🧑⚖️ Am I going to be writing about Salad and Go‘s bankruptcy for the rest of this year? It sure seems like it. The latest developments happened Tuesday in a Houston bankruptcy courtroom, where the fight over who gets to turn all those drive-thrus into coffee stands got messier – and a lot more interesting.
If you’re just tuning in
Salad and Go filed for Chapter 11 on Aug. 4, and the plan was straightforward: sell the real estate and leases for 65 locations to Tempe’s own Dutch Bros for $105 million. Dutch Bros has already put down a $10 million deposit. Simple enough, right?
Not so fast. Arkansas-based 7 Brew, another drive-thru coffee juggernaut, says it was in the mix the whole time and actually offered more money than Dutch Bros did. 7 Brew’s lawyers have made it clear they’re prepared to sue if the Dutch Bros deal goes through without them getting a real shot.
What happened Tuesday
Salad and Go’s attorney, Omar Alaniz, told the judge that 7 Brew has kept coming back to the table with new proposals, and that the company’s board has been weighing each one carefully. Alaniz laid out three ways this could go:
- Push forward with Dutch Bros as planned, but expect 7 Brew to ask the court to block it and force an auction instead.
- Get Dutch Bros to agree to an auction for the 65 sites.
- Hold an auction without Dutch Bros’ blessing, which would probably mean Dutch Bros walks.
None of those options are exactly clean, and Alaniz didn’t pretend otherwise, describing the board’s decision-making as an ongoing balancing act between risk and value. A hearing on the original Dutch Bros sale is set for Sept. 1, so we’ll know more soon.
In the meantime, the judge did approve something less contested: an auction for the other 82 Salad and Go leases across Arizona, Nevada, Texas, and Oklahoma that aren’t part of the Dutch Bros deal.
Those will be split into two auctions – Arizona/Nevada on Oct. 1 and Texas/Oklahoma on Oct. 2. Salad and Go says it expects both Dutch Bros and 7 Brew to bid on those too, along with the company’s furniture, equipment, and even the Salad and Go name and recipes.
Letters of intent for early ‘‘stalking horse’’ bids – a court-approved baseline offer that sets the floor price for the auction, with other bidders free to top it once the real bidding starts – are due Aug. 28.
Who has the advantage?
Based on the Dutch Bros locations in nearly every Valley neighborhood, compared to 7 Brew’s zero Valley locations at the moment, you might think this is a classic David and Goliath story. But zoom out to the national numbers, and the picture gets a lot murkier.
Dutch Bros is coming off a monster year. The company closed out 2025 with 1,136 locations across 25 states and posted $1.64 billion in revenue, up nearly 28% year over year.
It’s publicly traded, profitable, and guiding investors to expect $2 billion-plus in revenue for 2026, with plans to open at least 181 more shops this year on the way to a goal of over 2,000 locations by 2029.
7 Brew is younger and scrappier by comparison, but this is private-equity-backed scrappiness. Founded in Arkansas in 2017, 7 Brew has ballooned to somewhere north of 700 locations in 38 states, fueled by a major growth investment from Blackstone.
7 Brew already has two Tucson locations and inked a franchise deal last year to expand into the Phoenix market.
Neither of these companies is a little guy.
What’s next?
Mark your calendars:
- Aug. 28: Deadline for stalking horse bid letters on the 82 non-Dutch-Bros leases.
- Sept. 1: Court hearing on the original 65-location Dutch Bros sale, where 7 Brew’s objection is expected to come to a head.
- Sept.17: Stalking horse bids announced.
- Oct. 1-2: Auctions for the remaining 82 leases.
Whether the original Dutch Bros deal survives intact, gets forced into an auction, or falls apart entirely depends a lot on what happens between now and Sept. 1.
Given how aggressively both coffee chains are chasing empty Salad and Go buildings, don’t expect either side to back down quietly. This fight clearly isn’t over.
📧 Subscribe to the free MXSW Daily Email here for the latest news about food & drink in the Phoenix metro area.
