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What changed in Dutch Bros Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Dutch Bros Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+396 added−359 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-13)

Top changes in Dutch Bros Inc.'s 2025 10-K

396 paragraphs added · 359 removed · 314 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

52 edited+17 added−10 removed45 unchanged
Biggest changeThe chart below provides the approximate percentage of systemwide employees by shop type and state location: Dutch Bros Inc. | Form 10-K | 11 Table of Contents The charts below provide the approximate percentages of our company-operated shop and headquarters employees by gender and ethnicity: Dutch Bros Inc. | Form 10-K | 12 Table of Contents Sharing the Dutch Luv We are committed to sharing the Dutch Luv at our headquarters, at the window, and in our communities, cultivating an inclusive environment of love, acceptance, and kindness.
Biggest changeSharing the Dutch Luv We are committed to sharing the Dutch Luv at our headquarters, at the window, and in our communities, cultivating an inclusive environment of love, acceptance, and kindness. Our commitment strives to ensure all customers, crews, and communities are welcomed, honored, and loved.
Legacy Configuration Current Configuration Endcap Configuration Size: ~500 square feet Size: ~800-1,000 square feet Size: ~1,200 square feet Geographies: Legacy West Coast Geographies: Widespread Geographies: Select Locations Characteristics: May have drive-thru lanes on both sides of the building; walk-up window optional; no lobby; storage outbuilding may be needed.
Legacy Configuration Current Configuration Endcap Configuration Size: ~500 square feet Size: ~800-1,000 square feet Size: ~1,000-1,200 square feet Geographies: Legacy West Coast Geographies: Widespread Geographies: Select Locations Characteristics: May have drive-thru lanes on both sides of the building; walk-up window optional; no lobby; storage outbuilding may be needed.
In the event of a supply disruption in any one of our production origins, we have identified alternate coffee beans with substantially similar flavor profiles that can be sourced and incorporated to produce our blend. In mid-2024, we opened a new roasting facility in Melissa, Texas.
In the event of a supply disruption in any one of our production origins, we have identified alternate coffee beans with substantially similar flavor profiles that can be sourced and incorporated to produce our blend. In 2024, we opened a new roasting facility in Melissa, Texas.
In addition to being convenient for customers, Dutch Pass enables us to increase our speed of service by reducing the payment collection time. Our Dutch Pass functionality also allows users to purchase and share digital gift cards, providing more customers the opportunity to share in the Dutch Bros experience.
In addition to being convenient for customers, Dutch Pass enables us to increase our speed of service by reducing the payment collection time. Our Dutch Pass functionality also allows users to purchase and share gift cards, providing more customers the opportunity to share in the Dutch Bros experience.
In 2023, we began rolling out tap systems and distributing our Dutch Bros Rebel energy drink via a “bag in a box” system for use in shop beverage taps, with a goal of helping us reduce our dependence on aluminum cans.
In 2023, we began rolling out tap systems and distributing our Dutch Bros Rebel energy drink via a “bag in a box” system for use in shop beverage taps, with the goal of helping us reduce our dependence on aluminum cans.
Whether customers choose our drive thru or walk-up window, their drink is personally delivered with a friendly interaction from a broista, which we believe helps maintain and strengthen service and connection as competitive differentiators. Our mobile order system interacts with our existing point-of-sale and kitchen display system, easing integration with our operations.
Whether customers choose our drive thru or walk-up window, their drink is personally delivered with a friendly interaction from a broista, which we believe helps maintain and strengthen service and connection as competitive differentiators. Our order ahead system interacts with our existing point-of-sale and kitchen display system, easing integration with our operations.
We currently utilize a mixed model, where we continue to encourage our franchisees to develop within their existing operating areas (where we believe there is significant room for continued growth) while developing new regions with company-operated shops. Since 2017, our focus has been a company-operated strategy with all operators recruited from within our system.
We currently utilize a mixed model, where we continue to encourage our franchisees to develop within their existing operating areas (where we believe there is significant room for continued growth) while developing new regions with company-operated shops. Since 2017, our focus has been a company-operated strategy with all operators recruited from within our organization.
Earlier in her career, she held positions with Bain & Company and Raymond James. Since March 2020, Ms. Barone has served on the Board of Directors of Yelp Inc. Ms. Barone holds a B.A. in Applied Mathematics and an M.B.A. from Harvard University. Joshua Guenser, 46 Chief Financial Officer Mr.
Earlier in her career, she held positions with Bain & Company and Raymond James. Since March 2020, Ms. Barone has served on the Board of Directors of Yelp Inc. Ms. Barone holds a B.A. in Applied Mathematics and an M.B.A. from Harvard University. Joshua Guenser, 47 Chief Financial Officer Mr.
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, we anticipate that the majority of new shops we open each year will be company-operated shops. OUR GROWTH STRATEGIES We are a high-growth company with considerable whitespace and opportunities.
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, we anticipate that the majority of new shops we open each year going forward will continue to be company-operated shops. Our Growth Strategies We are a high-growth company with considerable whitespace and opportunities.
Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. Today, we believe that Dutch Bros is one of the fastest-growing brands in the quick service beverage industry in the United States by location count.
Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. Today, we believe that Dutch Bros is one of the fastest-growing brands in the quick service beverage industry in the United States.
Prior to serving as our Executive Chairman, he served as the Chief Executive Officer of Dutch Bros OpCo from February 2019 to February 2021. Mr. Boersma has led us as Co-Founder since 1992. Mr. Boersma attended Southern Oregon University. Christine Barone, 51 Chief Executive Officer and President Ms.
Prior to serving as our Executive Chairman, he served as the Chief Executive Officer of Dutch Bros OpCo from February 2019 to February 2021. Mr. Boersma has led us as Co-Founder since 1992. Mr. Boersma attended Southern Oregon University. Christine Barone, 52 Chief Executive Officer and President Ms.
We utilize Dutch Rewards to communicate and interact directly with our customers and drive traffic. We see an opportunity to continue enhancing the sophistication of our segmentation and targeting efforts, using consumer insights to drive behaviors that we expect will create lasting value.
We utilize Dutch Rewards to communicate and interact directly with our customers and drive transactions. We see an opportunity to continue enhancing the sophistication of our segmentation and targeting efforts, using consumer insights to drive behaviors that we expect will create lasting value.
We believe our shops are well situated for mobile order, with multiple beverage production bars and escape lanes and pick-up windows at many of our shops. We have the ability to throttle production at peak times to help ensure smooth operations.
We believe our shops are well situated for order ahead, with multiple beverage production bars and escape lanes and pick-up windows at many of our shops. We have the ability to throttle production at peak times to help ensure smooth operations.
Information About our Executive Officers The executive officers of Dutch Bros Inc. as of the filing of this Form 10-K, are as follows: Travis Boersma, 54 Co-founder and Executive Chairman of the Board Mr. Boersma is our Co-Founder and has served as our Executive Chairman since August 2021 and as the Executive Chairman of Dutch Bros OpCo since February 2021.
Information About our Executive Officers The executive officers of Dutch Bros Inc. as of the filing of this Form 10-K, are as follows: Travis Boersma, 55 Co-founder and Executive Chairman of the Board Mr. Boersma is our Co-Founder and has served as our Executive Chairman since August 2021 and as the Executive Chairman of Dutch Bros OpCo since February 2021.
For our continued growth, it is critical that we consistently train and develop new leaders. Our leadership development program outlines shop growth opportunities at all levels of the organization and furthers our philosophy of hiring and developing leaders from within.
For our continued growth, it is critical that we consistently train and develop new leaders. Our leadership development program, branded “LEAD” outlines shop growth opportunities at all levels of the organization and furthers our philosophy of hiring and developing leaders from within.
Dutch Bros Inc. | Form 10-K | 15 Table of Contents Government Regulation and Environmental Matters We are subject to extensive federal, state, local, and foreign laws and regulations, as well as other statutory and regulatory requirements, including those related to, among others, nutritional content labeling and disclosure requirements, food safety regulations, local licensure, building, and zoning regulations, employment regulations, and laws and regulations related to our licensed operations.
Dutch Bros Inc. | Form 10-K | 14 Table of Contents Government Regulation and Environmental Matters We are subject to extensive federal, state, local, and foreign laws and regulations, as well as other statutory and regulatory requirements, including those related to, among others, nutritional content labeling and disclosure requirements, food safety regulations, local licensure, building, and zoning regulations, employment regulations, laws and regulations related to our licensed operations, and environmental reporting requirements.
We expect this facility will increase the resilience of our supply chain and reduce transportation costs as we expand company-operated shops eastward within the United States. Sourcing and Supply Chain In addition to coffee purchases, we also source dairy, syrups, packaging, Dutch Bros Rebel energy drink, and other items.
This facility increases the resilience of our supply chain and we expect this to reduce transportation costs as we expand company-operated shops eastward within the United States. Sourcing and Supply Chain In addition to coffee purchases, we also source dairy, syrups, packaging, Dutch Bros Rebel energy drink, and other items.
We will continue expanding our business to positively impact our communities through the following growth strategies: GROW OUR PEOPLE: SCALE OUR CULTURE • Recruit, develop, and retain great people • Provide robust internal training and career advancement programs, which help develop a high-quality talent pool of candidates seeking larger roles within the Company • Target 100% internal promotion for regional operators from a list of 400+ qualified candidates with an average tenure of 7 years • Invest in our leadership team to support operations and drive strategy Dutch Bros Inc. | Form 10-K | 8 Table of Contents GROW OUR SHOP BASE: EXECUTE ON OUR LARGE WHITESPACE • Open new shops with superior financial returns • Target a “mid-teens” annual new shop growth rate • Invest in our shop development teams so they can utilize new data sources, analytic techniques, and tighter underwriting standards • Utilize a refined real estate strategy that balances penetration and pacing to support new shop productivity as we grow in new markets GROW TRANSACTIONS: DEVELOP SALES LAYERS • Innovation - assume an innovation leadership position within the beverage industry, keeping the brand fresh and encouraging trial and frequency • Paid Media - build brand awareness in new and existing markets through enhanced messaging and elevated spending • Dutch Rewards - increase sophistication of our segmentation and offers to drive more effective communication and higher frequency • Mobile Order - offer greater convenience, widen our addressable customer set, and seek to drive frequency, especially in the morning daypart where customers may have greater time constraints. • Food - test an expanded food offering in 2025 to better address customer needs in the critical morning daypart.
We will continue expanding our business to positively impact our communities through the following growth strategies: Grow Our People: Scale Our Culture • Recruit, develop, and retain great people • Provide robust internal training and career advancement programs, which help develop a high-quality talent pool of candidates seeking larger roles within the Company • Target 100% internal promotion for regional operators from a list of approximately 475 qualified candidates with an average tenure of more than 7.5 years • Invest in our leadership team to support operations and drive strategy Dutch Bros Inc. | Form 10-K | 8 Table of Contents Grow Our Shop Base: Execute On Our Large Whitespace • Open new shops with superior financial returns • Target a “mid-teens” annual new shop growth rate • Invest in our shop development teams so they can utilize new data sources, analytic techniques, and tighter underwriting standards • Utilize a refined real estate strategy that balances infill penetration and pacing to support new shop productivity as we grow in new markets Grow Transactions: Develop Sales Layers • Innovation - assume an innovation leadership position within the beverage industry, keeping the brand fresh and encouraging trial and frequency • Paid Media - build brand awareness in new and existing markets through enhanced messaging and elevated spending • Dutch Rewards - increase sophistication of our segmentation and offers to drive more effective communication and higher frequency • Order Ahead - offer greater convenience, widen our addressable customer set, and seek to drive frequency, especially in the morning daypart where customers may have greater time constraints • Food - expand food offering in 2026 to better address customer needs in the critical morning daypart.
This program provides ample opportunities for our shop broistas to create their own pathway, which can be a mix of Path A and B, to reach their potential goals.
This program provides ample opportunities for our shop broistas to create their own compelling future pathway, which can be a mix of Path A and B, to reach their potential goals.
On average, we typically have approximately four months of green coffee bean inventory stored at our two ports of entry in the United States or at our roasting facilities.
On average, we typically have approximately three months of green coffee bean inventory stored at our two ports of entry in the United States or at our roasting facilities.
We intend to continue investing in consumer insights and moving toward more personalized marketing to offer targeted messaging, offers, and rewards that enhance the Dutch Bros experience at an attractive return on investment. Mobile Order In 2024, we launched mobile order functionality within our Dutch Rewards app.
We intend to continue investing in consumer insights and moving toward more segmented marketing to offer targeted messaging, offers, and rewards that enhance the Dutch Bros experience at an attractive return on investment. Order Ahead In 2024, we launched order ahead functionality within our Dutch Rewards app.
Our Dutch Rewards Loyalty Program Dutch Rewards is our app-based digital loyalty program. In 2024, approximately 68% of all transactions were attributable to Dutch Rewards members, up from approximately 65% in 2023. Dutch Rewards uses a spend-based model, where customers collect points that can be redeemed for rewards.
Our Dutch Rewards Loyalty Program Dutch Rewards is our app-based digital loyalty program. In 2025, approximately 72% of all transactions were attributable to Dutch Rewards members, up from approximately 68% in 2024. Dutch Rewards uses a spend-based model, where customers collect points that can be redeemed for rewards.
In 2024, we launched mobile order functionality which we expect could help us elevate throughput and enhance convenience. • QUALITY: We take pride in the training and skills of our broistas, which enable them to provide consistent, high-quality hand-crafted beverages to our customers. • SERVICE: We embrace a customer-first attitude and use every interaction to connect with our customers and seek to deliver an experience that exceeds our customers’ expectations.
In 2024, we launched order ahead functionality to elevate throughput and enhance convenience. • QUALITY: We take pride in the training and skills of our broistas, which enable them to provide consistent, high-quality hand-crafted beverages to our customers. • SERVICE: We embrace a customer-first attitude and use every interaction to connect with our customers and seek to deliver an experience that exceeds our customers’ expectations.
Our Menu We sell a wide range of customizable hot, iced, and blended beverages. • Coffee: coffee-based beverages make up ~50% 1 of our menu mix. In our shops, we utilize premium La Marzocco machines to handcraft espresso shots for both our hot and cold custom classic and signature coffee beverages.
Our Menu We sell a wide range of customizable hot, iced, and blended beverages, as well as certain food offerings. • Coffee: coffee-based beverages make up ~50% 1 of our menu mix. In our shops, we utilize premium La Marzocco machines to handcraft espresso shots for both our hot and cold custom classic and signature coffee beverages.
Blue Rebel” word marks and our recognizable Dutch Bros sign logo. We believe the Dutch Bros name and the many distinctive marks associated with it are of significant value and are very important to our business. Accordingly, as a general policy, we pursue registration and monitor the use of our marks in the United States and challenge unauthorized use.
We believe the Dutch Bros name and the many distinctive marks associated with it are of significant value and are very important to our business. Accordingly, as a general policy, we pursue registration and monitor the use of our marks in the United States and challenge unauthorized use.
Broista Training • 2 day cultural immersion, history, and fundamental knowledge • 10 shifts of on-the-job training • Review of “Manifesto,” field guide, and employee handbook, and have proficiency tests twice per year Dutch Bros Inc. | Form 10-K | 13 Table of Contents Leadership Pathways We exclusively source regional operators, who we view as the linchpins of our field organization and lead between 3-7 shops at scale, from within our organization.
Broista Training • 3 days of “Manifesto” Training: cultural immersion, history, and fundamental knowledge • 7 shifts of on-the-job positional training • Review of Manifesto, field guide, and employee handbook, and have proficiency tests twice per year Dutch Bros Inc. | Form 10-K | 12 Table of Contents Compelling Future Pathways We exclusively source regional operators, who we view as the linchpins of our field organization and lead between 3-7 shops at scale, from within our organization.
Philanthropy Since our inception, we have been dedicated to giving back to the communities in which we serve, and we consider our brand to be a powerful platform for social impact. Our philanthropic efforts support local and national causes.
Philanthropy Since our inception, we have been dedicated to giving back to the communities in which we serve, and we consider our brand to be a powerful platform for social impact. Our philanthropic efforts support local and national causes as well as the farmers, families and communities where our coffee beans grow.
A culture of philanthropy and giving back to build better communities permeates the entire Dutch Bros organization, energizing our broistas and customers alike. We host three company-wide giveback days each year. Dutch Bros, along with our franchise partners and the Dutch Bros Foundation (the Foundation) provide donations for funds raised in each of these giveback days.
A culture of philanthropy and giving back to build better communities permeates the entire Dutch Bros organization, energizing our broistas and customers alike. In partnership with the Dutch Bros Foundation (the Foundation) and our franchise partners, we host company-wide giveback days each year.
Every May, in honor of our co-founder Dane Boersma, we raise funds for the Muscular Dystrophy Association to find a cause and cure for ALS, or Lou Gehrig’s disease.
In May, in honor of our co-founder Dane Boersma, we hosted a fundraising event to support the Muscular Dystrophy Association to find a cause and cure for ALS, or Lou Gehrig’s disease.
Our energy platform helps unlock the afternoon daypart and helps us appeal to a diverse customer base. • Refreshments and Other: the remaining ~25% 1 of our menu mix is a wide variety of teas, lemonades, smoothies, food, and sodas offering caffeine-lite and caffeine-free beverages that can be enjoyed across all dayparts and by customers of all ages. _________________ 1 Based on number of drinks sold across our system in 2024.
Our energy platform helps us appeal to a diverse customer base. • Refreshments and Other: the remaining ~25% 1 of our menu mix is a wide variety of teas, lemonades, smoothies, and sodas offering caffeine-lite and caffeine-free beverages that can be enjoyed across all dayparts and by customers of all ages.
Neither our Dutch Bros Rebel energy drink, nor our syrups contain high-fructose corn syrup, as we use pure cane sugar as a sweetener for our non-sugar free offerings. As we scale, we continue to look for opportunities to mitigate our impact on the environment.
Neither our Dutch Bros Rebel energy drink, nor our syrups, contain high-fructose corn syrup, as we use pure cane sugar as a sweetener for our non-sugar free offerings.
Dutch Bros Inc. | Form 10-K | 6 Table of Contents We believe mobile order provides enhanced convenience to our customers, allowing for orders to be placed in advance of customers arriving at a shop and offering an alternative to waiting in line.
Dutch Bros Inc. | Form 10-K | 6 Table of Contents Order ahead provides enhanced convenience to our customers, allowing for orders to be placed in advance of customers arriving at a shop and offering an alternative to waiting in line. Compared to our peers in the beverage industry, we have an opportunity to drive transactions in the morning daypart.
Quality, Health, and Safety We and our franchise partners strive to maintain a safe, healthy environment at each shop through the careful training and supervision of personnel and by following rigorous quality standards. Our quality assurance team informs, monitors, and reports on standards for preparation and cleaning at each of our shops.
