Dane and Travis Boersma started Dutch Bros with no knowledge of espresso and grew it into a $500 million IPO.
Dutch Bros expanded through franchising but had to pause growth in 2008 to focus on quality and brand principles.
Dutch Bros prioritized hiring from within and offered employees opportunities to become business owners.
Deep dives
The Birth of Dutch Bros and the Early Years
Travis and Dane Borsma, brothers who were entrepreneurial and had a passion for coffee, started Dutch Bros in Grants Pass, Oregon. They began with an espresso cart and quickly grew, opening more locations through franchising. However, the early years were not without challenges, including a fire that destroyed their inventory and equipment, and Dane's health issues, eventually leading to a diagnosis of ALS. Despite personal struggles, Travis was determined to keep the business afloat and provide for Dane's family.
Expansion and Franchising
As Dutch Bros continued to grow, they expanded their operations by offering franchise opportunities. Franchise owners would invest in fully equipped mobile units, buy beans from Dutch Bros, and pay royalties. This model allowed Dutch Bros to expand rapidly, opening 40 more locations in four years. However, in 2008, due to economic conditions and the need to maintain quality control, Dutch Bros made the difficult decision to pause franchise growth.
Challenges and Decision-Making in 2008
In 2008, Dutch Bros faced significant challenges, including the real estate bubble burst and the need to reevaluate their growth strategy. They made the tough decision to stop franchise expansion and focus on maintaining the brand's quality, values, and principles. This required making difficult choices and drawing a line in the sand. Despite these challenges, Dutch Bros remained committed to providing the best experience for their customers and supporting their franchise owners.
The Challenges of Starting a Coffee Cart Business
In 1992, Travis and Dane started selling espresso drinks from a push cart in Oregon. They faced obstacles, including an angry grocery store owner who wanted them gone. However, they convinced him to let them stay for a month, and their business started to grow.
Transitioning to a Drive-Through Model and Innovating with Drinks
As their coffee cart business expanded, Travis and Dane opened a drive-through location and introduced the Rebel energy drink. They experienced significant growth and decided to focus on company-owned stores. They also developed a franchise model that prioritized hiring from within the company, providing opportunities for employees to become business owners.
From a coffee cart parked uneasily in a grocery parking lot, Travis and Dane Boersma grew Dutch Bros into a sprawling chain of 700-plus beverage restaurants. Before they got started in Grants Pass, Oregon, in 1992, Dane had never tried espresso, and neither brother knew how to make it. But with the help of nearby experts, they learned the craft—and even improvised their own recipes, like mocha made with chocolate milk from a local dairy. Eventually, Dutch Bros would go from pushcarts to drive-throughs, and from small-town Oregon to Wall Street—with a nearly $500-million IPO in 2021. Along the way, the brothers’ special connection carried them through good times and bad, until an unexpected family tragedy shook the business to its core.
This episode was produced by Alex Cheng, with music by Ramtin Arablouei
Edited by Neva Grant, with research help from Katherine Sypher.