Philz Coffee’s Bittersweet Sale

Amie Ahn
Sep 24
3 min read

Updated: 1 day ago

By Liliana Chai Sept. 24, 2025

On the corner of 24th and Folsom Streets of San Francisco during the 1970s, one man started a tiny supermarket selling the nation’s cheapest milk and beer—but he dreamed of leaving behind more than just a legacy of liquor. Phil Jaber and his son Jacob Jaber, the founders of Philz Coffee, began with a simple vision: to make the best coffee possible. For seven years, Phil visited thousands of stores and experimented endlessly before finally perfecting his first blend Tesora.

What began as a single corner cafe has grown into a coffee empire with over 70 locations across the United States, including cities like Chicago, Boston and Washington D.C. According to CoffeeGeek, the company’s success is attributed to its culture built around customer service and personalized coffee experience. Meaningful conversations and connections are nurtured when Philz baristas curate the store's signature pour-over style coffees right in front of their customers. In addition, Philz Coffee fosters community bonds through supporting local events and partnering with neighborhood organizations such as the San Francisco LGBT Center.

Following decades of growth and expansion, Philz Coffee was sold for $145 million to Freeman Spogli & Co., a private equity firm and investor in consumer services, on Aug. 6. As part of the transaction, former employees who had purchased company stocks during their time at Philz lost the values of their shares. In interviews with Mission Stock, ten former staff shared that their stocks previously worth tens of thousands of dollars are now worthless and invalid, since the acquisition terms only recognized stocks of current employees.

Despite these losses, no current employees will be laid off, and all locations will remain open. Philz Coffee, with support from Freeman Spogli & Co., issued a pre-tax $525 “thank you” bonus to all current baristas to appreciate their work during the sale. Freeman Spogli’s CEO Mahesh Sadarangani has personally visited 40% of stores since the acquisition and noted in a statement to Mission Local on Aug. 13 that the bonus was well-received by all team members.

“Since food has the power to bring people together, an idealistic goal for food companies could be to build a community through their products. Still, Philz is a business, so their potentially profit-driven decision is understandable,” Junior Avani Narasimham said.

Current and former employees have said that Philz’s cultural landscape began shifting in the late 2010s as private equity investments poured into the company, per KQED News. Before that, teams across locations maintained close-knit relationships with each other and with the founders, Phil and Jacob Jaber. The sale has raised concerns about whether Philz can maintain its signature community-focused identity, with some fearing that increased corporate oversight may shift priorities toward profits rather than culture—a trend increasingly common as private equity firms invest in local food and beverage companies.

“This decision feels disappointing for the community, since many people prefer to support local businesses that invest in their neighborhoods. At the same time, being under a larger company might allow Philz to expand more quickly than it could have independently,” Senior Sophie Yu said.

As Philz Coffee moves forward under new ownership, the impact on its culture and community-focused identity remains uncertain. The ways the company navigates this next chapter holds the power to influence both its reputation and reactions from the communities it serves.

About the Contributors

Liliana Chai

staff writer

Liliana Chai is a junior at Leland High School and the page editor for Investigative Report and Science and Tech. This is her third year in journalism. She likes to listen to music, hang out with friends, sleep, and binge watch shows during her free time.