stockrowWhat it does
Dutch Bros operates and franchises beverage shops, primarily serving customers through drive-thrus. Its drinks are made to order and can be customized with flavors, milk alternatives, toppings and other additions. Customers can also use walk-up windows or order ahead through the company’s app.
The menu includes hot, iced and blended coffee drinks, including cold brew and the company’s Freeze blended beverages. Dutch Bros also sells drinks made with its proprietary Rebel energy drink, as well as teas, lemonades, smoothies and sodas. It offers food alongside beverages. The company imports and roasts its own coffee beans, while Rebel is made through a co-bottling and co-packaging relationship.
Most shops are designed for customers to take their orders away rather than sit inside. Employees, known as broistas, make drinks and serve customers at the window. At busy shops, employees may also take orders from cars in line using tablets.
Dutch Bros was founded in 1992 and is headquartered in Grants Pass. Christine Barone is its chief executive officer and president. The company operates shops itself and works with franchise partners that operate their own locations under the Dutch Bros brand. By Q3 2026, the company had rolled out its hot food program across company-operated shops.
How it makes money
Dutch Bros earns revenue from drinks and food sold at its own shops and from its relationships with franchise partners. It has two reporting segments: company-operated shops, and franchising and other. Company-operated shops generated $1.5 billion in FY2025, representing 92.1% of revenue. Franchising and other generated $128.8 million.
FY2025 revenue was $1.6 billion; Q3 2026 revenue increased 30%.
At company-operated shops, revenue depends on the number of locations, customer transactions and the amount customers spend per visit. In 2025, revenue from company-operated shops increased through both new locations and higher sales at shops in the comparable base. The company has increased menu prices to help offset wage pressure, although it recognizes that higher prices can reduce demand.
Franchise partners operate their own shops. Dutch Bros receives royalties and marketing fees linked to franchise sales and sells products to franchisees. Sales made by franchise shops are revenue to those partners, not Dutch Bros revenue. The company licenses its trademarks through franchise agreements and requires partners to buy supplies and equipment from approved vendors.
Repeat visits are supported by the Dutch Rewards app, where customers earn points redeemable for drinks. Customers can preload funds, pay through the app and order ahead. In Q3 2026, approximately 74% of customer visits were through Dutch Rewards. The company uses customer data to target offers and says loyalty initiatives made an incremental contribution to sales performance in the quarter.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Company-operated shops | $1.5 billion | 92.1% | 29.5% |
| Franchising | $122.0 million | 7.45% | 11.3% |
| Other | $6.8 million | 0.41% | 21.7% |
Customers and how it sells
Dutch Bros serves customers seeking coffee, energy drinks and other beverages, including people who want caffeine-free options. Customers can customize drinks for preferences including sugar-free and dairy-free. The company also offers food for customers who want it with a beverage.
As of December 31, 2025, the system had 1,136 shops across 25 states: 811 company-operated and 325 franchised. By Q3 2026, its total shop count had reached 1,273. The company develops new regions with company-operated shops while encouraging franchisees to add locations in their existing operating areas.
Approximately 85% of the business is conducted through drive-thrus, with the remaining 15% at walk-up windows. Customers ordering ahead can collect their drinks at either the drive-thru or walk-up window. Order Ahead represented approximately 17% of customer visits in Q3 2026. Dutch Bros is also piloting delivery with DoorDash in several markets.
Dutch Rewards gives members points they can redeem for drinks or share with others. The company uses the app to communicate with customers and tailor offers. It said it was seeing strength among Gen Z customers and in the morning in Q3 2026.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Company-operated shops | $1.5 billion | 92.1% | 29.5% |
| Franchising and other | $128.8 million | 7.86% | 11.8% |
Suppliers and costs
Dutch Bros works with third-party importers and exporters to buy green coffee beans from Central and South America. It roasts coffee at facilities in Grants Pass, Oregon and Melissa, Texas, then ships blends to distributors serving company-operated and franchised shops. The company typically holds approximately three months of green coffee inventory and has identified alternative beans for its blend if an origin is disrupted.
The company also sources dairy, syrups, packaging and other ingredients. It seeks multiple sources for key commodities, including dairy. Rebel is made through a co-bottling and co-packaging relationship; it was reported on 27 October 2026 that Dutch Bros relies on Portland Bottling Co. and Lieb Foods for the drink.
Shop costs include ingredients, packaging, labor and occupancy. In 2025, coffee costs contributed to higher beverage, food and packaging costs as a share of company-operated shop revenue. Labor costs fell as a share of revenue, with pricing and sales leverage partly offsetting higher wages. Occupancy costs rose as the company shifted more leases toward build-to-suit agreements.
