Additional Information - Philz Coffee

Who is Freeman Spogli?

Freeman Spogli is a growth-focused private equity firm headquartered in Los Angeles that has been partnering with management in growing consumer and distribution companies since 1983. They have backed several great consumer brands including Boot Barn, El Pollo Loco, First Watch, Floor & Decor, and Popeyes Chicken, among many others.

What plans does Freeman Spogli have for the company?

Freeman Spogli intends to preserve and build upon Philz Coffee’s rich history, maintaining the unique, authentic coffee experience that has made the brand so special for over two decades. Freeman Spogli believes we are poised for growth in both existing and new markets, and that this new partnership will help accelerate that journey. Freeman Spogli supports our multi-channel growth strategy, including new stores, wholesale and online.

Will there be job cuts, pay changes, and store closures?

No. We want to reassure all employees that we have no plans to make any changes to the team. It is expected that benefits, pay, raises, hours, and promotions will continue as the company has operated historically. There are no plans to close stores, and in fact we have an exciting pipeline of new store openings planned over the next 24 months.

How many employees who invested in your company lost their money and/or stock options as a result of this transaction? 

A total of 10 former employees who chose to invest in Philz Coffee by buying common stock years ago at much higher prices than the current price of the shares will unfortunately lose the value of that stock. There are no other Philz Coffee common stockholders or broader group of Philz common stockholders who were affected by the transaction and no current employees are Philz common stockholders who were affected by the transaction.

Additionally, out of our approximately 1,500 current employees, 47 were granted stock options (the right to buy stock at a certain price in the future) in 2022 and earlier that are not exercisable based on the current price of the shares.  Unfortunately, those options will expire per their original terms, but since the employees did not buy stock, they did not lose any money.

Will current team members at Philz Coffee make any money from this transaction?

Philz Coffee, supported by Freeman Spogli, will be paying a thank you bonus to each and every team member in our stores, roasting facility, and home office.

What is happening to the current Philz Coffee leadership team?

The entire corporate leadership team will be staying on. We are excited to pursue this next chapter together.

Did the CEO make money off the transaction?

The CEO will receive compensation and proceeds in connection with the transaction, and he will be reinvesting 100% of his after-tax proceeds from the transaction back into the company.

Why did you sell to private equity?

Philz Coffee has been owned in part by private equity firms for the past 13 years, so this is not a change for the company. Private equity firms invest in businesses to help them scale their operations and grow. We chose to partner with Freeman Spogli due to their commitment to preserving our rich culture, investing in our team, and supporting our constant focus on quality.