Dutch Bros. outlined a stock structure that would give executive chairman Travis Boersma 74% of the company’s voting power. The company’s charter also contains provisions that would make it difficult for an outside firm to mount a hostile takeover, reported The Register-Guard.

In 2020, Dutch Bros.’ revenue rose 27% to $327.4 million, with revenues of $245 million from company-owned stores and $83 million from franchised shops.