That changed following its 2021 IPO. What had historically been a regional concept began evolving into a national expansion story, with management increasing its long-term store opportunity from ~4,000 locations to more than 7,000. In the nearer term, the company is targeting ~2,000 shops by 2029, effectively doubling its current footprint.

Today, Dutch Bros operates ~1,100+ locations across 25 states, with a footprint that remains heavily concentrated in its core markets, roughly 40% of stores are located in Texas and California. Expansion has been both dense and directional: the company continues to “fortress” existing markets by opening new units near high-performing locations to increase throughput, while simultaneously pushing into newer regions, particularly across the Southeast.

The result is a business in transition, from a regional brand built on culture to a national operator defined by execution.

While Dutch Bros began franchising in 2000, the system that exists today looks very different from what one might expect of a traditional franchise model. Over time, management made a series of deliberate decisions that reshaped not just how the company grows, but who is allowed to grow with it.

The first inflection point came in 2008. As the footprint expanded, co-founder Travis Boersma identified a problem that does not show up neatly in a financial model: many external franchisees, despite being well-capitalized, lacked what the company calls “Dutch Luv”—the high-energy, community-driven culture that defines the brand at the store level. Rather than optimize for faster unit growth, management chose to protect the culture. From that point forward, new franchisees were required to have at least three years of experience within the system, effectively introducing a cultural filter into the growth equation.

Nearly a decade later, the company took that logic to its natural conclusion. In 2017, Dutch Bros eliminated franchising altogether—even for internal candidates—and shifted to a fully company-owned model. Today, roughly ~71% of stores are company-operated, and all future growth will follow the same path.

What began as a franchise system has gradually evolved into something closer to a vertically controlled operating model, one where consistency, culture, and execution are prioritized over the capital-light appeal of franchising.

To understand Dutch Bros, it helps to start with what it is not.

Unlike incumbents such as Starbucks, which built their identity around the “Third Place” coffeehouse experience, Dutch Bros has become something quite different: a drive-thru beverage concept optimized for a different customer and a different occasion.

At its core, the brand is heavily skewed toward younger consumers. Roughly ~65% of its customer base falls within the 18–34 age range, which matters not just because of the concentration, but because of what it implies about the nature of demand. These consumers are not necessarily approaching beverages as a daily ritual in the traditional sense; increasingly, they are treating them as a form of expression, something closer to “edible entertainment” than a simple cup of coffee. That distinction shows up clearly in the mix: nearly ~90% of transactions are cold beverages, often highly customized, visually oriented, and designed to be shared, both physically and digitally.

This also helps explain the company’s product strategy. Offerings like its proprietary energy drink line are less about replacing the morning coffee and more about capturing incremental occasions, particularly the afternoon pick-me-up. Dutch Bros is not really competing head-on for the 7:30 AM commuter. It is building a business around the 2:30 PM consumer.

That positioning is reinforced by where (and how) the company operates. Rather than targeting dense urban centers, Dutch Bros has leaned into suburban markets, typically in middle- to upper-middle-income corridors. The model is built around convenience: small-format, drive-thru-centric locations designed for speed and throughput, not dwell time. The customer is often already in their car, and the visit is inherently transactional, whether that is a parent with kids in the backseat or someone making a quick stop between errands. In that context, the absence of a traditional coffeehouse environment is not a weakness. It is the point.

One of the more underappreciated aspects of the model is day-part mix. While legacy competitors derive the bulk of their volume in the morning hours, Dutch Bros generates the majority of its revenue after 10:00 AM. The visit is less about necessity and more about indulgence—a small, repeatable treat that typically falls in the $5–$8 range.

That distinction matters. In periods of consumer pressure, this type of affordable luxury often proves more resilient than higher-ticket discretionary spend. Customers may delay larger purchases, but they are less likely to give up the daily—or weekly—reward.

One of the clearest differences between Dutch Bros and Starbucks shows up in something as simple as when customers show up. At first glance, that might seem like a minor detail. In reality, it speaks to a deeper difference in how consumers perceive each brand. For Dutch Bros, the business is increasingly anchored around energy, not coffee. Products like Blue Rebel and the broader Refresher lineup are built for the afternoon occasion, the moment when consumers are looking for a second wind, not their first. As a result, traffic builds throughout the day, with peak demand often occurring in the mid-to-late afternoon as students leave school and workers look for a pick-me-up. By contrast, Starbucks remains tethered to its core identity: coffee. And coffee, by its nature, is tied to routine. The demand curve follows a fairly predictable pattern, heavy in the early morning hours, tapering as the day progresses, aligned with the rhythm of consumers seeking their first dose of caffeine.

Starbucks captures the habit. Dutch Bros is capturing the craving.

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