San Francisco’s beloved coffee chain Philz is about to undergo a major transformation that’s leaving many longtime fans and employees feeling nostalgic and disappointed.

The homegrown coffee brand, started by Palestinian immigrant Phil Jaber in 2003 from a small bodega in the Mission District, will be sold to Los Angeles-based private equity firm Freeman Spogli & Co. for $145 million. This acquisition marks the end of an era for a company that was once a quintessential San Francisco success story.

Philz became famous for its highly customizable pour-over coffees with unique flavors like mint mojito and gingersnap. At its peak, the company had expanded to over 40 locations across California, Chicago, and Washington, D.C., embodying the ambitious startup spirit that defines the Bay Area.

However, the company’s trajectory has been anything but smooth in recent years. After the Jaber family stepped away from day-to-day operations in 2021, Philz began to contract. The company closed its Washington, D.C. locations in early 2023 and shuttered its original Mission District shop that same summer. By early 2024, they had even relocated their headquarters from San Francisco to Oakland.

The upcoming sale has been particularly painful for employees who invested in company stock. Some workers reportedly spent up to $10,000 on stock options that will now be essentially worthless in the acquisition, a stark reminder of the financial risks inherent in startup culture.

This sale continues a trend among local coffee chains, mirroring similar acquisitions like Nestle’s majority stake in Blue Bottle and leadership changes at Sightglass. It represents another chapter in San Francisco’s evolving startup ecosystem, where innovative local businesses often end up being absorbed by larger corporate entities.

As Philz prepares for this transition, many in the Bay Area are left wondering about the future of this once-vibrant local brand and what this sale means for the city’s entrepreneurial spirit.