Quality, Health, and Safety We and our franchise partners strive to maintain a safe, healthy environment at each shop through the careful training and supervision of personnel and by following rigorous quality standards. Both company operated and franchise shops receive quality assurance inspections on a regular cadence.
For additional information regarding company-operated and franchise shops by state, refer to Part I, Item 2 Properties of this Form 10-K Dutch Bros Inc. | Form 10-K | 4 Table of Contents The Dutch Bros Experience Dutch Bros is more than just the products we serve: we are dedicated to making differences in the lives of our employees, customers, and the communities in which we operate.
Dutch Bros Inc. | Form 10-K | 4 Table of Contents The Dutch Bros Experience Dutch Bros is more than just the products we serve: we are dedicated to making differences in the lives of our employees, customers, and the communities in which we operate.
As of December 31, 2024, over 95% of systemwide shops had mobile order functionality enabled. In most cases, customers can choose to park and pick-up at our walk-up window or pick up their order in our drive thru. To date, many customers have chosen to utilize the pick-up feature, which we believe has considerable capacity.
Customers can either choose to park and pick-up at our walk-up window or pick-up their order in our drive thru. To date, many customers have chosen to utilize the pick-up feature, which we believe has considerable capacity.
Compared to our peers in the beverage industry, we believe we have an opportunity to drive traffic in the morning daypart. Mobile order may present an opportunity to appeal to a broader range of customers who may be time-constrained in the morning and have not previously considered Dutch Bros as part of their morning routine.
Order ahead may present an opportunity to appeal to a broader range of customers who may be time-constrained in the morning and have not previously considered Dutch Bros as part of their morning routine. Our Shops Speed is core to what we do at Dutch Bros.
Davila is a Fulbright Scholar and holds a B.A. in International Studies and German from Washington University in St. Louis, a J.D. from Seton Hall University, and an M.B.A. from Emory University. Victoria Tullett, 57 Chief Legal Officer Ms.
Davila has served on the board of directors of El Pollo Loco (NASDAQ:LOCO) since January 2026. Ms. Davila is a Fulbright Scholar and holds a B.A. in International Studies and German from Washington University in St. Louis, a J.D. from Seton Hall University, and an M.B.A. from Emory University. Victoria Tullett, 58 Chief Legal Officer Ms.
Our Shops Speed is core to what we do at Dutch Bros. We primarily utilize a drive-thru model: approximately 90% of our business is conducted through the drive-thru with the remaining 10% conducted at our walk-up windows. The vast majority of our shops do not have lobbies with customer seating areas.
We primarily utilize a drive-thru model: approximately 85% of our business is conducted through the drive-thru with the remaining 15% conducted at our walk-up windows. The vast majority of our shops do not have lobbies with customer seating areas. We believe our business model places a premium on customer convenience without sacrificing the personal experience.
Our competitors operate company-operated, franchised, and mixed business models. In addition, we also compete with convenience stores. Intellectual Property We own many registered trademarks and service marks in the United States, the most important of which might be our trademarked Windmill logo. Other important trademarks include our “Dutch Bros,” “Dutch Bros Coffee,” “Dutch Bros Rebel,” and “Dutch Bros.
Intellectual Property We own many registered trademarks and service marks in the United States, the most important of which might be our trademarked Windmill logo. Other important trademarks include our “Dutch Bros,” “Dutch Bros Coffee,” “Dutch Bros Rebel,” and “Dutch Bros. Blue Rebel” word marks and our recognizable Dutch Bros sign logo.
Except for a handful of legacy “coffee houses,” which do have lobby areas, our shops are designed to enable customers to drive-thru or walk-up and enjoy their beverage off premises. Most of our shops feature either a single or double drive-thru window with multiple feeder lanes for traffic flow and a walk-up window.
We typically target lots that are at least 25,000 square feet to handle substantial car volume. Except for a handful of legacy “coffee houses,” which do have lobby areas, our shops are designed to enable customers to drive-thru or walk-up and enjoy their beverage off premises.
GROW MARGINS: DELIVER LONG-TERM MARGIN EXPANSION • Continue targeting year-2 contribution margins of 30%+ for new shops, which support quick paybacks and funds new unit growth • Seek opportunities to continue to reinforce our shop-level P&L through operational improvement, which will enable us to continue investing to maintain our competitive advantages • Continue targeting and achieving Adjusted SG&A leverage through strong revenue growth and smart investments Operations Coffee Procurement and Roasting We pride ourselves on the quality of our coffee.
We aim to capture beverage occasions with potential customers who desire breakfast with their morning beverage and choose options other than Dutch Bros currently • Throughput - make strategic labor deployment decisions to drive a consistent and elevated customer experience Grow Margins: Deliver Long-term Margin Expansion • Continue targeting company-operated contribution margins of ~30%, supporting quick capital paybacks and funding future shop growth • Seek opportunities to continue to reinforce our shop-level P&L through operational improvements, which will enable us to continue investing to maintain our competitive advantages • Continue targeting and achieving Adjusted SG&A leverage through strong revenue growth and smart investments Operations Coffee Procurement and Roasting We pride ourselves on the quality of our coffee.
The Foundation is a not-for-profit founded by the Company that provides philanthropy to coffee farmers and local communities. Dutch Bros Inc. | Form 10-K | 14 Table of Contents “Dutch Luv” “Drink One for Dane” “Buck for Kids” Every February, we donate proceeds from every drink sold to local organizations working to fight food insecurity in our communities.
Dutch Bros Inc. | Form 10-K | 13 Table of Contents “Dutch Luv” “Drink One for Dane” “Buck for Kids” In February, we hosted a giveback day in support of local organizations working to fight food insecurity in our communities.
Guenser holds a Master of Professional Accounting and a B.A. in Business Administration from the University of Washington. Dutch Bros Inc. | Form 10-K | 16 Table of Contents Sumi Ghosh, 57 President of Operations Mr.
Guenser holds a Master of Professional Accounting and a B.A. in Business Administration from the University of Washington. Dutch Bros Inc. | Form 10-K | 15 Table of Contents Tana Davila, 43 Chief Marketing Officer Ms. Davila has served as our Chief Marketing Officer since June 2023.
Products are evaluated for risk on the basis of other numerous factors, including price volatility, supply continuity, and sustainability. People Our people are the heart of our mission and the foundation of our success. We strive to build meaningful relationships with our employees, who are key members of the communities we love and serve.
Our supply chain risk model stretches beyond food safety and quality assurance practices. Products are evaluated for risk on the basis of other numerous factors, including price volatility, supply continuity, and sustainability. People Our people are the heart of our mission and the foundation of our success.
Although our shops typically have a smaller overall footprint than other drive-thru formats, essentially all of our square footage is used to support the production of beverages. We typically target lots that are at least 25,000 square feet to handle substantial car volume.
Our shops and our real estate strategy are designed from the ground up to support this drive-thru centric business. Although our shops typically have a smaller overall footprint than competitors drive-thru formats, essentially all of our square footage is used to support the production of beverages.
Our commitment to beverage and food safety is strengthened through the direct relationships among our supply chain, culinary research and development, food safety, operations, and quality control teams. We collaborate with our supply chain partners on material decisions regarding ingredients and process changes to ensure our final customer-facing product meets our standards of approval.
We collaborate with our supply chain partners on material decisions regarding ingredients and process changes to ensure our final customer-facing product meets our standards of approval. We examine new and existing suppliers’ food safety and quality records through compliance assessments, and we reserve the right to conduct spot-checks, onsite audits, and verify insurance coverage.
We attract individuals who love growth, thrive in unique and fun environments, and radiate positivity. With a love for life, a natural ability to connect with others in any circumstance, and a genuine smile, our team members embody everything that makes Dutch Bros special.
With a love for life, a natural ability to connect with others in any circumstance, and a genuine smile, our team members embody everything that makes Dutch Bros special. As of December 31, 2025, we and our franchise partners have approximately 32,000 employees, of which approximately 23,000 employees are in our company-operated shops and headquarters.
Competition The beverage industry is highly competitive and fragmented, and our shops compete on a variety of factors, including convenience, taste, price, quality, service, labor, and location. We believe our primary competitors include national and regional coffee chains, local specialty coffee shops, regional drive-thru beverage chains, and drive-thru quick service restaurants with coffee and other beverage programs.
In 2025, our local giveback days resulted in over $1.5 million donated to approximately 180 local organizations. Competition The beverage industry is highly competitive and fragmented, and our shops compete on a variety of factors, including convenience, taste, price, quality, service, labor, and location.
Furthermore, as part of our broista onboarding process, new hires are taken through our “broista manifesto” which includes food safety training. Before working a shift on their own, broistas must pass our “flow check” test, which ensures they can make every drink to our high standards. Our supply chain risk model stretches beyond food safety and quality assurance practices.
Before working a shift on their own, broistas must pass our “flow check” test, which ensures they can make every drink to our high standards. We have recently strengthened and improved our food safety training to include programs and practices that address the expected wider rollout of our food program.
We examine new and existing suppliers’ food safety and quality records through compliance assessments, and we reserve the right to conduct spot-checks, onsite audits, and verify insurance coverage. We believe that our established requirement for franchise partners to purchase supplies and equipment from approved vendors further enhances safety and quality within our system.
We believe that our established requirement for franchise partners to purchase supplies and equipment from approved vendors further enhances safety and quality within our system. Furthermore, as part of our broista onboarding process, new hires are taken through our “broista manifesto” which includes food safety training.
Our commitment strives to ensure all customers, crews, and communities are welcomed, honored, and loved. • Building Community Through Employee Resource Groups: Expanded and enriched Employee Resource Groups foster connection, belonging, and shared purpose among employees and allies.
Dutch Bros Inc. | Form 10-K | 11 Table of Contents • Building Community Through Employee Resource Groups: Expanded and enriched Employee Resource Groups foster connection, belonging, and shared purpose among employees and allies.
As of December 31, 2024, we had 982 shops, of which 670 were company-operated and 312 were franchise, across 18 states as shown in the graphic below.
As of December 31, 2025, we had 1,136 shops, of which 811 were company-operated and 325 were franchise, across 25 states as shown in the graphic below. For additional information regarding company-operated and franchise shops by state, refer to Part I, Item 2 Properties of this Form 10-K.
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We believe this business model places a premium on customer convenience without sacrificing the personal experience. Our shops and our real estate strategy are designed from the ground up to support this drive-thru centric business.
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We also offer a select variety of food options. _________________ 1 Based on percentage of total sales in 2025.
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We aim to capture beverage occasions that might be “lost” by potential customers who desire breakfast with their morning beverage and choose options other than Dutch Bros currently.
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Most of our shops feature either a single or double drive-thru window with multiple feeder lanes for traffic flow and a walk-up window.
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The quality assurance team inspects both Company-owned and franchise shops on a regular cadence. As part of our people-first culture, the health and safety of our customers and employees are our highest priority.
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In 2025, all new company-operated shops had tap machines installed, and we continue to test and explore additional solutions for retrofits and installations. As we scale, we remain committed to reducing our footprint related to beverage dispensing and continue to look for opportunities to mitigate our impact on the environment.
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As of December 31, 2024, we and our franchise partners have approximately 26,000 employees, of which approximately 18,000 employees are in our company-operated shops and headquarters.
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As part of our people-first culture, the health and safety of our customers and employees are our highest priority. Our commitment to beverage and food safety is strengthened through the direct relationships among our supply chain, culinary research and development, food safety, and operations teams.
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Every September, we dedicate a day to donate proceeds from every drink sold to nonprofit organizations helping create brighter futures for local kids. 2024 Donations $0.9 million $2.5 million More than $1.0 million In addition, during 2024, we donated our previous Grants Pass, Oregon headquarters building for development of a children’s learning center and recorded a net donation of $1.8 million.
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We strive to build meaningful relationships with our employees, who are key members of the communities we love and serve. We attract individuals who love growth, thrive in unique and fun environments, and radiate positivity.
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Ghosh has served as our President of Operations since April 2024, after a transitional period as Incoming President of Operations from January 2024 to March 2024. Mr. Ghosh served as Global VP of Nike Stores for NIKE, Inc. (NYSE: NKE), a multinational athletic, footwear, apparel, equipment, and services corporation, from November 2021 to December 2023.
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The Foundation is a not-for-profit organization founded by Dutch Bros that supports our philanthropic efforts, making impactful contributions to causes across the country.
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Prior to that, he served as Chief Operating Officer of Foxtrot Ventures Inc., a food and drink convenience store and delivery service, from December 2020 to September 2021.
Added
In September, we hosted a giveback day in support of local nonprofit organizations helping create brighter futures for local kids. 2025 Donations More than $1.0 million $1.0 million More than $1.2 million Additionally, our operators and franchise partners are empowered to host local, shop-specific giveback days throughout the year that help support and build relationships within the communities they serve.
Removed
He held various roles at Starbucks Corporation (Nasdaq: SBUX), a global coffee chain, from 2008 to December 2020, most recently as Senior Vice President of Siren Retail, Global Roastery and Reserve Stores from January 2019 to December 2020, and before that as Chief Executive Officer and Managing Director of TATA Starbucks Private Limited from January 2016 to January 2019. Mr.
Added
We believe our primary competitors include national and regional coffee chains, local specialty coffee shops, regional drive-thru beverage chains, and drive-thru quick service restaurants. Our competitors operate company-operated, franchised, and mixed business models. In addition, we also compete with convenience stores.
Removed
Ghosh serves on the Boards of Directors of the non-profit organizations India Initiative and New City Church. He holds a B.A. in Advertising from Michigan State University. Tana Davila, 42 Chief Marketing Officer Ms. Davila has served as our Chief Marketing Officer since June 2023.
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Ms. Tullett holds a J.D. from Lewis & Clark, Northwestern School of Law. Senior Leadership Team Along with our executive officers, other members of our senior leadership team include: Brian Cahoe Chief Development Officer Mr. Cahoe has served as our Chief Development Officer since February 2025.
Removed
In addition to her role at Dutch Bros, Ms. Tullett serves on the Board of Directors for Vancouver Symphony Orchestra. Ms. Tullett holds a J.D. from Lewis & Clark, Northwestern School of Law. Please refer to our website for a complete listing of our executive management team. Available Information Our website address is dutchbros.com.
Added
Responsible for overseeing the Company’s new shop growth and development strategy, he brings nearly 25 years of experience in the quick service restaurant industry. Prior to joining Dutch Bros, he most recently served as Chief Development Officer for KFC U.S. at Yum! Brands (NYSE: YUM).
Added
He holds a B.S. in Industrial Engineering from the University of Louisville, and an M.B.A. from Bellarmine University. Jess Elmquist Chief People Officer Mr. Elmquist has served as our Chief People Officer since January 2024. He has nearly 30 years of experience leading people in founder-led and high growth companies. Before joining the Company, Mr.
Added
Elmquist served as Chief Human Resources Officer and Chief Evangelist for Phenom, a global HR technology company. Mr. Elmquist also served in various leadership roles at Life Time, most recently as Chief Learning Officer, and EVP of Human Capital.
Added
He holds a B.A. in Education from Bethel University and an M.A. in Organizational Psychology and Change Leadership from Columbia University Venki Krishnababu Chief Technology and Information Officer Mr. Krishnababu has served as our Chief Technology and Information Officer since December 2024.
Added
He has nearly 30 years of experience leading transformational, enterprise-shaping tech strategies in the health care and global retail sectors. Before joining the Company, Mr. Krishnababu served seven years at lululemon athletica inc. (NASDAQ: LULU), most recently as Chief Technology Officer.
Added
Earlier in his career, he served as Chief Technology Officer at Premera Blue Cross and in various tech leadership roles at Nordstrom, Inc. He holds a Bachelor of Engineering from PSG College of Technology. Dutch Bros Inc. | Form 10-K | 16 Table of Contents Jennifer Somers Chief Shops Officer Ms.
Added
Somers has served as our Chief Shops Officer since January 2026. Before joining the Company, Ms. Somers served as Chief Operations Officer of Cava Group, Inc. (NYSE: CAVA), a fast-casual Mediterranean restaurant chain, from November 2021 to September 2025. Prior to that, she served in various roles at Taco Bell, under Yum! Brands, Inc.
Added
(NYSE: YUM), an operator and franchisor of fast-casual and quick-service restaurant chains, from November 2015 to November 2021, most recently as Senior Vice President of US Restaurant Operations from November 2020 to November 2021. Ms. Somers holds an M.B.A. from The Wharton School, University of Pennsylvania, and a B.S. in Operations Research & Industrial Engineering from Cornell University.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs our customer base continues to grow, we will need to expand our customer service and other personnel, which will require more complex management and systems. If we are not able to continue to provide high levels of customer service, our reputation, as well as our business could be harmed.
Biggest changeDutch Bros Inc. | Form 10-K | 30 Table of Contents In addition, as we expand our business, it is important that we continue to maintain a high level of customer service and satisfaction. As our customer base continues to grow, we will need to expand our customer service and other personnel, which will require more complex management and systems.
Consequently, our franchise partners may not successfully operate shops in a manner consistent with our standards and requirements, such as quality, service, and cleanliness, or may not hire and train qualified shop managers, broistas and other shop personnel or may not implement marketing programs and major initiatives such as shop remodels or equipment or technology upgrades, which may require financial investment.
Consequently, our franchise partners may not successfully operate shops in a manner consistent with our standards and requirements, such as quality, service, and cleanliness, may not hire and train qualified shop managers, broistas and other shop personnel, or may not implement marketing programs and major initiatives such as shop remodels or equipment or technology upgrades, which may require financial investment.
In addition, our effective tax rate in a given financial statement period may be materially impacted by a variety of factors including but not limited to changes in the mix and level of earnings, varying tax rates in the different jurisdictions in which we operate, fluctuations in the valuation allowance, or by changes to existing accounting rules or regulations.
In addition, our effective tax rate in a given financial statement period may be materially impacted by a variety of factors including but not limited to changes in the mix and level of earnings and the varying tax rates in the different jurisdictions in which we operate, fluctuations in the valuation allowance, or changes to existing accounting rules or regulations.
These laws also impose stricter requirements for processing certain personal information, including sensitive personal data, such as data protection impact assessments. These state laws allow for statutory fines for noncompliance.
Certain state laws also impose stricter requirements for processing certain personal information, including sensitive personal data, such as data protection impact assessments. These state laws allow for statutory fines for noncompliance.
