Dutch Bros paid 105M for a dead restaurant
Salad and Go filed for bankruptcy. Now Dutch Bros just shelled out $105M to buy 51 of its shuttered locations in Arizona and Nevada, plus up to 14 more in Oklahoma and Texas.
The insane part: the chain is literally more valuable in bankruptcy than it was operating. Two drive-thru coffee companies (Dutch Bros and 7 Brew) are locked in a bidding war for supremacy in an overheated market, and they're willing to throw cash at dead restaurant real estate to win. 7 Brew even went to court arguing it should get first crack at the deal.
This is what happens when two companies are desperate enough to sign leases they'll regret. Salad and Go lucked into the best bankruptcy ever. The real question is which of these two will be the next to file.
So Dutch Bros agreed to pay an astounding $105M for 51 locations of the shuttered Salad and Go concept in AZ/NV, plus the takeover of up to 14 locations in OK/TX. And we know why: 7 Brew was the other bidder (obviously). On Friday, 7 Brew argued in court that it had better bids than its rival and that Salad and Go should run an auction process. This is the most public battle between the two chains, which have an insatiable need for sites and are in a battle for supremacy in the fast-growing drive-thru beverage business. What bugs me about it is just how much they're willing to pay for this. Restaurants often fail or succeed based on the money they spend up front. Their battle could push them to sign leases or do deals they regret down the line. But this is all extremely good news for Salad and Go, which arguably filed the luckiest bankruptcy the restaurant industry has ever seen. More here: https://www.restaurantbusinessonline.com/financing/7-brew-thinks-it-not-dutch-bros-should-get-closed-salad-go-locations And I wrote this last week before the recent shenanigans: https://www.restaurantbusinessonline.com/financing/dutch-bros-paid-premium-salad-gos-leftovers
Source
x.com