From salads to coffee? Dutch Bros could take over closed Salad and Go spots

Although many are surely reeling from the loss of Salad and Go, coffee lovers can find a sliver of hope: Dutch Bros could take over all the now-closed drive-thrus that once sold salads.

Salad and Go, along with its related companies, filed for Chapter 11 bankruptcy on Tuesday in federal bankruptcy court in Houston. As part of the case, the company is asking the court to approve the sale of key lease assets.

The proposed buyer is Dutch Bros, and the purchase price is $105 million in cash. The proposed sale would include 51 drive-thru leases in Arizona and Nevada, as well as 14 leases in Texas and Oklahoma.

If the deal goes through, some drive-thru salad spots could eventually become coffee stands.

The two companies entered into an asset purchase agreement on Tuesday.

Why is Dutch Bros the proposed buyer of Salad and Go leases?

According to a court filing, Dutch Bros was chosen as the proposed buyer because it has the financial strength and business model to take over the leases.

The filing says Dutch Bros is a publicly traded company that generates more than $1 billion in annual revenue. Its 30-year history and roughly 25% annual revenue growth were also cited as factors.

The company operates more than 1,177 drive-thru locations in more than 25 states. Its stores are typically 800 to 1,500 square feet and have double drive-thru lanes, a setup that closely matches the closed Salad and Go locations.

There were not many qualified buyers for closed Salad and Go stores

A big factor in the decision to tap Dutch Bros as a potential buyer is the fact that Salad and Go restaurants were compact drive-thru sites. Since they lacked full kitchens, hood systems, grills or fry equipment, the number of companies that could easily move into the spaces was limited.

According to the filing, Salad and Go screened 16 potential buyers using criteria that included:

• A drive-thru business model
• At least 300 locations
• A small-store format with no hood system
• More than $100 million in available funding
• Plans to operate in the Phoenix market
• The ability to open more than 100 locations a year

Only three operators nationwide met all of the criteria, and one of those was not interested in the full portfolio, according to the filing.

Dutch Bros was ultimately selected because its drive-thru-only model, store size and financial backing made it one of the few companies that could realistically take over the leases.

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