Philz Coffee completes 145M sale to private equity firm, leaves tips for baristas

Philz Coffee has finalized its sale to Freeman Spogli & Co. for $145 million, announced on August 6, 2025. This deal cancels existing common stock and stock options, impacting ten former employees who invested significantly in the company. Despite the acquisition, the company confirmed that no employees would be laid off and no stores would close, with bonuses for current staff depending on their rank. CEO Mahesh Sadarangani pledged to reinvest all proceeds from the sale back into the company.

However, former employees have raised concerns about a declining company culture, citing management's recent decisions. Chris Watts, a former manager, highlighted issues with payroll practices, including withholding earned bonuses. This transaction continues Philz's relationship with private equity, as the company has been partly owned by such firms for 13 years. The sale follows significant investments from Summit Partners and TPG Growth, who will also receive proceeds from this latest transaction.