When Salad and Go filed for bankruptcy in August, it already
had a buyer.
Dutch
Bros had agreed to pay $105 million for as many as 65 of the failed chain’s
drive-through locations. But rival 7 Brew was also interested in the properties
and objected to the private deal. Should the bankruptcy court switch to negotiations with 7 Brew? Instead it approved
an
auction between Dutch Bros and 7 Brew. On August 31, 2026, Dutch Bros announced
that it would not raise its offer, and 7 Brew emerged as the winner. After
adjustments to the number of leases included in the transaction, the court
approved a
sale
of 63 locations to 7 Brew for about $123.5 million—roughly $18.5 million
more than the original Dutch Bros deal.
Sellers should prefer auctions to simply negotiating with a
willing buyer. In bilateral bargaining, Dutch Bros has every reason to convince
Salad and Go that $105 million is about as high as it will go. But the arrival
of another bidder changes the negotiation. Instead of the seller having to
determine how much each buyer is willing to pay, the buyers reveal information
about their valuations by competing against one another. Indeed, Dutch
Bros ultimately chose not to increase its offer, effectively revealing
where further bidding stopped making sense for it. Buyers naturally prefer to
negotiate without a competitor standing beside them. Sellers prefer exactly the
opposite.