The Exchange Tax Receivable Agreement provides for the payment by Dutch Bros Inc. to the Continuing Members of 85% of the benefits, if any, that Dutch Bros Inc. is deemed to realize (calculated using certain assumptions) as a result of (i) Dutch Bros Inc.’s allocable share of existing tax basis attributable to certain assets of Dutch Bros OpCo and its subsidiaries (including assets that will eventually be subject to depreciation or amortization once placed in service) at the time of any redemption or exchange of Dutch Bros OpCo Class A common units (including certain transactions in connection with the IPO) which tax basis is allocated to such redeemed or exchanged Dutch Bros OpCo Class A common units acquired by Dutch Bros Inc., (ii) adjustments that will increase the tax basis of the tangible and intangible assets of the Dutch Bros OpCo and its subsidiaries as a result of Dutch Bros Inc.’s taxable acquisition of Dutch Bros OpCo Class A common units from the Continuing Members in connection with the IPO and in connection with future redemptions or exchanges of Dutch Bros OpCo Class A common units for shares of Class A common stock (or a corresponding amount of cash), (iii) disproportionate allocations (if any) of tax benefits to Dutch Bros Inc. under Section 704(c) of the Internal Revenue Code of 1986, as amended (the Code), as a result of Dutch Bros Inc.’s earlier acquisition of other Dutch Bros OpCo Class A common units in connection with the IPO and (iv) certain other tax benefits, including tax benefits attributable to payments under the Exchange Tax Receivable Agreement.
The Exchange Tax Receivable Agreement provides for the payment by Dutch Bros Inc. to the Continuing Members of 85% of the benefits, if any, that Dutch Bros Inc. is deemed to realize (calculated using certain assumptions) as a result of (i) Dutch Bros Inc.’s allocable share of existing tax basis attributable to certain assets of Dutch Bros OpCo and its subsidiaries (including assets that will eventually be subject to depreciation or amortization once placed in service) at the time of any redemption or exchange of Dutch Bros OpCo Class A common units (including certain transactions in connection with the IPO) which tax basis is allocated to such redeemed or exchanged Dutch Bros OpCo Class A common units acquired by Dutch Bros Inc., (ii) adjustments that will increase the tax basis of the tangible and intangible assets of Dutch Bros OpCo and its subsidiaries as a result of Dutch Bros Inc.’s taxable acquisition of Dutch Bros OpCo Class A common units from the Continuing Members in connection with the IPO and in connection with future redemptions or exchanges of Dutch Bros OpCo Class A common units for shares of Class A common stock (or a corresponding amount of cash), (iii) disproportionate allocations (if any) of tax benefits to Dutch Bros Inc. under Section 704(c) of the Internal Revenue Code of 1986, as amended (the Code), as a result of Dutch Bros Inc.’s earlier acquisition of other Dutch Bros OpCo Class A common units in connection with the IPO and (iv) certain other tax benefits, including tax benefits attributable to payments under the Exchange Tax Receivable Agreement.
We cannot make any assurances regarding our ability to effectively respond to changes in customer health perceptions or our ability to successfully implement nutrient content disclosure requirements or other resulting regulations, including potential regulations around the use of certain ingredients or additives, or to adapt our menu offerings to trends in drinking and consumption habits.
We cannot make any assurances regarding our ability to effectively respond to changes in customer health perceptions or our ability to successfully implement nutrient content disclosure requirements or other resulting regulations, including potential regulations around the use of certain ingredients, dyes, or other additives, or to adapt our menu offerings to trends in drinking and consumption habits.
Dutch Bros Inc.’s accelerated payment obligations and/or assumptions adopted under the Tax Receivable Agreements in the case of a change of control may impair our ability to consummate a change of control transactions or negatively impact the value received by owners of our Class A common stock in a change of control transaction.
Dutch Bros Inc.’s accelerated payment obligations and/or assumptions adopted under the Tax Receivable Agreements in the case of a change of control may impair our ability to consummate a change of control transaction or negatively impact the value received by owners of our Class A common stock in a change of control transaction.
Our financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • changes in consumer tastes and nutritional and dietary trends; • successful identification and acquisition of appropriate sites to timely develop and expand our number of profitable shops; • protection of our brand and reputation; • dependence on a small number of suppliers, including for roasting; • expectations regarding our future operating and financial performance; • the size of our addressable markets, market share, and market trends; • effective management and continued growth of our workforce and operations; • our ability to attract, retain, and motivate skilled personnel, including key members of our senior management; • generation of projected same shop sales growth; • the sufficiency of our cash, cash equivalents, and investments to meet our liquidity needs; • dependence on long-term non-cancelable leases; • our employees and the status of our workers; • our inability to maintain good relationships with our franchising partners; • the timing and amount of deferred expenses related to the maintenance of company-operated shops; • the effects of seasonal trends on our results of operations; • our vulnerability to global financial market conditions, including the continuing effects from the recent recession; • adverse weather conditions in local or regional areas where our shops are located; and • our realization of any benefit from our organizational structure net of expenses associated with the same (including our obligations under the Tax Receivable Agreements).
Our financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • changes in consumer tastes and nutritional and dietary trends; • successful identification and acquisition of appropriate sites to timely develop and expand our number of profitable shops; • protection of our brand and reputation; • dependence on a small number of suppliers, including for co-packing, roasting, and consumer packaged goods; • expectations regarding our future operating and financial performance; • the size of our addressable markets, market share, and market trends; • effective management and continued growth of our workforce and operations; • our ability to attract, retain, and motivate skilled personnel, including key members of our senior management; • generation of projected same shop sales growth; • the sufficiency of our cash, cash equivalents, and investments to meet our liquidity needs; • dependence on long-term non-cancelable leases; • our employees and the status of our workers; • our inability to maintain good relationships with our franchising partners; • the timing and amount of deferred expenses related to the maintenance of company-operated shops; • the effects of seasonal trends on our results of operations; • our vulnerability to global financial market conditions, including the continuing effects from the recent recession; • adverse weather conditions in local or regional areas where our shops are located; and • our realization of any benefit from our organizational structure net of expenses associated with the same (including our obligations under the Tax Receivable Agreements).
Generally accepted accounting principles in the United States (GAAP) are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
The covenants under our 2022 Credit Facility restrict our ability, among other things, to: • incur additional debt; • grant liens on assets; • sell or dispose of assets; • merge with or acquire other companies, or make other investments; • enter into sale and leaseback transactions and swap agreements; • liquidate or dissolve ourselves; • engage in businesses that are not in a related line of business; or • pay dividends or make other distributions.
The covenants under our 2025 Credit Facility restrict our ability, among other things, to: • incur additional debt; • grant liens on assets; • sell or dispose of assets; • merge with or acquire other companies, or make other investments; • enter into sale and leaseback transactions and swap agreements; • liquidate or dissolve ourselves; • engage in businesses that are not in a related line of business; or • pay dividends or make other distributions.
Even with our own franchise partners, whose activities are monitored and regulated through our franchise agreements, we face risk that they may refer to or make statements about our Dutch Bros brand that do not make proper use of our trademarks or required designations, that improperly alter trademarks or branding, or that are critical of our brand or place our brand in a context that may tarnish our reputation.
Even with our own franchise partners, whose activities are, to some extent, monitored and regulated through our franchise agreements, we face risk that they may refer to or make statements about our Dutch Bros brand that do not make proper use of our trademarks or required designations, that improperly alter trademarks or branding, or that are critical of our brand or place our brand in a context that may tarnish our reputation.
In addition, our 2022 Credit Facility contains financial covenants that require us not to exceed a maximum net lease-adjusted total leverage ratio and maintain a minimum fixed charge coverage ratio. Our ability to comply with these financial covenants can be affected by events beyond our control, and we may not be able to satisfy them.
In addition, our 2025 Credit Facility contains financial covenants that require us not to exceed a maximum net lease-adjusted total leverage ratio and maintain a minimum fixed charge coverage ratio. Our ability to comply with these financial covenants can be affected by events beyond our control, and we may not be able to satisfy them.
In the event of such event of default under our 2022 Credit Facility, the applicable lenders could elect to terminate their commitments and declare all outstanding loans, together with accrued and unpaid interest and any fees and other obligations, to be due and payable, and/or exercise their rights and remedies under the loan documents governing our 2022 Credit Facility or any applicable law.
In the event of such event of default under our 2025 Credit Facility, the applicable lenders could elect to terminate their commitments and declare all outstanding loans, together with accrued and unpaid interest and any fees and other obligations, to be due and payable, and/or exercise their rights and remedies under the loan documents governing our 2025 Credit Facility or any applicable law.
In the event the applicable lenders accelerate the repayment of our loans, we and our subsidiaries may not have sufficient assets to repay such indebtedness. Any acceleration of amounts due under our 2022 Credit Facility or the exercise by the applicable lenders of their rights and remedies would likely have a material adverse effect on our business.
In the event the applicable lenders accelerate the repayment of our loans, we and our subsidiaries may not have sufficient assets to repay such indebtedness. Any acceleration of amounts due under our 2025 Credit Facility or the exercise by the applicable lenders of their rights and remedies would likely have a material adverse effect on our business.
Dutch Bros Inc. | Form 10-K | 43 Table of Contents In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal information privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
Dutch Bros Inc. | Form 10-K | 44 Table of Contents In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal information privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
The integrity and protection of that customer and employee data is critical to us. Dutch Bros Inc. | Form 10-K | 37 Table of Contents We are subject to rules governing electronic funds transfers, including the Payment Card Industry Data Security Standard (PCI DSS) as discussed further below.
The integrity and protection of that customer and employee data is critical to us. Dutch Bros Inc. | Form 10-K | 38 Table of Contents We are subject to rules governing electronic funds transfers, including the Payment Card Industry Data Security Standard (PCI DSS) as discussed further below.
Dutch Bros Inc. | Form 10-K | 40 Table of Contents Risks Related to Regulation and Litigation Changes in statutory, regulatory, accounting, and other legal requirements, including changes in accounting principles generally accepted in the United States, could potentially impact our operating and financial results. We are subject to numerous statutory, regulatory, and legal requirements.
Dutch Bros Inc. | Form 10-K | 41 Table of Contents Risks Related to Regulation and Litigation Changes in statutory, regulatory, accounting, and other legal requirements, including changes in accounting principles generally accepted in the United States, could potentially impact our operating and financial results. We are subject to numerous statutory, regulatory, and legal requirements.
Outcomes from these audits could have an adverse effect on our operating results and financial condition. Dutch Bros Inc. | Form 10-K | 41 Table of Contents We are subject to many federal, state, and local laws with which compliance is both costly and complex.
Outcomes from these audits could have an adverse effect on our operating results and financial condition. Dutch Bros Inc. | Form 10-K | 42 Table of Contents We are subject to many federal, state, and local laws with which compliance is both costly and complex.
We have no control over such trends, may not become timely aware of them, and may be unable to provide nutritional information for them. Such trends may also result in the mixture of ingredients in ways that could be perceived negatively, including with regard to health effects, and such perception could harm our business.
We have no control over such trends, may not become timely aware of them, and may be unable to provide nutritional information for them. Such trends may also result in a mixture of ingredients in ways that could be perceived negatively, including with regard to health effects, and such perception could harm our business.
For example, our 2022 Credit Facility generally requires that any cash distributions received by Dutch Bros Inc. that exceed its actual tax liability and operating expenses generally must be reinvested into Dutch Bros OpCo, which restricts our ability to distribute such cash to our stockholders or to retain such cash in Dutch Bros Inc. for other uses.
For example, our 2025 Credit Facility generally requires that any cash distributions received by Dutch Bros Inc. that exceed its actual tax liability and operating expenses generally must be reinvested into Dutch Bros OpCo, which restricts our ability to distribute such cash to our stockholders or to retain such cash in Dutch Bros Inc. for other uses.
Dutch Bros Inc. | Form 10-K | 55 Table of Contents We are a “controlled company” within the meaning of the New York Stock Exchange rules and, as a result, qualify for, and may rely on, exemptions and relief from certain corporate governance requirements.
Dutch Bros Inc. | Form 10-K | 57 Table of Contents We are a “controlled company” within the meaning of the New York Stock Exchange rules and, as a result, qualify for, and may rely on, exemptions and relief from certain corporate governance requirements.
Dutch Bros Inc. | Form 10-K | 39 Table of Contents We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business.
Dutch Bros Inc. | Form 10-K | 40 Table of Contents We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business.
We are vulnerable to interest rate risk with respect to our debt, and swap agreements entered into to manage such risk may not effectively limit our exposure. We are subject to interest rate risk in connection with our 2022 Credit Facility, which carries interest at a floating rate.
We are vulnerable to interest rate risk with respect to our debt, and swap agreements entered into to manage such risk may not effectively limit our exposure. We are subject to interest rate risk in connection with our 2025 Credit Facility, which carries interest at a floating rate.
We may, from time to time, be faced with negative publicity, including on social media, regardless of its accuracy, relating to: beverage quality; pricing; the safety, sanitation and welfare of our shops; customer complaints or litigation alleging illness or injury; health inspection scores; integrity of our or our suppliers’ or franchise partners’ food processing, employment practices, and other policies, practices, and procedures; or employee relationships and welfare; the appearance of our shops on third-party delivery platforms that may contain inaccurate menu pricing and extended delivery times; related parties, such as our Co-Founder, and their reputation, public perception, or actions, whether or not related to Dutch Bros; or other matters.
We may, from time to time, be faced with negative publicity, including on social media, regardless of its accuracy, relating to: beverage quality; pricing; the safety, sanitation and welfare of our shops; customer complaints or litigation alleging illness or injury; health inspection scores; integrity of our or our suppliers’ or franchise partners’ food processing, employment practices, and other policies, practices, and procedures; or employee relationships and welfare; the appearance of our shops on third-party delivery platforms that may contain inaccurate menu pricing and extended delivery times; partnerships with social media influencers to promote or market our products; related parties, such as our Co-Founder, and their reputation, public perception, or actions, whether or not related to Dutch Bros; or other matters.
Our ability to open new shops is dependent upon a number of factors, many of which are beyond our control, including our and our franchise partners’ ability to: • identify available and suitable sites, specifically for drive-thru locations; • compete for such sites; • reach acceptable agreements regarding the lease of locations; • obtain or have available the financing required to acquire and operate a shop, including construction and opening costs, which includes access to build-to-suit leases and ground lease construction arrangements; • respond to unforeseen engineering or environmental problems with leased premises; • avoid the impact of inclement weather, natural disasters, and other calamities; • hire, train, and retain the skilled management and other employees necessary to meet staffing needs; Dutch Bros Inc. | Form 10-K | 21 Table of Contents • obtain, in a timely manner and for an acceptable cost, required licenses, permits, and regulatory approvals and respond effectively to any changes in local, state, or federal law and regulations, such as regulatory bans on new drive-thru businesses, that adversely affect our and our franchise partners’ costs or ability to open new shops; and • control construction and equipment cost increases for new shops and secure the services of qualified contractors and subcontractors in an increasingly competitive environment.
Our ability to open new shops is dependent upon a number of factors, many of which are beyond our control, including our and our franchise partners’ ability to: • identify available and suitable sites, specifically for drive-thru locations; • compete for such sites; • reach acceptable agreements regarding the lease of locations; • obtain or have available the financing required to acquire and operate a shop, including construction and opening costs, which includes access to build-to-suit leases and ground lease construction arrangements; Dutch Bros Inc. | Form 10-K | 21 Table of Contents • establish and maintain relationships with necessary third parties, including developers, landlords, and construction companies; • respond to unforeseen engineering or environmental problems with leased premises; • avoid the impact of inclement weather, natural disasters, and other calamities; • hire, train, and retain the skilled management and other employees necessary to meet staffing needs; • obtain, in a timely manner and for an acceptable cost, required licenses, permits, and regulatory approvals and respond effectively to any changes in local, state, or federal law and regulations, such as regulatory bans on new drive-thru businesses, that adversely affect our and our franchise partners’ costs or ability to open new shops; and • control construction and equipment cost increases for new shops and secure the services of qualified contractors and subcontractors in an increasingly competitive environment.
Our ability to operate new shops profitably and increase average shop revenue and comparable shop sales will depend on many factors, some of which are beyond our control, including: • consumer awareness and understanding of the Dutch Bros brand; • general economic conditions, such as inflation, which can affect shop traffic, local labor costs, and prices we pay for the beverage and other supplies we use; • consumption patterns and beverage preferences that differ from region to region; • changes in consumer preferences and discretionary spending, which we have seen impacted recently by factors such as inflation; • difficulties obtaining or maintaining adequate relationships with distributors or suppliers in new markets; • increases or continued elevation in prices for commodities, including coffee, milk, and flavored syrups; • inefficiency in our labor costs as the staff gains experience; • competition, either from our competitors in the food service and restaurant industry or our own shops; • temporary and permanent site characteristics of new shops; • changes in government regulation; • our ability to hire, motivate, and retain qualified employees who share our values; • our ability to operate effectively, including timely open and meet demand due to scarcity of equipment or other materials; and • other unanticipated increases in costs, including costs of construction materials and trade labor, any of which could give rise to delays or cost overruns.
Our ability to operate new shops profitably and increase average shop revenue and comparable shop sales will depend on many factors, some of which are beyond our control, including: • consumer awareness and understanding of the Dutch Bros brand; • general economic conditions, such as inflation, which can affect shop traffic, local labor costs, and prices we pay for the beverage and other supplies we use; • consumption patterns and beverage preferences that differ from region to region; • changes in consumer preferences and discretionary spending, which we have seen impacted recently by factors such as inflation and other macroeconomic pressures on consumers; • difficulties obtaining or maintaining adequate relationships with distributors or suppliers in new markets; • increases or continued elevation in prices for commodities, including coffee, milk, and flavored syrups, including due to announced tariffs whether or not such tariffs are ultimately enacted; • inefficiency in our labor costs as the staff gains experience; • competition, either from our competitors in the food service and restaurant industry or our own shops; • temporary and permanent site characteristics of new shops; • changes in government regulation; • our ability to hire, motivate, and retain qualified employees who share our values; • our ability to operate effectively, including timely open and meet demand due to scarcity of equipment or other materials; and • other unanticipated increases in costs, including costs of construction materials and trade labor, any of which could give rise to delays or cost overruns.
For example, in 2022 our roasting facility was temporarily under a “Level 1 - Be Ready” evacuation alert due to the Rum Creek Fire. Future wildfires may result in actual evacuations and closures, which would disrupt our operations and may harm our business.
For example, in 2022 our roasting facility in Grants Pass, OR was temporarily under a “Level 1 - Be Ready” evacuation alert due to the Rum Creek Fire. Future wildfires may result in actual evacuations and closures, which would disrupt our operations and may harm our business.
Our debt could have important consequences to you, including the following: • it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt, resulting in possible defaults on and acceleration of such indebtedness; • we may need to issue additional Class A common stock to fund the repayment of our debt, which would result in additional dilution to existing investors and may cause our stock price to decline; • our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, or other general corporate purposes may be impaired; • a substantial portion of cash flow from operations may be dedicated to the payment of principal and interest on our debt, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities, acquisitions, and other general corporate purposes; • we are more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited; • our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our level of debt; and • our ability to borrow additional funds or to refinance debt may be limited.
