Dutch Bros Inc., the popular drive-thru coffee chain, is gearing up to move 40% of its corporate employees from its long-established Oregon headquarters to Phoenix, Arizona. According to a recent filing, the relocation comes with a steep price tag, potentially reaching up to $41 million in total costs. The Portland Business Journal reports that Dutch Bros has outlined these costs which include "relocation, retention and transition costs, termination benefits" and additional charges for consulting and expansion of the Arizona office.
Beyond the hefty financial investment, the company is also undertaking a significant logistical effort to properly transition its employees. Starting on February 8, 2024, Dutch Bros began informing affected staff members of their options to relocate, along with details about the assistance being offered. Per the filing reported by The Portland Business Journal, those who choose not to move to Phoenix will receive transition support, while the relocation process is expected to be wrapped up by the year's end.
The decision to relocate, shared last month, aligns with the company's strategic goal to support their rapidly expanding presence in the South and Southwest markets. As reported by OregonLive, Dutch Bros communicated that being closer to a major airport is a key factor in this change. Employees that are moving with the company are set to receive bonus incentives, while severance payments will be provided to those who decide against the relocation.
In terms of financial projections, the company is expecting to shell out somewhere between $24 million and $31 million on varied expenses, with additional capital costs of $6 million to $10 million for enhancing the Phoenix facilities. According to a Dutch Bros Inc. securities filing referenced by TipRanks, these projected expenditures will be excluded from the non-GAAP financial measure of Adjusted EBITDA and are subject to the usual fiscal uncertainties that could lead outcomes to differ from current predictions.
Dutch Bros CEO Christine Barone, who resides in Arizona, plans to divide her time between the two states, balancing the company's leadership presence. Despite the move, the company has confirmed it will maintain its headquarters in Grants Pass, Oregon, the town where it was founded by brothers Travis and Dane Boersma. As highlighted by the company's recent performance report, Dutch Bros continues to experience significant growth, boasting a revenue increment of 36% through the first nine months of 2023 when compared to the year prior, according to data shared by OregonLive.
