Philz Coffee Employees Left In The Cold After Stock Options Vanish Post-Acquisition

Philz Coffee, a popular coffee shop that started in the heart of San Francisco’s Mission District, has been sold for $145 million to private equity firm Freeman Spogli. The shop, which was founded in 2003 by Phil Jaber and his son Jacob, began as a humble corner store and today operates 77 cafes across California and Chicago. According to a press release, the current corporate leadership will remain during the transition. 

“This is an exciting new chapter for Philz as we expand and continue our mission to deliver a high-quality, personalized coffee experience to our loyal customers,” said Sadarangani. “Freeman Spogli’s deep experience in the consumer and restaurant sectors, along with their collaborative approach, makes them an ideal partner as we look to expand our footprint and continuously improve our offerings. We’re proud of the strong foundation we’ve built and look forward to accelerating our growth together.”

Although the Philz Coffee website states that Freeman Spogli doesn’t intend to cut jobs or close stores, and plans to pay workers a “thank you” bonus, some employees aren’t as excited about the acquisition. Bay Area news reporter Wilson Leung states that part of the deal strips stock holdings from former and current employees. Specifically, ten former employees and 47 current ones will lose their stock holdings. 

The former workers had purchased common stock at a higher price than the current shares years ago. The company hasn’t shared the reason why the former and current employees will lose their stock options. 

Philz closed its original Mission District Cafe in 2023 after 20 years and relocated to Oakland, which long-time customers say was a sign that things were shifting. A former Philz wholesaler told Mission Local that the culture has changed over the last five years, suggesting that it feels less like a tight-knit neighborhood cafe and more corporate, per SFGATE.