Our debt could have important consequences to you, including the following: • it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt, resulting in possible defaults on and acceleration of such indebtedness; • we may need to issue additional Class A common stock to fund the repayment of our debt, which would result in additional dilution to existing investors and may cause our stock price to decline; Dutch Bros Inc. | Form 10-K | 59 Table of Contents • our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, or other general corporate purposes may be impaired; • a substantial portion of cash flow from operations may be dedicated to the payment of principal and interest on our debt, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities, acquisitions, and other general corporate purposes; • we are more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited; • our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our level of debt; and • our ability to borrow additional funds or to refinance debt may be limited.
Our financial results could be adversely affected by a shift in consumer spending away from outside-the-home beverages, decreases in general discretionary consumer spending (including due to higher gas prices, inflation or lack of consumer confidence), lack of customer acceptance of new products (including due to price increases necessary to cover the costs of new beverages or higher input costs), brand perception (such as the existence or expansion of our competitors), platforms (such as features of our mobile application and changes in our loyalty rewards programs and initiatives), a reduction in individual vehicle ownership, which in turn may reduce the usefulness and convenience of our drive-thru shops, or customers reducing their demand for our current offerings as new beverages are introduced.
Our financial results could be adversely affected by a shift in consumer spending away from outside-the-home beverages, decreases in general discretionary consumer spending (including due to higher gas prices, inflation or lack of consumer confidence), lack of customer acceptance of new products including new drink offerings, hot food, and consumer packaged goods (including due to price increases necessary to cover the costs of new products or higher input costs), brand perception (such as the existence or expansion of our competitors), platforms (such as features of our mobile app and changes in our loyalty rewards programs and initiatives), a reduction in individual vehicle ownership, which in turn may reduce the usefulness and convenience of our drive-thru shops, or customers reducing their demand for our current offerings as new products, including new drink offerings, hot food, and consumer packaged goods, are introduced.
For example, in each of February, March, and June 2024, we facilitated a registered underwritten public offering of shares of our Class A common stock by our Sponsor.
For example, in each of February, March, and June 2024, we facilitated registered underwritten public offerings of shares of our Class A common stock by our Sponsor.
Experimentation with and implementation of innovations in products and technologies may result in inefficiencies, such as a slowdown in our shop operations and traffic flow, disruption of workflows, technical glitches, disruption of current systems and technology, and negative customer experiences.
Experimentation with and implementation of innovations in products and technologies, including hot food, may result in inefficiencies, such as a slowdown in our shop operations and traffic flow, disruption of workflows, technical glitches, disruption of current systems and technology, and negative customer experiences.
Our charter documents also contain other provisions that could have an anti-takeover effect, such as: • permitting the board of directors to establish the number of directors and fill any vacancies and newly created directorships; Dutch Bros Inc. | Form 10-K | 63 Table of Contents • providing that directors may only be removed pursuant to the provisions of Section 141(k) of the Delaware General Corporation Law; • prohibiting cumulative voting for directors; • requiring super-majority voting to amend some provisions in our amended and restated bylaws; • authorizing the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • eliminating the ability of stockholders to call special meetings of stockholders; and • our multi-class common stock structure as described above.
Our charter documents also contain other provisions that could have an anti-takeover effect, such as: • permitting the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • providing that directors may only be removed pursuant to the provisions of Section 141(k) of the Delaware General Corporation Law; • prohibiting cumulative voting for directors; • requiring super-majority voting to amend some provisions in our amended and restated bylaws; • authorizing the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • eliminating the ability of stockholders to call special meetings of stockholders; and • our multi-class common stock structure as described above.
If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.
If the current equity and credit markets continue to deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative claim or cause of action brought on our behalf; Dutch Bros Inc. | Form 10-K | 62 Table of Contents • any claim or cause of action for a breach of fiduciary duty owed by any of our current or former directors, officers, or other employees to us or our stockholders; • any claim or cause of action against us or any of our current or former directors, officers, or other employees arising out of or pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws (as each may be amended from time to time); • any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws (as each may be amended from time to time, including any right, obligation, or remedy thereunder); • any claim or cause of action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and • any claim or cause of action against us or any of our current or former directors, officers, or other employees governed by the internal affairs doctrine.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative claim or cause of action brought on our behalf; • any claim or cause of action for a breach of fiduciary duty owed by any of our current or former directors, officers, or other employees to us or our stockholders; • any claim or cause of action against us or any of our current or former directors, officers, or other employees arising out of or pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws (as each may be amended from time to time); • any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws (as each may be amended from time to time, including any right, obligation, or remedy thereunder); • any claim or cause of action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and • any claim or cause of action against us or any of our current or former directors, officers, or other employees governed by the internal affairs doctrine.
We may not be successful in introducing new products or new features to our mobile application that are adopted by our customers.
We may not be successful in introducing new products or new features to our mobile app that are adopted by our customers.
Furthermore, all of our debt under our 2022 Credit Facility bears interest at variable rates, which may increase from time to time.
Furthermore, all of our debt under our 2025 Credit Facility bears interest at variable rates, which may increase from time to time.
Additionally, if we fail to comply with laws and regulations, publicly take controversial positions or actions or fail to deliver a consistently positive consumer experience in each of our markets, including by failing to invest in the right balance of wages and benefits to attract and retain employees that represent the brand well or foster an inclusive and diverse environment, our brand value may be diminished.
Additionally, if we fail to comply with laws and regulations, publicly take controversial positions or actions or fail to deliver a consistently positive consumer experience in each of our markets, including by failing to invest in the right balance of wages and benefits to attract and retain employees that represent the brand well, our brand value may be diminished.
Factors that could cause fluctuations in the trading price of our Class A common stock include the risk factors set forth in this section as well as the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of competitors’ stocks; • changes in operating performance and stock market valuations of other companies generally, or those in our industry in particular; • sales of shares of our Class A common stock by us or our stockholders, including the Continuing Members; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • changes in our financial, operating or other metrics, regardless of whether we consider those metrics as reflective of the current state or long-term prospects of our business, and how those results compare to securities analyst expectations, including whether those results fail to meet, exceed or significantly exceed securities analyst expectations, particularly in light of the significant portion of our revenue derived from a limited number of customers; • announcements by us or our competitors of new products or services; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or data security incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, franchises or other assets by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management; and • general political and economic conditions and slow or negative growth of our markets.
Factors that could cause fluctuations in the trading price of our Class A common stock include the risk factors set forth in this section as well as the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of competitors’ stocks; • changes in operating performance and stock market valuations of other companies generally, or those in our industry in particular; • sales of shares of our Class A common stock by us or our stockholders, including the Continuing Members; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • changes in our financial, operating or other metrics, regardless of whether we consider those metrics as reflective of the current state or long-term prospects of our business, and how those results compare to securities analyst expectations, including whether those results fail to meet, exceed or significantly exceed securities analyst expectations; • announcements by us or our competitors of new products or services; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; Dutch Bros Inc. | Form 10-K | 55 Table of Contents • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or data security incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, franchises or other assets by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management; and • general political and economic conditions and slow or negative growth of our markets.
We may be unable to identify all potential allergens present in our products at the time of purchase, whether they may have been introduced by us or by our third party vendors.
We may be unable to identify all potential allergens present in our products at the time of purchase, whether they were introduced by us or by our third party vendors.
Dutch Bros Inc. | Form 10-K | 31 Table of Contents The risk of unauthorized circumvention of our security measures or those of the third parties with whom we work has been heightened by advances in computer and software capabilities and the increasing sophistication of actors who employ complex techniques, including, without limitation, “phishing” or social engineering incidents (including deep fakes, which are becoming increasingly difficult to detect), ransomware, extortion, account takeover attacks, personnel misconduct or error, denial or degradation of service attacks, malicious code (such as viruses or worms), supply-chain attacks, software bugs, adware, attacks enhanced or facilitated by AI, or malware and other similar threats.
The risk of unauthorized circumvention of our security measures or those of the third parties with whom we work has been heightened by advances in computer and software capabilities and the increasing sophistication of actors who employ complex techniques, including, without limitation, “phishing” or social engineering incidents (including deep fakes, which are becoming increasingly difficult to detect), ransomware, extortion, account takeover attacks, personnel misconduct or error, denial or degradation of service attacks, malicious code (such as viruses or worms), supply-chain attacks, software bugs, adware, attacks enhanced or facilitated by AI, or malware and other similar threats.
If our company-operated and franchised shops cannot compete successfully with other beverage and coffee shops, including Dunkin’, CosMc’s, Starbucks, other specialty coffee shops, drive-thru QSRs, and the growing number of coffee delivery options in new and existing markets, we could lose customers and our revenue could decline.
If our company-operated and franchised shops cannot compete successfully with other beverage and coffee shops, other specialty coffee shops, drive-thru QSRs, and the growing number of coffee delivery options in new and existing markets, we could lose customers and our revenue could decline.
For example, Continuing Members could disproportionately benefit in instances where they have received a tax distribution from Dutch Bros OpCo and subsequently redeem or exchange Dutch Bros OpCo Class A common units for shares of Class A common stock on a one-to-one basis when the value of the Class A common stock is increased relative to the Dutch Bros OpCo Class A common units as a result of Dutch Bros Inc. retaining any cash distribution from Dutch Bros OpCo in excess of Dutch Bros Inc.’s liabilities.
For example, Continuing Members could disproportionately benefit in instances where they have received a tax distribution from Dutch Bros OpCo and subsequently redeem or exchange Dutch Bros OpCo Class A common units for shares of Class A common stock on a one-to-one basis when the value of the Class A Dutch Bros Inc. | Form 10-K | 51 Table of Contents common stock is increased relative to the Dutch Bros OpCo Class A common units as a result of Dutch Bros Inc. retaining any cash distribution from Dutch Bros OpCo in excess of Dutch Bros Inc.’s liabilities.
Any one or more of the factors listed below or described elsewhere in this section could harm our business: • increases in real estate or labor costs in certain markets, which we have recently experienced; • changes in consumer preferences; • disruptions in our supply chain; • the impact of shortages or inflation on our cost of goods or labor, including construction supplies and labor, which we have recently seen; • changes in governmental laws and rules, including those regarding minimum wage, and approaches to taxation; • severe weather or other natural or man-made disasters affecting a large market or several closely located markets that may temporarily but significantly affect our business in such markets, including the price or availability of goods; • labor discord or disruption, geopolitical events, social unrest, war, including repercussions of the war between Russia and Ukraine or the war between Israel and Hamas and the related risk of larger regional conflicts, terrorism, political instability or uncertainty, acts of public violence, boycotts, hostilities and social unrest, or resurgence of or new epidemics; and • adverse outcomes of litigation.
Any one or more of the factors listed below or described elsewhere in this section could harm our business: • increases in real estate or labor costs in certain markets, which we have recently experienced; • changes in consumer preferences; • disruptions in our supply chain; • the impact of shortages or inflation on our cost of goods or labor, including commodity costs such as coffee, and construction supplies and labor, which we have recently seen; • changes in governmental laws and rules, including those regarding minimum wage, and approaches to taxation and tariffs; • severe weather or other natural or man-made disasters affecting a large market or several closely located markets that may temporarily but significantly affect our business in such markets, including the price or availability of goods; • labor discord or disruption, geopolitical events, social unrest, war, regional conflicts, acts of terrorism, political instability or uncertainty, acts of public violence, boycotts, hostilities and social unrest, or resurgence of or new epidemics; and • adverse outcomes of litigation.
For example, the reputation of our Dutch Bros brand could be damaged by claims or perceptions about the quality or safety of our ingredients or beverages or the quality or reputation of our suppliers, distributors, or franchise partners or by claims or perceptions that we, our franchise partners, or other business partners have acted or are acting in an unethical, illegal, racially-biased, or socially irresponsible manner or are not fostering an inclusive and diverse environment, regardless of whether such claims or perceptions are substantiated.
For example, the reputation of our Dutch Bros brand could be damaged by claims or perceptions about the quality or safety of our ingredients or beverages or the quality or reputation of our suppliers, distributors, or franchise partners or by claims or perceptions that we, our franchise partners, or other business partners have acted or are acting in an unethical, illegal, racially-biased, or socially irresponsible manner, regardless of whether such claims or perceptions are substantiated.
The OpCo LLC Agreement generally requires Dutch Bros OpCo to make pro rata cash distributions to the holders of Dutch Bros OpCo Class A common units, including Dutch Bros Inc., in amounts sufficient to (i) fund each holder’s tax obligations in respect of allocations of taxable income from Dutch Bros OpCo and (ii) cover Dutch Bros Inc.’s operating expenses, including payments under the Tax Receivable Agreements.
Dutch Bros Inc. | Form 10-K | 50 Table of Contents The OpCo LLC Agreement generally requires Dutch Bros OpCo to make pro rata cash distributions to the holders of Dutch Bros OpCo Class A common units, including Dutch Bros Inc., in amounts sufficient to (i) fund each holder’s tax obligations in respect of allocations of taxable income from Dutch Bros OpCo and (ii) cover Dutch Bros Inc.’s operating expenses, including payments under the Tax Receivable Agreements.
In addition, subject to certain restrictions under the 2022 Credit Facility, we may incur additional debt.
In addition, subject to certain restrictions under the 2025 Credit Facility, we may incur additional debt.
The imposition of menu-labeling laws and such other regulations could have an adverse effect on our results of operations and financial position, as well as the food service and restaurant industry in general.
The imposition of menu-labeling laws, additional restrictions on certain food additives, and such other regulations could have an adverse effect on our results of operations and financial position, as well as the food service and restaurant industry in general.
As of December 31, 2024, approximately 32% of our shops were operated by Dutch Bros’ franchise partners and, because of this, we depend on the financial success and cooperation of our franchise partners for our success.
As of December 31, 2025, approximately 29% of our shops were operated by Dutch Bros’ franchise partners and, because of this, we depend on the financial success and cooperation of our franchise partners for our success.
Accordingly, it is possible that the actual cash tax benefits realized by Dutch Bros Inc. may be significantly less than the corresponding Tax Receivable Agreement payments or that payments under the Tax Receivable Agreements may be made years in advance of the actual realization, if any, of the anticipated future tax benefits.
Dutch Bros Inc. | Form 10-K | 53 Table of Contents Accordingly, it is possible that the actual cash tax benefits realized by Dutch Bros Inc. may be significantly less than the corresponding Tax Receivable Agreement payments or that payments under the Tax Receivable Agreements may be made years in advance of the actual realization, if any, of the anticipated future tax benefits.
In addition, our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.
In addition, our amended Dutch Bros Inc. | Form 10-K | 64 Table of Contents and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.
Actual tax benefits realized by Dutch Bros Inc. may differ from tax benefits calculated under the Tax Receivable Agreements as a result of the use of certain assumptions in the Tax Receivable Agreements, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits.
Actual tax benefits realized by Dutch Bros Inc. may differ from tax benefits calculated under the Tax Receivable Dutch Bros Inc. | Form 10-K | 52 Table of Contents Agreements as a result of the use of certain assumptions in the Tax Receivable Agreements, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits.
You do not have the same protections afforded to stockholders of companies that are subject to such requirements. As of December 31, 2024, our Co-Founder beneficially owned approximately 74.8% of the combined voting power of our Class A common stock, Class B common stock, and Class C common stock.
You do not have the same protections afforded to stockholders of companies that are subject to such requirements. As of December 31, 2025, our Co-Founder beneficially owned approximately 73.1% of the combined voting power of our Class A common stock, Class B common stock, and Class C common stock.
Government regulation and customer consumption habits may impact our business as a result of changes in attitudes regarding diet and health (including use of weight-loss or appetite-suppressing drugs) or new information regarding the health effects of consuming our menu offerings.
Government regulation and customer consumption habits may impact our business as a result of changes in attitudes regarding diet and health (including use of weight-loss or appetite-suppressing drugs such as those commonly known as GLP-1s) or new information regarding the health effects of consuming our menu offerings.
As of December 31, 2024, our Co-Founder beneficially owned approximately 74.8% of the combined voting power of our Class A common stock, Class B common stock, and Class C common stock (since June 2024, no shares of Class D common stock were outstanding).
As of December 31, 2025, our Co-Founder beneficially owned approximately 73.1% of the combined voting power of our Class A common stock, Class B common stock, and Class C common stock (since June 2024, no shares of Class D common stock were outstanding).
One of the key means to achieving our growth strategy will be through opening new shops and operating those shops on a profitable basis. During the year ended December 31, 2024, we opened 128 new company-operated shops, across 15 states.
One of the key means to achieving our growth strategy will be through opening new shops and operating those shops on a profitable basis. During the year ended December 31, 2025, we opened 141 new company-operated shops, across 19 states.
Additionally, we may face challenges of integrating, developing, training, and motivating a rapidly growing employee base in our various shops and maintaining our company culture across multiple offices and shops. In 2024, we shifted approximately 40% of our total support staff to our Phoenix, Arizona office.
Additionally, we may face challenges of integrating, developing, training, and motivating a rapidly growing employee base in our various shops and maintaining our company culture across multiple offices and shops. In 2024 and 2025, we shifted a majority of our total support staff to our Phoenix, Arizona headquarters.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibit a person who owns 15% or more of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Dutch Bros Inc. | Form 10-K | 65 Table of Contents Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibit a person who owns 15% or more of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Dutch Bros Inc. | Form 10-K | 52 Table of Contents In particular, following the issuance of shares of Class A common stock in connection with the redemption or exchange of Dutch Bros OpCo Class A common units from our Continuing Members (together with the cancellation of any shares of our Class B common stock or Class C common stock paired with such units), such shares of Class A common stock will have the same economic rights as other shares of Class A common stock.
In particular, following the issuance of shares of Class A common stock in connection with the redemption or exchange of Dutch Bros OpCo Class A common units from our Continuing Members (together with the cancellation of any shares of our Class B common stock or Class C common stock paired with such units), such shares of Class A common stock will have the same economic rights as other shares of Class A common stock.
If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
If regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
It is possible that our Co-Founder’s interests may not align with the interests of our other stockholders. Our Co-Founder owned approximately 32.9% of the Dutch Bros OpCo Class A common units as of December 31, 2024.
It is possible that our Co-Founder’s interests may not align with the interests of our other stockholders. Our Co-Founder owned approximately 27.1% of the Dutch Bros OpCo Class A common units as of December 31, 2025.
Dutch Bros Inc. | Form 10-K | 48 Table of Contents Dutch Bros OpCo may make distributions of cash to Dutch Bros Inc. in excess of the amounts used by Dutch Bros Inc. to make distributions to its stockholders and pay its expenses (including taxes and payments under the Tax Receivable Agreements).
Dutch Bros OpCo may make distributions of cash to Dutch Bros Inc. in excess of the amounts used by Dutch Bros Inc. to make distributions to its stockholders and pay its expenses (including taxes and payments under the Tax Receivable Agreements).