Dutch Bros expects minimum-wage increases to continue affecting results. In Q3 2026, it also experienced elevated utility and freight costs and expected those costs to remain elevated into Q4.
- Revenue$1.6B
- Cost of revenue−$1.2B
- Selling, general and administrative−$262.8M
- Operating income$161.2M
Competitive position
Dutch Bros competes with national and regional coffee chains, local specialty coffee shops, regional drive-thru beverage chains, quick-service restaurants and convenience stores. Shops compete on convenience, taste, price, quality, service, labor and location. It was reported on 27 October 2026 that Starbucks and McDonald’s are competitors. Seven Brew competes in drive-thru beverages; Dutch Bros said its average unit volumes were consistent across different distances from Seven Brew in states where both had a substantial presence.
Dutch Bros offers made-to-order drinks with many combinations of flavors and modifiers. It believes customization helps create a competitive moat. The company also owns trademarks including Dutch Bros and Dutch Bros Rebel, and licenses its marks to franchise partners.
Our reading: Customization and the brand provide some differentiation, but similar beverage formats and competing chains limit the evidence that either is difficult to replicate.
The company uses its loyalty app to communicate directly with customers and tailor offers. Dutch Bros says research found it performed above the coffee industry average on measured aspects of guest experience. Our reading: The app and service model can support repeat visits, though customers can still choose other outlets and the research does not establish the durability of that advantage.
Drive-thru lanes, order-ahead integration and walk-up windows support the company’s convenience strategy. Our reading: Those operating features help serve customers, but the evidence does not establish an exclusive advantage over other drive-thru operators.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Seven Brew | Drive-thru beverages in shared markets | High |
| Starbucks | Coffee and beverage customers | High |
| McDonald’s | Quick-service food and beverage customers | High |
Growth opportunities
Dutch Bros plans to grow its shop base through both new markets and denser coverage of existing ones. It expects the majority of new shops to be company-operated, while franchise partners continue to add shops in their operating areas. The company targets a “mid-teens” annual new shop growth rate.
In Q3 2026, Dutch Bros opened 48 system shops. It expects to open approximately 250 system shops in 2027 and says it has visibility into the real estate pipeline needed for its goal of 2,029 shops in 2029. It was reported on 4 November 2026 that the company completed the reacquisition of 32 franchise locations in Phoenix’s East Valley on July 27, 2026.
Growth plans also include more customer visits at existing shops. The company is developing targeted loyalty offers, expanding order-ahead use and piloting delivery. It says customer data helps it identify opportunities among less-frequent visitors.
Food is another area of expansion. The hot food program has been rolled out across company-operated shops, and Dutch Bros is testing additional items. The company also plans a refreshed matcha platform in 2027. For new shops, it is shifting toward more build-to-suit leases; it says that shift has reduced upfront capital spending per shop, while it expects higher occupancy costs.
- $497.9MFY2021
- $739.0MFY2022
- $965.8MFY2023
- $1.3BFY2024
- $1.6BFY2025
- $2.1BFY2026 guidance
Structural risks
- Consumer demand: Changes in tastes or discretionary spending can affect sales. Dutch Bros experienced heightened customer volatility in Q3 2026 and said rising gas prices could have contributed to it.
- Costs and supply: Coffee, milk, syrups, labor and construction costs can rise, while supply-chain disruptions can affect availability. The company expects elevated coffee prices to affect results into 2027 and says price increases may reduce demand.
- Expansion execution: Opening shops depends on finding suitable drive-thru sites, securing leases and permits, obtaining financing and hiring and training staff. Construction delays or cost overruns can affect openings.
- Market density: New shops can transfer sales from existing Dutch Bros locations. The company said its development pipeline in existing states could result in an elevated level of this sales transfer in 2027.
- Brand and competition: The company’s success depends substantially on its brand. It also competes for customers, locations and labor with a range of beverage and food-service businesses.
- Financial obligations: At December 31, 2025, Dutch Bros recognized $821.0 million of liabilities under tax receivable agreements. Those liabilities can change with assumptions including future taxable income and tax rates.
Bottom line
Our reading
Our reading: Dutch Bros is primarily a company-operated beverage retailer, supplemented by franchise royalties and product sales, with growth tied to adding shops and encouraging repeat visits. Its loyalty program and drive-thru format support that model, while commodity and labor costs, the capital needed for expansion, and sales shifting between nearby shops remain important exposures.