Sanctions imposed by the United States and other countries in response to such conflicts, including the war in Ukraine, may also continue to adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
Sanctions imposed, and other actions taken, by the United States and other countries in response to geopolitical conflicts may also continue to adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
The risk of negative publicity is particularly great with respect to our franchise partner shops because we are limited in the manner in which we can regulate them, especially on a real-time basis, and negative publicity from our franchise partners’ shops may also significantly impact company- Dutch Bros Inc. | Form 10-K | 24 Table of Contents operated shops.
The risk of negative publicity is particularly great with respect to our franchise partner shops because we are limited in the manner in which we can regulate them, especially on a real-time basis, and negative publicity from our franchise partners’ shops may also significantly impact company-operated shops.
While we have implemented security measures designed to protect against security incidents, our security measures (and those of the third parties with whom we work) may not be adequate to prevent or detect service interruption, system failure data loss, fraud or theft, or other material adverse consequences.
Dutch Bros Inc. | Form 10-K | 32 Table of Contents While we have implemented security measures designed to protect against security incidents, our security measures (and those of the third parties with whom we work) may not be adequate to prevent or detect service interruption, system failure data loss, fraud or theft, or other material adverse consequences.
Dutch Bros Inc. | Form 10-K | 50 Table of Contents Payments under the Tax Receivable Agreements will be based on the tax reporting positions that we determine, and the Internal Revenue Service (IRS) or another tax authority may challenge all or part of the tax basis increases, as well as other related tax positions we take, and a court could sustain such challenge.
Payments under the Tax Receivable Agreements will be based on the tax reporting positions that we determine, and the Internal Revenue Service (IRS) or another tax authority may challenge all or part of the tax basis increases, as well as other related tax positions we take, and a court could sustain such challenge.
This concentrated control will limit or preclude the ability of holders of Class A common stock to influence corporate matters for the foreseeable future. Dutch Bros Inc. | Form 10-K | 54 Table of Contents As a public company utilizing a multi-class capital structure, FTSE Russell and Standard & Poor’s will not include our stock in their indices.
This concentrated control will limit or preclude the ability of holders of Class A common stock to influence corporate matters for the foreseeable future. As a public company utilizing a multi-class capital structure, FTSE Russell and Standard & Poor’s will not include our stock in their indices.
The global credit and financial markets have experienced extreme volatility and disruptions (including as a result of the COVID-19 pandemic and actual or perceived changes in interest rates, continued economic inflation, and failures of financial institutions), which has included severely diminished liquidity and credit availability, declines in consumer confidence, prolonged weak consumer demand, a decrease in consumer discretionary spending, declines in economic growth, high inflation, uncertainty about economic stability, and increases in unemployment rates.
The global credit and financial markets have experienced extreme volatility and disruptions (including as a result of tariffs, recession concerns, actual or perceived changes in interest rates, and continued economic inflation), which has included severely diminished liquidity and credit availability, declines in consumer confidence, prolonged weak consumer demand, a decrease in consumer discretionary spending, slower economic growth, high inflation, uncertainty about economic stability, and swings in unemployment rates.
For example, in 2022, we believe fluctuating increases in gas prices negatively impacted consumer discretionary spending, particularly in the Western United States where such increases were relatively higher and where our shops are geographically concentrated. Dutch Bros Inc. | Form 10-K | 29 Table of Contents If we fail to offer high-quality customer experience, our business and reputation will suffer.
For example, in 2022, we believe fluctuating increases in gas prices negatively impacted consumer discretionary spending, particularly in the Western United States where such increases were relatively higher and where our shops are geographically concentrated. If we fail to offer high-quality customer experience, our business and reputation will suffer.
Business incidents, whether isolated or recurring and whether originating from us or our business partners, that erode consumer trust can significantly reduce brand value, potentially trigger boycotts of our shops, or result in civil or criminal liability and can have a negative impact on our financial results.
Dutch Bros Inc. | Form 10-K | 35 Table of Contents Business incidents, whether isolated or recurring and whether originating from us or our business partners, that erode consumer trust can significantly reduce brand value, potentially trigger boycotts of our shops, or result in civil or criminal liability and can have a negative impact on our financial results.
In recent years, beverage and restaurant companies have also been subject to lawsuits, including class action lawsuits, alleging violations of federal and state laws regarding workplace and employment matters, discrimination, and similar matters. A number of these lawsuits have resulted in the payment of substantial damages by the defendants.
In recent years, beverage Dutch Bros Inc. | Form 10-K | 47 Table of Contents and restaurant companies have also been subject to lawsuits, including class action lawsuits, alleging violations of federal and state laws regarding workplace and employment matters, discrimination, and similar matters. A number of these lawsuits have resulted in the payment of substantial damages by the defendants.
If we were required to register as an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
If we were required to register as an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could Dutch Bros Inc. | Form 10-K | 54 Table of Contents make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
Dutch Bros Inc. | Form 10-K | 33 Table of Contents Our operations have been, and may continue to be, disrupted when employees or employees of our franchise partners are suspected of having a communicable disease or other illnesses since this requires us or our franchise partners to quarantine some or all such employees and close and disinfect our impacted shops.
Our operations have been, and may continue to be, disrupted when employees or employees of our franchise partners are suspected of having a communicable disease or other illnesses since this requires us or our franchise partners to quarantine some or all such employees and close and disinfect our impacted shops.
The difference in voting rights could adversely affect the value of our Class A common stock by, for example, delaying or deferring a change of control or if investors view, or any potential future purchaser of our company views, the superior voting rights of the Class B common stock to have value.
Dutch Bros Inc. | Form 10-K | 56 Table of Contents The difference in voting rights could adversely affect the value of our Class A common stock by, for example, delaying or deferring a change of control or if investors view, or any potential future purchaser of our company views, the superior voting rights of the Class B common stock to have value.
This risk may increase as we enter new markets with localized competitors. In the event that these or other intellectual property rights are successfully challenged, we could experience brand dilution or be forced to rebrand our products, which would result in loss of brand recognition and would require us to devote resources to advertising and marketing new brands.
In the event that these or other intellectual property rights are successfully challenged, we could experience brand dilution or be forced to rebrand our products, which would result in loss of brand recognition and would require us to devote resources to advertising and marketing new brands.
For example, we have been the target of unsuccessful phishing attempts in the past, and expect such attempts will continue in the future. Dutch Bros Inc. | Form 10-K | 32 Table of Contents We may expend significant resources or modify our business activities to try to protect against such security incidents and/or fraud.
For example, we have been the target of unsuccessful phishing attempts in the past, and expect such attempts will continue in the future. We may expend significant resources or modify our business activities to try to protect against such security incidents and/or fraud.
If these measures do not succeed in reducing fraud, our business, results of operations, and financial condition would be materially and adversely affected. Dutch Bros Inc. | Form 10-K | 38 Table of Contents Risks Related to People and Culture Changes in the availability of and the cost of labor could harm our business.
If these measures do not succeed in reducing fraud, our business, results of operations, and financial condition would be materially and adversely affected. Risks Related to People and Culture Changes in the availability of and the cost of labor could harm our business.
Dutch Bros Inc. | Form 10-K | 25 Table of Contents We are subject to the risks associated with leasing space subject to long-term non-cancelable leases and, with respect to the real property that we own, owning real estate. Our leases generally have initial terms of 15 years with renewal options.
We are subject to the risks associated with leasing space subject to long-term non-cancelable leases and, with respect to the real property that we own, owning real estate. Our leases generally have initial terms of 15 years with renewal options.
This may result in dilution of, or harm to, our intellectual property or the value of our brand. Dutch Bros Inc. | Form 10-K | 36 Table of Contents We may also from time to time be required to institute enforcement action, including litigation, to enforce and preserve the value of our trademarks, service marks and other intellectual property.
This may result in dilution of, or harm to, our intellectual property or the value of our brand. We may also from time to time be required to institute enforcement action, including litigation, to enforce and preserve the value of our trademarks, service marks and other intellectual property.
If we issue a significant amount of equity securities in connection with future acquisitions or partnerships, existing stockholders’ ownership would be diluted. Dutch Bros Inc. | Form 10-K | 61 Table of Contents We may need additional capital, and we cannot be sure that additional financing will be available.
If we issue a significant amount of equity securities in connection with future acquisitions or partnerships, existing stockholders’ ownership would be diluted. We may need additional capital, and we cannot be sure that additional financing will be available.
Dutch Bros Inc. | Form 10-K | 46 Table of Contents Legislation and regulations requiring the display and provision of nutritional information for our menu offerings, and new information, attitudes, or regulations regarding diet and health or adverse opinions about the health effects of consuming our menu offerings, could affect consumer preferences and negatively impact our business, financial condition, and results of operations.
Legislation and regulations requiring the display and provision of nutritional information for our menu offerings, and new information, attitudes, or regulations regarding additives, diet and health or adverse opinions about the health effects of consuming our menu offerings, could affect consumer preferences and negatively impact our business, financial condition, and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDutch Bros Inc. | Form 10-K | 65 Table of Contents Risks from cybersecurity threats are among those that we address in the Company’s general risk management program. As part of our overall risk management processes, the Company maintains various policies related to information security, including, for example, an Incident Response Policy and a Cybersecurity Incident Reporting Policy.
Biggest changeFor example, the Company maintains various policies and procedures related to information security, including, for example, an Incident Response Policy and a Cybersecurity Incident Reporting Policy and an AI working group that analyzes the potential risks in connection with the Company’s use of generative AI technologies and/or automated decision-making tools.
Our information technology team is responsible for identifying, assessing, and managing the Company’s cybersecurity threats and risks under the oversight of our Chief Technology and Information Officer. This team works with third parties from time to time to help identify, assess, and manage cybersecurity risks, including professional services firms and other vendors.
Our information technology team is responsible for identifying, assessing, and managing the Company’s cybersecurity threats and risks under the oversight of our Chief Information Security Officer. This team works with third parties from time to time to help identify, assess, and manage cybersecurity risks, including professional services firms and other vendors.
Our Chief Technology and Information Officer and his team are responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Our Chief Information Security Officer and his team are responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, for certain service providers, our vendor management process includes reviewing the cybersecurity practices of certain providers, contractually imposing obligations on certain providers related to the services they provide and/or the information they process, conducting security vulnerability assessments, requiring providers to complete written questionnaires regarding their services and data handling practices, conducting periodic re-assessments during their engagement, using a third party vendor management security company to provide certain ongoing monitoring, or annually collecting certain information security-related compliance documentation and reports.
Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, for certain service providers, our vendor management process includes reviewing the cybersecurity practices of certain providers, contractually imposing obligations on certain providers related to the services they provide and/or the information they process, conducting Dutch Bros Inc. | Form 10-K | 67 Table of Contents security vulnerability assessments, requiring providers to complete written questionnaires regarding their services and data handling practices, conducting periodic re-assessments during their engagement, using a third party vendor management security company to provide certain ongoing monitoring, or annually collecting certain information security-related compliance documentation and reports.
Under our Cybersecurity Incident Reporting Policy, the Chief Legal Officer is also responsible for communicating to the Audit and Risk Committee the activities of the Company related to the assessments and reporting of potentially significant cybersecurity incidents.
Under our Cybersecurity Incident Reporting Policy, the Chief Legal Officer is also responsible for communicating to the Audit and Risk Committee the activities of the Company related to the assessments and reporting of potentially significant cybersecurity incidents. Dutch Bros Inc. | Form 10-K | 69 Table of Contents
Dutch Bros Inc. | Form 10-K | 66 Table of Contents Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including reporting certain incidents to a cross-functional group responsible for making ongoing assessments of reported incidents.
Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including reporting certain incidents to a cross-functional group responsible for making ongoing assessments of reported incidents. This group is led by our Chief Legal Officer and Chief Information Security Officer, and includes members of our standing Disclosure Committee.
(NASDAQ: LULU), and prior to that as Chief Technology Officer at Premera Blue Cross. Our Chief Technology and Information Officer is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Dutch Bros Inc. | Form 10-K | 68 Table of Contents Our Chief Information Security Officer is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Chief Technology and Information Officer, Venki Krishnababu, who has over 30 years of experience in the information technology field. Prior to serving the Company, Mr. Krishnababu served in various information technology roles, most recently as Chief Technology Officer, at lululemon athletica inc.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Chief Information Security Officer, who has over 20 years of experience designing, building, and executing teams and programs in the cybersecurity field, in both leadership and hands-on technical positions across numerous industries including retail, software and technology, medical device manufacturing, and cyber advisory and audit services.
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This group is led by our Chief Legal Officer and Chief Technology and Information Officer, and includes members of our standing Disclosure Committee.
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Our assessment and management of material risks from cybersecurity threats are considered in the Company’s overall risk management processes.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeDutch Bros Inc. | Form 10-K | 67 Table of Contents In addition to our company-operated shops, we own and lease the following facilities: Location Primary Function(s) Square Feet Owned or Leased Grants Pass, Oregon Headquarters office space 21,000 Leased Grants Pass, Oregon Roasting and packing facility 36,000 Owned Grants Pass, Oregon Roasting and warehouse facility 21,000 Leased Melissa, Texas Roasting and packing facility 65,000 Owned Scottsdale, Arizona Office space 25,000 Leased Tempe, Arizona Headquarters office space 136,000 Leased Our principal executive offices are located at 300 N.
Biggest changeIn addition to our company-operated shops, we own and lease the following facilities: Location Primary Function(s) Square Feet Owned or Leased Tempe (Phoenix), Arizona Headquarters office space 136,000 Leased Grants Pass, Oregon Roasting and packing facility 36,000 Owned Grants Pass, Oregon Roasting and warehouse facility 21,000 Leased Grants Pass, Oregon Administration office space 18,000 Leased Melissa, Texas Roasting and packing facility 65,000 Owned Our principal executive offices are located at 1930 W.
For additional information regarding leases, see NOTE 2 — Basis of Presentation and Summary of Significant Accounting Policies and NOTE 8 — Leases in our consolidated financial statements, included elsewhere in this Form 10-K.
For additional information regarding leases, see NOTE 2 — Basis of Presentation and Summary of Significant Accounting Policies and NOTE 8 — Leases in our consolidated financial statements, included elsewhere in this Form 10-K. Dutch Bros Inc. | Form 10-K | 70 Table of Contents
ITEM 2. PROPERTIES As of December 31, 2024, we had 670 company-operated and 312 franchise shops with 982 total shops in 18 states. The chart below shows our properties by state as of December 31, 2024.
ITEM 2. PROPERTIES As of December 31, 2025, we had 811 company-operated and 325 franchise shops with 1,136 total shops in 25 states. The chart below shows our properties by state as of December 31, 2025.
Valley Drive, Grants Pass, Oregon, 97526. We believe our current facilities are suitable for our near-term needs. In addition, we expect to continue to add additional capacity on an as-needed basis.
Rio Salado Pkwy, Tempe, Arizona, 85281. We believe our current facilities are suitable for our near-term needs. In addition, we expect to continue to add additional capacity on an as-needed basis.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially adversely affect our business, financial condition, results of operations, and growth prospects. Please refer to NOTE 17 — Commitments and Contingencies under the heading “Legal Proceedings” for further information.
Biggest changeThe outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially and adversely affect our business, financial condition, results of operations, and growth prospects. Please refer to NOTE 16 — Commitments and Contingencies under the heading “Legal Proceedings” for further information.
ITEM 3. LEGAL PROCEEDINGS We may, from time to time, be party to litigation and subject to claims incident to the ordinary course of business. As our company matures, we may become party to an increasing number of litigation matters and claims.
ITEM 3. LEGAL PROCEEDINGS We may, from time to time, be a party to litigation and subject to claims incident to the ordinary course of business. As our company matures, we may become party to an increasing number of litigation matters and claims.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDutch Bros Inc. | Form 10-K | 69 Table of Contents Sep 15, 2021 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 Dutch Bros Inc. $ 100.00 $ 138.79 $ 76.85 $ 86.34 $ 89.97 $ 112.87 $ 87.32 $ 142.80 S&P 500 Index $ 100.00 $ 106.37 $ 85.69 $ 106.45 $ 117.27 $ 121.87 $ 128.61 $ 131.27 S&P 500 Consumer Discretionary Index $ 100.00 $ 109.67 $ 68.46 $ 96.55 $ 101.14 $ 101.59 $ 109.31 $ 124.68 The above Stock Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
Biggest changeDutch Bros Inc. | Form 10-K | 72 Table of Contents The comparisons in the graph below are based upon historical data and are not indicative of, nor intend to forecast, future performance of our Class A common stock. 9/15/2021 (IPO) Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Dec 31, 2025 Dutch Bros Inc. $ 100.00 $ 138.79 $ 76.85 $ 86.34 $ 142.80 $ 166.90 S&P 500 Index $ 100.00 $ 106.37 $ 85.69 $ 106.45 $ 131.27 $ 152.78 S&P 500 Consumer Discretionary Index $ 100.00 $ 109.67 $ 68.46 $ 96.55 $ 124.68 $ 131.30 The above Stock Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
As of December 31, 2024, we also had three holders of record of our Class B common stock, and one holder of record of our Class C common stock. Dividend Policy We have not declared or paid dividends on our Class A common stock.
As of December 31, 2025, we also had three holders of record of our Class B common stock, and one holder of record of our Class C common stock. Dividend Policy We have not declared or paid dividends on our Class A common stock.
Since June 2024, there have been no shares of Class D common stock outstanding. Stockholders As of December 31, 2024, our Class A common stock was held by 122 holders of record.
Since June 2024, there have been no shares of Class D common stock outstanding. Stockholders As of December 31, 2025, our Class A common stock was held by 126 holders of record.
Issuer Purchases of Equity Securities The following table summarizes purchases of Class A common stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased 1 Weighted-Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2024 — — — — November 1 - 30, 2024 4,092 $ 33.40 — — December 1 - 31, 2024 — — — — _________________ 1 In connection with the vesting of RSUs granted pursuant to the Dutch Bros Inc. 2021 Equity Incentive Plan, as amended, shares of Class A common stock are delivered to Dutch Bros by employees to satisfy tax withholding obligations.
Issuer Purchases of Equity Securities The following table summarizes purchases of Class A common stock during the three months ended December 31, 2025: Period Total Number of Shares Purchased 1 Weighted-Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2025 — — — — November 1 - 30, 2025 8,814 $ 55.54 — — December 1 - 31, 2025 — — — — _________________ 1 In connection with the vesting of RSUs granted pursuant to the Dutch Bros Inc. 2021 Equity Incentive Plan, as amended, shares of Class A common stock are delivered to Dutch Bros by employees to satisfy tax withholding obligations.
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The comparisons in the graph below are based upon historical data and are not indicative of, nor intend to forecast, future performance of our Class A common stock.
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Dutch Bros Inc. | Form 10-K | 73 Table of Contents
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Recent Sales of Unregistered Securities The Continuing Members, from time-to-time, may require us to exchange all or a portion of their Dutch Bros OpCo Class A common units (together with the cancellation of any shares of our Class B common stock or Class C common stock paired with such units) for shares of Class A common stock on a one-for-one basis.
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The shares of Class B common stock or Class C common stock paired with such Dutch Bros OpCo Class A common units will be canceled on a one-for-one basis upon any such issuance of Class A common stock.
Removed
During the year ended December 31, 2024, pursuant to Section 3(a)(9) of the Securities Act, we made unregistered issuances of our Class A common stock via exchange of approximately 13.8 million Dutch Bros OpCo Class A common units (and corresponding cancellation of the same number of shares of Class C common stock) and conversion of approximately 4.4 million shares of our Class D common stock, held by our Sponsor for shares of our Class A common stock on a one-for-one basis.
Removed
Such shares of Class A common stock were then sold directly by our Sponsor pursuant to Rule 144 of the Securities Act, and no proceeds were received by the Company.
Removed
During the year ended December 31, 2024, pursuant to Section 3(a)(9) of the Securities Act, we made an unregistered issuance of our Class A common stock via exchange of approximately 2.4 million Dutch Bros OpCo Class A common units (and corresponding cancellation of the same number of shares of Class B common stock) held by our Co-Founder for shares of our Class A common stock on a one-for-one basis.
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Dutch Bros Inc. | Form 10-K | 70 Table of Contents Such shares of Class A common stock were then reserved for sale directly by our Co-Founder pursuant to a Rule 10b5-1 trading arrangement, and no proceeds were received by the Company.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following are reconciliations of the most comparable GAAP metric to non-GAAP metrics (presented in dollars and as a percentage of revenue): Segment contribution: Year Ended December 31, 2024 2023 2022 (in thousands; unaudited) $ % $ % $ % Company-operated shop gross profit 259,959 22.3 180,235 21.0 121,327 19.0 Depreciation and amortization 86,809 7.4 62,088 7.2 36,306 5.6 Company-operated shop contribution 346,768 29.7 242,323 28.2 157,633 24.6 Year Ended December 31, 2024 2023 2022 (in thousands; unaudited) $ % $ % $ % Franchising and other gross profit 80,170 69.6 71,061 65.9 59,589 60.0 Depreciation and amortization 4,915 4.3 5,398 5.0 5,706 5.8 Franchising and other contribution 85,085 73.9 76,459 70.9 65,295 65.8 Dutch Bros Inc. | Form 10-K | 87 Table of Contents Year Ended December 31, 2024 2023 2022 (in thousands; unaudited) $ % $ % $ % Net income (loss) 66,450 5.2 9,952 1.0 (19,253) (2.6) Depreciation and amortization 93,005 7.3 69,135 7.2 44,728 6.0 Interest expense, net 27,020 2.1 32,321 3.3 18,018 2.4 Income tax expense 18,435 1.4 6,967 0.8 2,599 0.4 EBITDA 204,910 16.0 118,375 12.3 46,092 6.2 Equity-based compensation 11,482 0.9 39,222 4.1 41,657 5.6 Expenses associated with equity offerings 1,489 0.1 — — — — COVID-19: Catastrophic leave — — — — 1,468 0.2 COVID-19: prepaid costs not utilized — — — — 2,305 0.3 Milestone events — — — — 2,434 0.3 Executive transitions 75 — 1,000 0.1 691 0.1 TRAs remeasurement (4,247) (0.3) (2,638) (0.3) (3,466) (0.4) Legal proceedings — — 1,950 0.2 — — Sale of aircraft (1,302) (0.1) — — — — Organization realignment and restructuring: Consulting — — 2,153 0.2 — — Employee-related costs 15,549 1.2 — — — — Other costs 2,327 0.2 — — — — Total organization realignment and restructuring 17,876 1.4 2,153 0.2 — — Adjusted EBITDA 230,283 18.0 160,062 16.6 91,181 12.3 Year Ended December 31, 2024 2023 2022 (in thousands; unaudited) $ % $ % $ % Selling, general, and administrative 234,036 18.3 205,074 21.2 183,528 24.8 Depreciation and amortization (1,281) (0.2) (1,648) (0.1) (2,716) (0.4) Equity-based compensation (10,595) (0.8) (39,222) (4.1) (41,657) (5.6) Expenses associated with equity offerings (1,489) (0.1) — — — — COVID-19: prepaid costs not utilized — — — — (2,305) (0.3) Milestone events — — — — (2,434) (0.3) Executives transition (75) — (1,000) (0.1) (691) (0.1) Legal proceedings — — (1,950) (0.2) — — Organization realignment and restructuring: Consulting — — (2,153) (0.2) — — Employee-related costs (15,549) (1.2) — — — — Other costs (2,327) (0.2) — — — — Total organization realignment and restructuring (17,876) (1.4) (2,153) (0.2) — — Adjusted selling, general and administrative 202,720 15.8 159,101 16.5 133,725 18.1 Dutch Bros Inc. | Form 10-K | 88 Table of Contents
Biggest changeDutch Bros Inc. | Form 10-K | 89 Table of Contents The following are reconciliations of the most comparable GAAP metric to non-GAAP metrics (presented in dollars and as a percentage of revenue): Year Ended December 31, 2025 2024 2023 (dollars in thousands; unaudited) $ % $ % $ % Company-operated shops gross profit 330,389 21.9 259,959 22.3 180,235 21.0 Depreciation and amortization 106,216 7.0 86,809 7.4 62,088 7.2 Company-operated shops contribution 436,605 28.9 346,768 29.7 242,323 28.2 Year Ended December 31, 2025 2024 2023 (dollars in thousands; unaudited) $ % $ % $ % Franchising and other gross profit 93,557 72.6 80,170 69.6 71,061 65.9 Depreciation and amortization 5,537 4.3 4,915 4.3 5,398 5.0 Franchising and other contribution 99,094 76.9 85,085 73.9 76,459 70.9 Year Ended December 31, 2025 2024 2023 (dollars in thousands; unaudited) $ % $ % $ % Net income 117,275 7.2 66,450 5.2 9,952 1.0 Depreciation and amortization 115,133 7.0 93,005 7.3 69,135 7.2 Interest expense, net 28,305 1.7 27,020 2.1 32,321 3.3 Income tax expense 18,348 1.1 18,435 1.4 6,967 0.8 EBITDA 279,061 17.0 204,910 16.0 118,375 12.3 Equity-based compensation 18,022 1.2 11,482 0.9 39,222 4.1 Expenses associated with equity offerings — — 1,489 0.1 — — Expenses associated with 2022 credit facility refinancing 2,000 0.1 — — — — Executive transitions — — 75 — 1,000 0.1 TRAs remeasurement (4,767) (0.3) (4,247) (0.3) (2,638) (0.3) Legal proceedings — — — — 1,950 0.2 Sale of Aircraft — — (1,302) (0.1) — — Organization realignment and restructurings: Consulting — — — — 2,153 0.2 Employee-related costs 7,607 0.5 15,549 1.2 — — Other costs 631 — 2,327 0.2 — — Total organization realignment and restructurings 8,238 0.5 17,876 1.4 2,153 0.2 Adjusted EBITDA 302,554 18.5 230,283 18.0 160,062 16.6 Dutch Bros Inc. | Form 10-K | 90 Table of Contents Year Ended December 31, 2025 2024 2023 (dollars in thousands; unaudited) $ % $ % $ % Selling, general, and administrative 262,766 16.0 234,036 18.3 205,074 21.2 Depreciation and amortization (3,380) (0.2) (1,281) (0.2) (1,648) (0.2) Equity-based compensation (15,886) (0.9) (10,595) (0.8) (39,222) (4.0) Expenses associated with equity offerings — — (1,489) (0.1) — — Executives transition — — (75) — (1,000) (0.1) Legal proceedings — — — — (1,950) (0.2) Organization realignment and restructurings: Consulting — — — — (2,153) (0.2) Employee-related costs (7,607) (0.5) (15,549) (1.2) — — Other costs (631) — (2,327) (0.2) — — Total organization realignment and restructurings (8,238) (0.5) (17,876) (1.4) (2,153) (0.2) Adjusted selling, general, and administrative 235,262 14.4 202,720 15.8 159,101 16.5 Dutch Bros Inc. | Form 10-K | 91 Table of Contents
Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects. 5 Company-operated and franchise shop operating weeks are calculated based on the number of operating days for the shop base and dividing by 7. Our shop base is defined as shops opened as of the period end date.
Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects. 5 Company-operated and franchise shops operating weeks are calculated based on the number of operating days for the shop base and dividing by 7. Our shop base is defined as shops opened as of the period end date.
Non-GAAP adjustments Below are the definitions of the non-GAAP adjustments that are used in the calculation of our non-GAAP measures, as described above. Equity-based compensation Non-cash expenses related to the grant and vesting of stock awards, including RSAs and RSUs, in Dutch Bros Inc. to certain eligible employees.
Non-GAAP adjustments Below are the definitions of the non-GAAP adjustments that are used in the calculation of our non-GAAP measures, as described above. Equity-based compensation Non-cash expenses related to the grant and vesting of stock awards, including RSAs, RSUs and PSUs, in Dutch Bros Inc. to certain eligible employees.
Our current and long-term material cash requirements as of December 31, 2024, primarily include the following: • Debt Obligations: Refer to NOTE 9 — Debt, of the notes to the consolidated financial statements, included elsewhere in this Form 10-K, for further information of our obligations and the timing of expected payments. • Operating and Finance Leases: Refer to NOTE 8 — Leases, of the notes to the consolidated financial statements, included elsewhere in this Form 10-K, for further information of our obligations and the timing of expected payments. • Purchase Obligations: include all legally binding contracts, including firm minimum commitments for inventory purchases, commitments for the purchase, construction or remodeling of real estate facilities, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts.
Our current and long-term material cash requirements as of December 31, 2025, primarily include the following: • Debt Obligations: Refer to NOTE 9 — Debt, of the notes to the consolidated financial statements, included elsewhere in this Form 10-K, for further information of our obligations and the timing of expected payments. • Operating and Finance Leases: Refer to NOTE 8 — Leases, of the notes to the consolidated financial statements, included elsewhere in this Form 10-K, for further information of our obligations and the timing of expected payments. • Purchase Obligations: include all legally binding contracts, including firm minimum commitments for inventory purchases, commitments for the purchase, construction or remodeling of real estate facilities, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts.
Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. Today, we believe that Dutch Bros is one of the fastest-growing brands in the quick service beverage industry in the United States by location count.
Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. Today, we believe that Dutch Bros is one of the fastest-growing brands in the quick service beverage industry in the United States.
Cash Requirements We believe that cash provided by operating activities and proceeds from our 2022 Credit Facility are adequate to fund our debt service requirements, lease obligations, cash distributions required by the OpCo LLC Agreement and the TRAs, and working capital obligations for at least the next 12 months.
Cash Requirements We believe that cash provided by operating activities and proceeds from our 2025 Credit Facility are adequate to fund our debt service requirements, lease obligations, cash distributions required by the OpCo LLC Agreement and the TRAs, and working capital obligations for at least the next 12 months.
AUVs are calculated by dividing the systemwide and company-operated shop net sales by the total number of systemwide and company-operated shops, respectively.
AUVs are calculated by dividing the systemwide and company-operated shops net sales by the total number of systemwide and company-operated shops, respectively.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Annual Report on Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Annual Report on Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 13, 2025.
Further, the section of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Further, the section of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
As of December 31, 2024, purchase obligations were approximately $210 million, of which substantially all are expected to be paid within one to two years. • TRAs Obligations: Refer to NOTE 11 — Tax Receivable Agreements and NOTE 17 — Commitments and Contingencies, of the notes to the consolidated financial statements, included elsewhere in this Form 10-K, for further information of our obligations.
As of December 31, 2025, purchase obligations were approximately $370 million, of which substantially all are expected to be paid within one to two years. • TRAs Obligations: Refer to NOTE 11 — Tax Receivable Agreements and NOTE 16 — Commitments and Contingencies, of the notes to the consolidated financial statements, included elsewhere in this Form 10-K, for further information of our obligations.
Year Ended December 31, (unaudited) 2024 2023 2022 Systemwide shop base 641 503 414 Company-operated shop base 370 246 173 4 Systemwide sales and systemwide same shop sales are operating measures that include sales at company-operated shops and sales at franchised shops during the comparable periods presented.
Year Ended December 31, (unaudited) 2025 2024 2023 Systemwide shop base 794 641 503 Company-operated shops base 510 370 246 4 Systemwide sales and systemwide same shop sales are operating measures that include sales at company-operated shops and sales at franchised shops during the comparable periods presented.
Principal payments for the term loans are required on a quarterly basis in accordance with an amortization schedule up through and including the Maturity Date. Obligations under the 2022 Credit Facility are guaranteed by each of Dutch Bros Inc.’s subsidiaries, and secured by a first priority perfected security interest in substantially all of the assets of the guarantors.
Principal payments for the term loans are required on a quarterly basis in accordance with an amortization schedule up through and including the Maturity Date. Obligations under the 2025 Credit Facility are guaranteed by Dutch Bros OpCo and certain of its subsidiaries, and secured by a first priority perfected security interest in substantially all of the assets of the guarantors.
Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Page Overview and Highlights 73 Impact of Global Events 73 Results of Operations 74 Key Performance Indicators 75 Company-operated Shop Results 77 Franchising and Other Segment Performance 80 Selling, General, and Administrative 80 Other Expense 81 Income Tax Expense 81 Liquidity and Capital Resources 81 Non-GAAP Financial Measures 85 Dutch Bros Inc. | Form 10-K | 72 Table of Contents Overview and Highlights Dutch Bros is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE.
Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Section Page Overview 76 Impact of Global Events 76 Results of Operations 77 Key Performance Indicators 78 Company-operated Shops Results 80 Franchising and Other Segment Performance 82 Selling, General, and Administrative 82 Other Expense 83 Income Tax Expense 83 Liquidity and Capital Resources 83 Non-GAAP Financial Measures 88 Dutch Bros Inc. | Form 10-K | 75 Table of Contents Overview Dutch Bros is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE.
Dutch Bros Inc. | Form 10-K | 86 Table of Contents Executive transitions Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive-level transitions occurring in 2022 and 2023, and amortized through the first quarter of 2024. TRAs remeasurements (Gain) loss impacts related to adjustments of our TRAs liabilities.
Executive transitions Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive-level transitions occurring in 2022 and 2023, and amortized through the first quarter of 2024. TRAs remeasurements (Gain) loss impacts related to adjustments of our TRAs liabilities.
Dutch Bros Inc. | Form 10-K | 82 Table of Contents Other than operating expenses, our cash requirements for 2025 are expected to consist primarily of capital expenditures for investments in our new and existing shops, our supply chain, and our corporate facilities. The total capital expenditures for 2025 are estimated to be approximately $240 million to $260 million.
Dutch Bros Inc. | Form 10-K | 84 Table of Contents Other than operating expenses, our cash requirements for 2026 are expected to consist primarily of capital expenditures for investments in our new and existing shops, and our corporate facilities. The total capital expenditures for 2026 are estimated to be approximately $270 million to $290 million.
Impact of Global Events General Macroeconomic Uncertainties As a retailer that is dependent upon consumer discretionary spending, our results of operations are sensitive to changes in macroeconomic conditions. Inflation may have a material adverse effect on our business, financial condition or results of operations.
Impact of Global Events General Macroeconomic Uncertainties As a retailer that is dependent upon consumer discretionary spending, our results of operations are sensitive to changes in macroeconomic conditions. Inflation or consumer recession concerns, coupled with a rise in the U.S. unemployment rate, may have a material adverse effect on our business, financial condition or results of operations.
Dutch Bros Inc. | Form 10-K | 84 Table of Contents Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The purpose of the floating-to-fixed interest rate swap is to fix the interest base rate charged on the term loan at 2.67% for the notional amount. The interest rate swap matures on February 28, 2027.
The purpose of the floating-to-fixed interest rate swap is to fix the interest base rate charged on the term loan at 2.67% for the notional amount. The interest rate swap matures on February 28, 2027. The amendment to our credit facility had no impact on our interest rate swap contract.
Usefulness to management and investors This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors.
Dutch Bros Inc. | Form 10-K | 88 Table of Contents Usefulness to management and investors This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors.
Our principal uses of liquidity for the year ended December 31, 2024 were to fund our new shop builds, our new Texas roasting facility, and other working capital needs.
Our principal uses of liquidity for the year ended December 31, 2025 were to pay off our prior credit facility, fund our new shop builds and other working capital needs.
For the year ended December 31, 2024, we generated $1.3 billion of revenue, $66.5 million net income, and $0.34 income per diluted share.
For the year ended December 31, 2025, we generated $1.6 billion of revenue, $117.3 million of net income, and $0.64 of income per diluted share.
As of December 31, 2024, we recognized $627.8 million of liabilities relating to our obligations under the TRAs.
As of December 31, 2025, we recognized $821.0 million of liabilities relating to our obligations under the TRAs.
Interest on borrowings under the 2022 Credit Facility is based on (a) the Alternate Base Rate plus an applicable margin, or (b) the Adjusted Term SOFR plus an applicable margin, and is payable in accordance with the selected interest rate period (at least quarterly) and upon maturity.
Interest on borrowings under the 2025 Credit Facility is based on (i) the Alternate Base Rate plus an applicable margin, or (ii) the Term SOFR Rate plus an applicable margin (each as defined in the 2025 Credit Facility), and is payable in accordance with the selected interest rate period and upon maturity.
Interest Rate Swap Contract We have an interest rate swap with JPMorgan Chase Bank, N.A. As of December 31, 2024, the interest rate swap had a notional amount of approximately $63.9 million and hedges interest rate risk on the term loan under the 2022 Credit Facility.
Dutch Bros Inc. | Form 10-K | 85 Table of Contents Interest Rate Swap Contract We have an interest rate swap with JPMorgan Chase Bank, N.A. As of December 31, 2025, the interest rate swap had a notional amount of approximately $59 million and hedges interest rate risk on the term loan under the 2025 Credit Facility.
Dutch Bros Inc. | Form 10-K | 78 Table of Contents Pre-opening Costs Year Ended December 31, (in thousands, except shop data; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Pre-opening costs $15,133 $14,083 $17,986 $1,050 7.5% $(3,903) (21.7)% As a percentage of company-operated shop revenues 1.3% 1.6% 2.8% N/A (30) bps N/A (120) bps New company-operated shops opened 128 146 120 (18) (12.3)% 26 21.7% Pre-opening costs per new company-operated shop $118 $96 $150 $22 22.9% $(54) (36.0)% Year Ended December 31, 2024 v. 2023 The increase in pre-opening costs was primarily driven by increased travel for setup and training teams and lease expense related to unopened shops, in the year ended December 31, 2024 as compared to the same period in 2023.
Pre-opening Costs Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Pre-opening costs $25,355 $15,133 $14,083 $10,222 67.5% $1,050 7.5% As a percentage of company-operated shops revenues 1.7% 1.3% 1.6% N/A 40 bps N/A (30) bps New company-operated shops opened 141 128 146 13 10.2% (18) (12.3)% Pre-opening costs per new company-operated shop $180 $118 $96 $62 52.5% $22 22.9% Year Ended December 31, 2025 v. 2024 The increase in pre-opening costs was primarily driven by increased travel for setup and training teams, and lease expense related to unopened shops, in the year ended December 31, 2025 as compared to the same period in 2024.
We have two reportable operating segments: Company-operated shops and Franchising and other. _________________ 1 Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. 2024 vs 2023 2023 vs 2022 Increase in total shops 18.2 % 23.8 % Increase in total revenue 32.6 % 30.7 % Dutch Bros Inc. | Form 10-K | 74 Table of Contents Key Performance Indicators The key performance indicators that we use to effectively manage and evaluate our business are as follows: Year Ended December 31, (in thousands, except shop count data; unaudited) 2024 2023 2022 Shop count, beginning of period Company-operated 542 396 271 Franchised 289 275 267 Total shop count 831 671 538 Company-operated new openings 128 146 120 Franchised new openings 23 13 13 Acquisition of franchise shops — — 5 Re-openings 1 — 1 — Shop count, end of period Company-operated 670 542 396 Franchised 312 289 275 Total shop count 982 831 671 Systemwide AUV 2 $ 2,018 $ 1,973 $ 1,924 Company-operated shops AUV 2 $ 1,933 $ 1,902 $ 1,895 Systemwide same shop sales 3, 4 5.3 % 2.8 % 1.0 % Ticket 5.4 % 7.3 % 4.8 % Transactions (0.1) % (4.5) % (3.8) % Company-operated same shop sales 3 6.8 % 1.5 % 0.6 % Ticket 5.3 % 7.2 % 4.7 % Transactions 1.5 % (5.7) % (4.1) % Systemwide sales 4 $ 1,819,018 $ 1,444,433 $ 1,163,182 Company-operated shops operating weeks 5 31,708 24,395 17,489 Franchising shops operating weeks 5 15,579 14,624 13,828 Dutch Rewards transactions as a percentage of total transactions 6 67.8 % 64.5 % 62.3 % Dutch Bros Inc. | Form 10-K | 75 Table of Contents Year Ended December 31, 2024 2023 2022 (in thousands; unaudited) $ % $ % $ % Company-operated shop revenues 1,165,830 100.0 857,939 100.0 639,710 100.0 Company-operated shop gross profit 259,959 22.3 180,235 21.0 121,327 19.0 Company-operated shop contribution 7 346,768 29.7 242,323 28.2 157,633 24.6 Selling, general, and administrative expenses 234,036 18.3 205,074 21.2 183,528 24.8 Adjusted selling, general, and administrative expenses 7 202,720 15.8 159,101 16.5 133,725 18.1 Net income (loss) 66,450 5.2 9,952 1.0 (19,253) (2.6) Adjusted EBITDA 7 230,283 18.0 160,062 16.6 91,181 12.3 _________________ 1 Re-opening of a shop that was temporarily closed in 2021. 2 AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months.
We have two reportable operating segments: Company-operated shops and Franchising and other. 2025 vs 2024 2024 vs 2023 Increase in total shops 15.7 % 18.2 % Increase in total revenue 27.9 % 32.6 % Dutch Bros Inc. | Form 10-K | 77 Table of Contents Key Performance Indicators The key performance indicators that we use to effectively manage and evaluate our business are as follows: Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 Shop count, beginning of period Company-operated 670 542 396 Franchised 312 289 275 Total shop count 982 831 671 Company-operated new openings 141 128 146 Franchised new openings 13 23 13 Re-openings 1 — — 1 Shop count, end of period Company-operated 811 670 542 Franchised 325 312 289 Total shop count 1,136 982 831 Systemwide AUV 2 $ 2,115 $ 2,018 $ 1,973 Company-operated shops AUV 2 $ 2,061 $ 1,933 $ 1,902 Systemwide same shop sales 3, 4 5.6 % 5.3 % 2.8 % Ticket 2.4 % 5.4 % 7.3 % Transactions 3.2 % (0.1) % (4.5) % Company-operated same shop sales 3 7.4 % 6.8 % 1.5 % Ticket 2.0 % 5.3 % 7.2 % Transactions 5.4 % 1.5 % (5.7) % Systemwide sales 4 $ 2,223,576 $ 1,819,018 $ 1,444,433 Company-operated shops operating weeks 5 37,667 31,708 24,395 Franchising shops operating weeks 5 16,527 15,579 14,624 Dutch Rewards transactions as a percentage of total transactions 6 72 % 68 % 65 % Dutch Bros Inc. | Form 10-K | 78 Table of Contents Year Ended December 31, 2025 2024 2023 (dollars in thousands; unaudited) $ % $ % $ % Company-operated shops revenues 1,509,329 100.0 1,165,830 100.0 857,939 100.0 Company-operated shops gross profit 330,389 21.9 259,959 22.3 180,235 21.0 Company-operated shops contribution 436,605 28.9 346,768 29.7 242,323 28.2 Selling, general, and administrative expenses 262,766 16.0 234,036 18.3 205,074 21.2 Adjusted selling, general, and administrative expenses 235,262 14.4 202,720 15.8 159,101 16.5 Net income 117,275 7.2 66,450 5.2 9,952 1.0 Adjusted EBITDA 302,554 18.5 230,283 18.0 160,062 16.6 _________________ 1 Re-opening of a shop that was temporarily closed in 2021. 2 AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months.
Income Taxes In determining the provision for income taxes, we make estimates and judgments which affect our evaluation of the carrying value of our deferred tax assets as well as our calculation of certain tax liabilities. We evaluate the carrying value of our deferred tax assets on a quarterly basis.
Dutch Bros Inc. | Form 10-K | 86 Table of Contents Income Taxes In determining the provision for income taxes, we make estimates and judgments which affect our evaluation of the carrying value of our deferred tax assets as well as our calculation of certain tax liabilities.
Dutch Bros Inc. | Form 10-K | 81 Table of Contents Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Net cash provided by operating activities $ 246,432 $ 139,915 $ 59,883 $ 106,517 76.1% $ 80,032 133.6% Net cash used in investing activities (212,072) (227,280) (192,572) 15,208 (6.7) (34,708) 18.0 Net cash provided by financing activities 125,449 200,732 134,361 (75,283) (37.5)% 66,371 49.4% Net increase in cash and cash equivalents $ 159,809 $ 113,367 $ 1,672 $ 46,442 41.0% $ 111,695 6680.3% Cash and cash equivalents at beginning of period 133,545 20,178 18,506 113,367 561.8 1,672 9.0 Cash and cash equivalents at end of period $ 293,354 $ 133,545 $ 20,178 $ 159,809 119.7% $ 113,367 561.8% Operating Activities The increase in operating activities cash flows was primarily driven by higher net income as a result of year-over-year sales growth, expanded company-operated shop contribution, leverage of selling, general and administrative costs, and working capital management.
Dutch Bros Inc. | Form 10-K | 83 Table of Contents Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Net cash provided by operating activities $ 295,545 $ 246,432 $ 139,915 $ 49,113 19.9% $ 106,517 76.1% Net cash used in investing activities (241,068) (212,072) (227,280) (28,996) 13.7% 15,208 (6.7)% Net cash provided by (used in) financing activities (78,427) 125,449 200,732 (203,876) (162.5)% (75,283) (37.5)% Net increase (decrease) in cash and cash equivalents $ (23,950) $ 159,809 $ 113,367 $ (183,759) (115.0)% $ 46,442 41.0% Cash and cash equivalents at beginning of period 293,354 133,545 20,178 159,809 119.7% 113,367 561.8% Cash and cash equivalents at end of period $ 269,404 $ 293,354 $ 133,545 $ (23,950) (8.2)% $ 159,809 119.7% Operating Activities The increase in operating activities cash flows was primarily driven by higher net income as a result of year-over-year sales growth and leverage of selling, general and administrative costs.
While these pressures have impacted our operating results, we have taken measures to gradually increase our menu prices, adjust our Dutch Rewards loyalty program, and make operating adjustments that increase productivity to help offset them. Menu price increases may lead to decreases in consumer demand.
Several states that we operate in have increased their minimum wage requirements in 2024 and 2025. While these pressures have impacted our operating results, we have taken measures to gradually increase our menu prices, adjust our Dutch Rewards loyalty program, and make operating adjustments that increase productivity to help offset them.
Organization realignment and restructuring Fees and costs, including consulting, employee-related and other costs, in connection with our comprehensive initiative to develop and implement a long-term strategy involving changes to our organizational structure to support our growth.
Sale of Aircraft Gain impact related to the sale of the Company airplane, hangar and related equipment to our Co-Founder. Organization realignment and restructurings Fees and costs, including consulting, employee-related and other costs, in connection with our comprehensive initiatives to develop and implement a long-term strategy involving changes to our organizational structure to support our growth.
Given this strategic initiative's magnitude and scope, we do not expect such costs will recur in the foreseeable future, and do not consider such costs reflective of the ongoing costs necessary to operate our business.
Given the magnitude and scope of these strategic initiatives, we do not expect such costs will recur in the foreseeable future, and do not consider such expenditures reflective of the ongoing expenses necessary to operate our business. See NOTE 4 — Organization Realignment and Restructurings for detailed information.
Liquidity and Capital Resources Cash Overview We had cash and cash equivalents of $293.4 million and $133.5 million as of December 31, 2024 and December 31, 2023, respectively. For the year ended December 31, 2024, our principal sources of liquidity were cash flows from operations and our delayed draw term loan facility.
See NOTE 12 — Income Taxes for additional details. Liquidity and Capital Resources Cash Overview We had cash and cash equivalents of $269.4 million and $293.4 million as of December 31, 2025 and December 31, 2024, respectively. For the year ended December 31, 2025, our principal sources of liquidity were cash flows from operations.
Investing Activities The decrease in investing activities cash outflows was primarily driven by lower i nvestment in capital expenditures due to fewer new company-operated shop openings in the current period compared to last period, and higher proceeds from disposal of fixed assets in the current year, driven by the sale of our company plane (a non-recurring event) .
Investing Activities The slight increase in investing activities cash outflows was primarily driven by higher i nvestment in capital expenditures due to new company-operated shops openings in the current period compared to the same period in the prior year, partially offset by lower proceeds from disposal of fixed assets.
Dutch Bros Inc. | Form 10-K | 73 Table of Contents Results of Operations As of December 31, 2024, we had 982 company-operated and franchised shops in 18 states, an increase of approximately 18.2% from the same period in the prior year.
Dutch Bros Inc. | Form 10-K | 76 Table of Contents Results of Operations As of December 31, 2025, we had 1,136 systemwide shops in 25 states, an increase of approximately 15.7% from the same period in the prior year.
Further, the payments that we may be required to make under the TRAs may be significant. We currently expect to fund our current and long-term material capital requirements with operating cash flows and, as needed, additional proceeds from our 2022 Credit Facility, but we may also seek additional debt or equity financing.
We currently expect to fund our current and long-term material capital requirements with operating cash flows and, as needed, additional proceeds from our 2025 Credit Facility, but we may also seek additional debt or equity financing. From time to time, we may explore additional financing sources which could include equity, equity‑linked, and debt financing arrangements.
Adjusted selling, general, and administrative Definition and/or calculation Selling, general, and administrative expenses, excluding depreciation and amortization, equity-based compensation expense, expenses associated with equity offerings, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executive transitions, legal proceedings, and organization realignment and restructuring costs.
Adjusted selling, general, and administrative Definition and/or calculation Selling, general, and administrative expenses, excluding depreciation and amortization, equity-based compensation expense, expenses associated with equity offerings, executive transitions costs, and organization realignment and restructurings costs.
Dutch Bros Inc. | Form 10-K | 77 Table of Contents Beverage, Food, and Packaging Costs Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Beverage, food and packaging costs $296,752 $230,133 $171,864 $66,619 28.9% $58,269 33.9% As a percentage of company-operated shop revenues 25.5% 26.9% 26.9% N/A (140) bps N/A — bps Year Ended December 31, 2024 v. 2023 As a percentage of company-operated shop revenues, beverage, food and packaging costs decreased by 140 basis points.
Beverage, Food, and Packaging Costs Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Beverage, food and packaging costs $390,331 $296,752 $230,133 $93,579 31.5% $66,619 28.9% As a percentage of company-operated shops revenues 25.9% 25.5% 26.9% N/A 40 bps N/A (140) bps Year Ended December 31, 2025 v. 2024 As a percentage of company-operated shops revenues, beverage, food and packaging costs increased by 40 basis points.
Depreciation and Amortization Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Depreciation and amortization $86,809 $62,088 $36,306 $24,721 39.8% $25,782 71.0% As a percentage of company-operated shop revenues 7.4% 7.2% 5.6% N/A 20 bps N/A 160 bps Year Ended December 31, 2024 v. 2023 The increase in depreciation and amortization was primarily driven by the opening of 128 new company-operated shops during 2024.
Depreciation and Amortization Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Depreciation and amortization $106,216 $86,809 $62,088 $19,407 22.4% $24,721 39.8% As a percentage of company-operated shops revenues 7.0% 7.4% 7.2% N/A (40) bps N/A 20 bps Year Ended December 31, 2025 v. 2024 The increase in depreciation and amortization was primarily driven by the increase in the number of company-operated shops in the current period compared to the prior period.
While we are not able to fully predict the potential impacts of these conditions, we do not currently believe any potential impacts of these macroeconomic conditions would be material to our business. Minimum Wage Increases We continued to experience the effects of legislated minimum wage increases that took effect in 2024 in certain states.
While we are not able to fully predict the potential impacts of these conditions, we do not currently believe any potential impacts of these macroeconomic conditions would be material to our business. Minimum Wage Increases We expect pressures from minimum wage increases to continue to affect our operating results in the foreseeable future.
Selling, General, and Administrative Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Selling, General and Administrative $234,036 $205,074 $183,528 $28,962 14.1% $21,546 11.7% As a percentage of total revenues 18.3% 21.2% 24.8% N/A (290) bps N/A N/M Year Ended December 31, 2024 v. 2023 The selling, general, and administrative increase of approximately $29.0 million was primarily driven by increased expenses of $25.8 million primarily consisting of investments in human capital to support our revenue growth and higher performance-based compensation; an increase of $15.7 million of organization realignment and restructuring costs (which includes a $1.8 million net expense that resulted from the donation of our former Grants Pass headquarters building for the development of a children’s learning center); $12.6 million of increased professional fees and technology services to support our growing business; and $4.0 million of increased donations to our Foundation.
Selling, General, and Administrative Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Selling, general, and administrative $262,766 $234,036 $205,074 $28,730 12.3% $28,962 14.1% As a percentage of total revenues 16.0% 18.3% 21.2% N/A (230) bps N/A N/M Year Ended December 31, 2025 v. 2024 The selling, general, and administrative increase of approximately $28.7 million was primarily driven by increased expenses of $24.7 million consisting of investments in human capital to support our revenue growth and higher performance-based compensation; an increase of $9.9 million related to professional fees and technology services to support our growing business; and $5.3 million of higher equity-based compensation.
Labor Costs Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Labor costs $315,805 $230,505 $182,861 $85,300 37.0% $47,644 26.1% As a percentage of company-operated shop revenues 27.1% 26.9% 28.6% N/A 20 bps N/A (170) bps Year Ended December 31, 2024 v. 2023 As a percentage of company-operated shop revenues, labor costs increased by 20 basis points.
Dutch Bros Inc. | Form 10-K | 80 Table of Contents Labor Costs Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Labor costs $405,932 $315,805 $230,505 $90,127 28.5% $85,300 37.0% As a percentage of company-operated shops revenues 26.9% 27.1% 26.9% N/A (20) bps N/A 20 bps Year Ended December 31, 2025 v. 2024 As a percentage of company-operated shops revenues, labor costs decreased by 20 basis points.
Franchising and Other Segment Performance Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Franchising and other revenue $115,185 $107,837 $99,302 $7,348 6.8% $8,535 8.6% Franchising and other gross profit $80,170 $71,061 $59,589 $9,109 12.8% $11,472 19.3% As a percentage of franchising and other revenue 69.6% 65.9% 60.0% N/A 370 bps N/A 590 bps Year Ended December 31, 2024 v. 2023 The franchising and other gross profit increase of $9.1 million was driven by $4.6 million due to newly opened franchised shops not in the comparable shop base, $2.6 million from same shop sales, and a $1.9 million increase from products sold to franchisees, net of costs and adjustments.
Franchising and Other Segment Performance Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Franchising and other revenue $128,830 $115,185 $107,837 $13,645 11.8% $7,348 6.8% Franchising and other gross profit $93,557 $80,170 $71,061 $13,387 16.7% $9,109 12.8% As a percentage of franchising and other revenue 72.6% 69.6% 65.9% N/A 300 bps N/A 370 bps Year Ended December 31, 2025 v. 2024 The franchising and other gross profit increase of $13.4 million was driven by products sold to franchisees (net of costs and adjustments), royalties and marketing fees generated from higher franchise partner sales.
Occupancy and Other Costs Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Occupancy and other costs $191,372 $140,895 $109,366 $50,477 35.8% $31,529 28.8% As a percentage of company-operated shop revenues 16.4% 16.4% 17.1% N/A — bps N/A (70) bps Year Ended December 31, 2024 v. 2023 As a percentage of company-operated shop revenues, occupancy and other costs were flat.
Occupancy and Other Costs Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Occupancy and other costs $251,106 $191,372 $140,895 $59,734 31.2% $50,477 35.8% As a percentage of company-operated shops revenues 16.6% 16.4% 16.4% N/A 20 bps N/A — bps Year Ended December 31, 2025 v. 2024 As a percentage of company-operated shops revenues, occupancy and other costs increased by 20 basis points.
Our future capital requirements may vary materially from period to period and will depend on many factors, primarily our expansion and growth by opening additional company-operated shops and/or reacquiring existing franchised shops, and our large-scale organization realignment including relocation of key business operations to Arizona.
Our future capital requirements may vary materially from period to period and will depend on many factors, primarily our expansion and growth by opening additional company-operated shops and/or reacquiring existing franchised shops. Further, the payments that we may be required to make under the TRAs may be significant.
The 2022 Credit Facility consists of a $350 million revolving credit facility, a term loan facility of up to $100 million, and a delayed draw term loan facility of up to $200 million. The 2022 Credit Facility also includes sublimits for letters of credit and swingline loans of up to $50 million and $15 million, respectively.
The 2025 Credit Facility consists of a $500 million revolving credit facility and a term loan facility of up to $150 million. The 2025 Credit Facility also includes sublimits for letters of credit and swingline loans of up to $100 million and $20 million, respectively. The 2025 Credit Facility expires on May 29, 2030 (the Maturity Date).
Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans. 7 Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Dutch Bros Inc. | Form 10-K | 76 Table of Contents Company-operated Sho p Results Results for our company-operated shops segment were as follows: Year Ended December 31, 2024 2023 2022 (in thousands; unaudited) $ % $ % $ % Company-operated shop revenues 1,165,830 100.0 857,939 100.0 639,710 100.0 Beverage, food, and packaging costs 296,752 25.5 230,133 26.9 171,864 26.9 Labor costs 315,805 27.1 230,505 26.9 182,861 28.6 Occupancy and other costs 191,372 16.4 140,895 16.4 109,366 17.1 Pre-opening costs 15,133 1.3 14,083 1.6 17,986 2.8 Depreciation and amortization 86,809 7.4 62,088 7.2 36,306 5.6 Company-operated shop costs and expenses 905,871 77.7 677,704 79.0 518,383 81.0 Company-operated shop gross profit 259,959 22.3 180,235 21.0 121,327 19.0 Company-operated shop contribution 1 346,768 29.7 242,323 28.2 157,633 24.6 _________________ 1 Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Company-operated Shops Segment Performance Company-operated Shop Revenue Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Company-operated shop revenue $1,165,830 $857,939 $639,710 $307,891 35.9% $218,229 34.1% Year Ended December 31, 2024 v. 2023 The company-operated shop revenue increase was driven by $262.3 million from newly opened shops not yet in the comparable shop base and $45.6 million from an increase in same shop sales within the comparable shop base. _________________ 1 The comparable same shop bases were 370, 246, and 173 for the three years ended December 31, 2024, 2023, and 2022, respectively.
Dutch Bros Inc. | Form 10-K | 79 Table of Contents Company-operated Sho ps Results Results for our company-operated shops segment were as follows: Year Ended December 31, 2025 2024 2023 (dollars in thousands; unaudited) $ % $ % $ % Company-operated shops revenues 1,509,329 100.0 1,165,830 100.0 857,939 100.0 Beverage, food, and packaging costs 390,331 25.9 296,752 25.5 230,133 26.9 Labor costs 405,932 26.9 315,805 27.1 230,505 26.9 Occupancy and other costs 251,106 16.6 191,372 16.4 140,895 16.4 Pre-opening costs 25,355 1.7 15,133 1.3 14,083 1.6 Depreciation and amortization 106,216 7.0 86,809 7.4 62,088 7.2 Company-operated shops costs and expenses 1,178,940 78.1 905,871 77.7 677,704 79.0 Company-operated shops gross profit 330,389 21.9 259,959 22.3 180,235 21.0 Company-operated shops contribution 436,605 28.9 346,768 29.7 242,323 28.2 Company-operated Shops Segment Performance Company-operated Shops Revenue Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Company-operated shops revenue $1,509,329 $1,165,830 $857,939 $343,499 29.5% $307,891 35.9% Year Ended December 31, 2025 v. 2024 Company-operated shops revenue increased $268.8 million from newly opened shops not yet in the comparable shop base and $74.6 million from a 7.4% increase in same shop sales.
This was primarily due to a 110 basis point decrease due to the impact of increased pricing on the comparable shop base .
This was primarily due to a 90 basis points increase in coffee costs, partially offset by impact of pricing on the comparable shop base .
This was primarily due to 180 basis points from increased wages, partially offset by a decrease of 110 basis points from the impact of increased pricing and a decrease of 50 basis points driven by staffing management.
This was primarily due to the impact of pricing and sales leverage, partially offset by increased wages.
Dutch Bros Inc. | Form 10-K | 85 Table of Contents Adjusted EBITDA — definition and/or calculation Defined as EBITDA, excluding equity-based compensation, expenses associated with equity offerings, COVID-19: catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transitions costs, (gain) loss on the remeasurement of the liability related to the TRAs, estimated expenses related to certain legal disputes, sale of aircraft, and organization realignment and restructuring costs.
Adjusted EBITDA — definition and/or calculation Defined as EBITDA, excluding equity-based compensation, expenses associated with equity offerings, expenses associated with credit facility refinancing, executives transitions costs, (gain) loss on the remeasurement of the liability related to the TRAs, sale of Aircraft, and organization realignment and restructurings costs.
Financing Activities The decrease in financing activities cash flows was primarily driven by proceeds received in 2023 from our follow-on offering, partially offset by a prior year payoff of our net revolving credit facility, and our delayed draw term loan advance in 2024.
Financing Activities The decrease in financing activities cash flows was primarily driven by the net payoff of our 2022 Credit Facility, partially offset by proceeds from our 2025 Credit Facility, resulting in a net reduction of outstanding debt.
The operating weeks calculations reflect re-acquired franchises through 2022. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects. 6 Dutch Rewards is our digitally based rewards program available exclusively through the Dutch Rewards app.
Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects. 6 Dutch Rewards is our app-based digital loyalty program. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.
Dutch Bros Inc. | Form 10-K | 83 Table of Contents Critical Accounting Estimates The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain.
See NOTE 9 — Debt and NOTE 10 — Derivative Financial Instrument for additional details related to our 2025 Credit Facility and interest rate swap contract. Critical Accounting Estimates The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain.
Dutch Bros Inc. | Form 10-K | 80 Table of Contents Other Expense Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Interest expense on finance leases $ (22,053) $ (17,516) $ (9,296) $ (4,537) 25.9% $ (8,220) 88.4% Other interest expense, net (4,967) (14,805) (8,722) 9,838 (66.5)% (6,083) 69.7% Interest expense, net $ (27,020) $ (32,321) $ (18,018) $ 5,301 (16.4)% $ (14,303) 79.4% Other income 5,812 3,018 3,976 2,794 92.6% (958) (24.1)% Total other expense $ (21,208) $ (29,303) $ (14,042) $ 8,095 (27.6)% $ (15,261) 108.7% Year Ended December 31, 2024 v. 2023 The decrease in interest expense, net was primarily driven by interest income on cash invested in money market funds, partially offset by additional interest on finance leases for new shop builds.
Dutch Bros Inc. | Form 10-K | 82 Table of Contents Other Expense Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Interest expense on finance leases $ (23,289) $ (22,053) $ (17,516) $ (1,236) 5.6% $ (4,537) 25.9% Other interest expense, net (5,016) (4,967) (14,805) (49) 1.0% 9,838 (66.5)% Interest expense, net $ (28,305) $ (27,020) $ (32,321) $ (1,285) 4.8% $ 5,301 (16.4)% Other income 2,748 5,812 3,018 (3,064) (52.7)% 2,794 92.6% Total other expense $ (25,557) $ (21,208) $ (29,303) $ (4,349) 20.5% $ 8,095 (27.6)% Year Ended December 31, 2025 v. 2024 The increase in total other expense was primarily driven by expenses associated with our credit facility refinance in May 2025 (see NOTE 9 — Debt for additional details), and a prior year non-recurring gain on sale of the Company airplane, hangar and related equipment to our Co-Founder.
In completing this evaluation, we consider all available positive and negative evidence.
We evaluate the carrying value of our deferred tax assets on a quarterly basis. In completing this evaluation, we consider all available positive and negative evidence.
Company-operated Shop Gross Profit and Contribution 1 Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Company-operated shop gross profit $259,959 $180,235 $121,327 $79,724 44.2% $58,908 48.6% As a percentage of company-operated shop revenues 22.3% 21.0% 19.0% N/A 130 bps N/A 200 bps Company-operated shop contribution 1 $346,768 $242,323 $157,633 $104,445 43.1% $84,690 53.7% As a percentage of company-operated shop revenues 29.7% 28.2% 24.6% N/A 150 bps N/A 360 bps _______________________ 1 Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Dutch Bros Inc. | Form 10-K | 79 Table of Contents Year Ended December 31, 2024 v. 2023 The increase in the company-operated shop gross profit margin of 130 basis points was driven primarily by a 270 basis point increase due to the impact of increased pricing on the comparable shop base, offset by a 140 basis point decrease due to increased labor costs.
Dutch Bros Inc. | Form 10-K | 81 Table of Contents Company-operated Shops Gross Profit and Contribution Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Company-operated shops gross profit $330,389 $259,959 $180,235 $70,430 27.1% $79,724 44.2% As a percentage of company-operated shops revenues 21.9% 22.3% 21.0% N/A (40) bps N/A 130 bps Company-operated shops contribution $436,605 $346,768 $242,323 $89,837 25.9% $104,445 43.1% As a percentage of company-operated shops revenues 28.9% 29.7% 28.2% N/A (80) bps N/A 150 bps Year Ended December 31, 2025 v. 2024 The company-operated shops gross profit margin decreased by 40 basis points.
Credit Facility JPMorgan Credit Facility On August 4, 2023, we amended our senior secured credit facility, dated February 28, 2022 with JPMorgan Chase Bank, N.A. (as amended, the 2022 Credit Facility) to increase borrowing capacity by $150 million to a total of $650 million.
Credit Facility JPMorgan Credit Facility On May 29, 2025 (the Effective Date), we amended and restated our existing $650 million senior secured credit facility, dated February 28, 2022 (as previously amended, the 2022 Credit Facility), with JPMorgan Chase Bank, N.A. as administrative agent and other financial institutions as the lenders party thereto (the 2025 Credit Facility).
Income Tax Expense Year Ended December 31, (in thousands; unaudited) 2024 2023 2022 2024 v. 2023 2023 v 2022 Income tax expense $18,435 $6,967 $2,599 $11,468 164.6% $4,368 168.1% Effective tax rate 21.7% 41.2% (15.6)% N/A N/M N/A N/M Year Ended December 31, 2024 v. 2023 The increase in tax expense was primarily driven by increased current year pre-tax income and the increase in our ownership interest of Dutch Bros OpCo, changes in state earnings mix, and its impact on deferred taxes.
Income Tax Expense Year Ended December 31, (dollars in thousands; unaudited) 2025 2024 2023 2025 v. 2024 2024 v 2023 Income tax expense $18,348 $18,435 $6,967 $(87) (0.5)% $11,468 164.6% Effective tax rate 13.5% 21.7% 41.2% N/A N/A N/A N/M Year Ended December 31, 2025 v. 2024 The decrease in the effective tax rate to 13.5% from 21.7% in the same period in 2024 is due to tax deductions related to stock-based compensation, as well as the impact of changes in state rates and apportionment of deferred taxes.
Our customers may have or in the future may have less money available for discretionary purchases and may reduce or stop their purchases of our products.
Our customers may have or in the future may have less money available for discretionary purchases and may reduce or stop purchasing our products. On a macro level, conditions, including changes in tariffs, tax laws, interest rates, inflation, commodity costs, geopolitical conflicts, and significant weather events, have created significant uncertainty in the global economy.
These increases were partially offset by lower equity-based compensation of $28.6 million.
These increases were partially offset by lower realignment and restructuring charges of $9.7 million and lower nonrecurring equity offering expenses of $1.5 million.
Estimating future taxable income is a key input in calculating the TRAs liability, and is inherently uncertain and requires judgment. In projecting future taxable income, we consider our historical results and incorporate certain assumptions. See NOTE 11 — Tax Receivable Agreements for further details.
In projecting future taxable income, we consider our historical results and incorporate certain assumptions. See NOTE 11 — Tax Receivable Agreements for further details. Dutch Bros Inc. | Form 10-K | 87 Table of Contents Non-GAAP Financial Measures In addition to disclosing financial results in accordance with GAAP, this document contains references to the non-GAAP financial measures below.
This initiative resulted in realignment activities that occurred in 2023, and restructuring activities that commenced in 2024, and are expected to continue through the first half of 2025.
Our 2024 initiative resulted in realignment activities that occurred in 2023, and restructuring activities to expand our support center operations in Phoenix, Arizona including the build out and move into our new office, that commenced in 2024, and were substantially completed in March 2025.
Removed
Key Highlights • Delivered approximately 33% total revenue growth year-over-year. • Opened 151 systemwide shops across multiple new operating areas, an increase of approximately 18% over 2023. • Launched and implemented mobile ordering in over 95% of systemwide shops. • Opened second roasting facility in Melissa, Texas, increasing the resiliency of our supply chain. • Welcomed new President of Operations, Chief Financial Officer, Chief People Officer, and Chief Technology and Information Officer.
Added
Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Non-GAAP financial measures included herein are segment contribution. EBITDA, adjusted EBITDA, and adjusted selling, general and administrative.
Removed
On a macro level, conditions, including changes in interest rates, inflation, bank failures and other events affecting financial institutions, geopolitical conflicts (such as the Russia-Ukraine war, the state of war between Israel and Hamas, and the risk of larger regional conflicts), and significant weather events (such as the recent wildfires in California), have created significant uncertainty in the global economy.
Added
Menu price increases may lead to decreases in consumer demand.
Removed
We expect these pressures to continue to affect our operating results in the foreseeable future. For example, California’s minimum wage increased to $20 per hour effective April 2024 for covered employees in our industry. Additionally, several other states that we operate in have increased their minimum wage requirements in 2025.
Added
These increases were primarily due to the impact of occupancy rates from new shops as we shift our lease types to a greater proportion of build-to-suit lease agreements, partially offset by leverage.
Removed
This was primarily due to a 40 basis point increase driven by higher repairs and maintenance, offset by a decrease of 50 basis points from the impact of increased pricing.
Added
This was primarily driven by increased coffee costs and labor costs partially offset by pricing and leverage from increased sales in the comparable shop base.
Removed
The increase in other income was primarily driven by higher remeasurement gains in the current year related to the TRAs liability and the gain on sale of our airplane and hangar.
Added
It also contains an option allowing the Loan Parties to increase the size of the 2025 Credit Facility by up to an additional (i) $230 million or (ii) 80% of EBITDAR, whichever is greater, with the agreement of the Administrative Agent and the applicable lenders party thereto.
Removed
From time to time, we may explore additional financing sources which could include equity, equity‑linked, and debt financing arrangements.
Added
On the Effective Date, we drew the full $150 million in term loan and $50 million in revolving loans under the 2025 Credit Facility, and all outstanding debt under the 2022 Credit Facility was repaid.
Removed
The 2022 Credit Facility expires on February 28, 2027 (the Maturity Date). On February 4, 2025, we drew the remaining $50 million on our delayed draw term loan facility before this portion was set to expire on February 4, 2025.
Added
Estimating future taxable income is a key input in calculating the TRAs liability, and is inherently uncertain and requires judgment. Changes in assumptions regarding future taxable income, including the application of valuation allowances on related deferred tax assets, could result in a material increase or decrease in the TRA liability in future periods.
Removed
See NOTE 9 — Debt and NOTE 10 — Derivative Financial Instruments for additional details related to our 2022 Credit Facility and interest rate swap contract.
Added
Expenses associated with 2022 credit facility refinancing Costs incurred as a result of refinancing our credit facility in May 2025, including write-off of unamortized loan costs related to the amendment and restatement of our 2022 Credit Facility, and intermediary fees and other costs related to our 2025 Credit Facility.
Removed
Non-GAAP Financial Measures In addition to disclosing financial results in accordance with GAAP, this document contains references to the non-GAAP financial measures below.
Added
The activities related to our 2025 initiative, which commenced in May 2025 and are expected to continue through the first half of 2026, primarily relate to relocation and streamlining of our remaining back-office operations to our new Phoenix, Arizona corporate headquarters.
Removed
COVID-19: Catastrophic leave Costs related to a catastrophic leave policy that provided paid leave to employees who were required to quarantine due to in-shop exposures and could not work their regular hours. The catastrophic leave program was retired in May 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeLabor Costs We have experienced minimum wage increases, which directly affect our labor costs, and other upward pressure on wage rates in several states, including in California beginning in April 2024. Additionally, several other states that we operate in have increased their minimum wage requirements in 2025.
Biggest changeLabor Costs We have experienced minimum wage increases, which directly affect our labor costs, and other upward pressure on wage rates in several states, including in California beginning in April 2024. Additionally, several other states in which we operate have enacted increases their minimum wage requirements which became effective during 2025 or will become effective in 2026.
However, sustained inflation of or substantial increases in costs and expenses, including dairy, coffee, fuel, sugar, cocoa, and packaging commodities pricing, could impact our operating results to the extent that such costs and expenses remain elevated or increase and cannot be offset by menu price increases.
However, tariffs, sustained inflation of, or substantial increases in costs and expenses, including dairy, coffee, fuel, sugar, cocoa, and packaging commodities pricing, could impact our operating results to the extent that such costs and expenses remain elevated or increase and cannot be offset by menu price increases.
Our 2022 Credit Facility carries interest at a floating rate. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities, including through the use of interest rate swaps to mitigate the potential impacts of changes in benchmark interest rates on interest expense and cash flows.
Our 2025 Credit Facility carries interest at a floating rate. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities, including through the use of interest rate swaps to mitigate the potential impacts of changes in benchmark interest rates on interest expense and cash flows.
In the future, we may or may not be able to offset these cost increases with operational efficiencies, menu price increases, or other adjustments. As of December 31, 2024, we employed approximately 17,000 hourly workers in our company-operated shops. Interest Rate Risk We have historically been exposed to interest rate risk through fluctuations in interest rates on our debt obligations.
In the future, we may or may not be able to offset these cost increases with operational efficiencies, menu price increases, or other adjustments. As of December 31, 2025, we employed approximately 22,000 hourly workers in our company-operated shops. Interest Rate Risk We have historically been exposed to interest rate risk through fluctuations in interest rates on our debt obligations.
We have been able to partially offset cost increases resulting from several factors, including market conditions, shortages or interruptions in supply due to weather or other conditions beyond our control, governmental regulations, and inflation by increasing our menu prices over the past year, adjusting our Dutch Rewards loyalty program, and making operational adjustments that increase productivity.
We have been able to partially offset cost increases resulting from several factors, including market conditions, shortages or interruptions in supply due to weather or other conditions beyond our control, governmental regulations, and inflation by increasing our menu prices over the past year, and making operational adjustments that increase productivity.
A hypothetical increase of interest rates up to 1% on our outstanding term loan as of December 31, 2024 would result in an increase in our annual interest expense of approximately $2.3 million, excluding any potential impacts of interest rate swaps.
A hypothetical increase of interest rates up to 1% on our outstanding term loan as of December 31, 2025 would result in an increase in our annual interest expense of approximately $2.0 million, excluding any potential impacts of interest rate swaps.
Dutch Bros Inc. | Form 10-K | 89 Table of Contents
Dutch Bros Inc. | Form 10-K | 92 Table of Contents
As of December 31, 2024, we had no revolving loans outstanding, and $234.7 million was outstanding on our term loan facilities.
As of December 31, 2025, we had $50.0 million in revolving loans outstanding, and $148.1 million was outstanding on our term loan facility.

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