Sweetgreen

• Sweetgreen (NYSE: SG) is a US fast-casual salad chain of roughly 285 restaurants. Despite having no international presence, the company boasts a ~$1bn market cap. Yet, after its first full year of adjusted EBITDA profitability in FY2024, it has gone sharply into reverse, with a FY2025 net loss of about $134m and a same-store sales decline of 12.8% in the first quarter of 2026, its steepest since the 2021 IPO.
• On the surface, its decline in the U.S. negates any argument for international expansion. A successful turnaround returns the company to a maturing home market, whereas expansion opens a new growth vector. If so, London is the natural first market, where the premium health-led lunch occasion exists at close to Manhattan intensity and is becoming increasingly embedded in the city’s lunchtime culture. The food-to-go category is forecast at £24.9bn in 2026 and growing faster than the wider eating-out sector, with quality now overtaking value as the leading purchase driver.
• For context: the US brands that entered organically have stayed small—such as Chipotle reaching only around 19 sites since 2010—while those that entered through a local operating partner have scaled fast. Wingstop UK, for example, has reached 57 sites and a £150m revenue run-rate under a master franchisee before selling for more than £400m. Conversely, Popeyes UK grew from £58m to >£118m revenue in a year.
• The binding constraint on a company in a turnaround is management attention rather than cash, and a first foreign market consumes attention more than capital. As such, this reframes the structure question as “which party has to learn the UK?” rather than “cash versus stock?”. In my view, a hypothetical market entry should be a merger that leaves a local founder team running the business as owners, in preference to a greenfield build, to a master-franchise of an unknown-in-the-UK brand, and to a clean cash acquisition that puts the learning back onto Sweetgreen.
• In theory, Sweetgreen would be buying operating proof, a validated copy of its own concept familiar with London’s operational mechanics, including site pipeline and landlord relationships. Notably, the decisions to expand and/or merge sit squarely with the founders, who through a dual-class structure hold a majority of the voting power and control over any change of control, so the move depends on founder conviction rather than on a board that might insist on domestic focus.
• On inferred figures I would expect an enterprise value of roughly £60m–£120m (~$80m–$160m), in line with the 2.7x revenue that Wingstop UK fetched, structured predominantly in Sweetgreen stock with founder rollover and an earn-out, with the cash-versus-equity split outlined below.

The Company

Background

Sweetgreen was founded in 2006 and 2007 by Jonathan Neman, Nicolas Jammet and Nathaniel Ru, three Georgetown classmates who opened a 560-square-foot salad shop in Washington DC three months after graduating, and it now operates more than 250 restaurants across 24 states and the District of Columbia, listed on the New York Stock Exchange since November 2021. The product is a customisable, made-from-scratch bowl built around vegetables and a protein, sold to white-collar workers in dense urban markets at lunch. New York is the single largest city, and the legacy markets of Los Angeles, New York, Boston, Chicago and Washington DC anchor a patient, density-led, market-by-market build run by the company’s own development team, which is a model that relies on brand recognition migrating between American cities and on an estate the company opens and operates itself rather than through franchisees.

Sweetgreen has noticeably never operated outside the U.S., nor has it ever franchised, so it has neither foreign operating experience nor any franchising apparatus to lean on in a market where the brand is unknown. Additionally, the menu is narrow and premium by design, made from scratch and kept under 800 calories with no added sugar, which is the source of the chain’s cultural standing and also the reason its addressable demand is concentrated in affluent, urban, health-led lunch rather than the broad fast-food market. Put simply: the concept is evidently portable to another global city of that profile, what is less clear is whether the operating muscle to execute exists.

Financials

As a public company the headline figures are reported rather than inferred, though the forward path is a matter of judgement. FY2024 was the high-water mark, the year management described as its first full year of adjusted EBITDA profitability, with revenue near $677m, same-store sales up 6% and a restaurant-level profit margin of 19.6%. I consider this to be the baseline given the rapid reversal ever since.

Consider FY2025, for example: full-year revenue was broadly flat at ~$680m, but the net loss deepened to >$130m, loss from operations was ~$139m, adjusted EBITDA turned negative, the full-year restaurant-level margin compressed to 15.2% from 19.6%, and Q4 showed a same-store sales decline of 11.5% with the quarterly margin falling to 10.4%. Q1 2026 was worse on the top line, with revenue of $161.5m, a same-store sales decline of 12.8% and traffic down 11.2%. Note that I have decided to discount the reported net income of $125.8m in that quarter, since it was driven by a one-time gain on the sale of Spyce to Wonder Group following its 2021 acquisition, rather than operations.

The sale of the Spyce robotics business to Wonder for $186m, including $100m in cash, was completed just after year-end and sat against a cash balance that had fallen to $93.3m; so, liquidity is real but is being held against a business that is currently consuming cash. Moreover, the equity is depressed and volatile, down roughly 80% from its 2024 peak before recovering through 2026 as JPMorgan upgraded the stock to Overweight with a $13 target, citing the reception to the new Wraps line; at around $10 a share that leaves a market capitalisation near $1bn and makes Sweetgreen stock a weak acquisition currency. Additionally, the management team is fully absorbed by a domestic turnaround it calls the Sweet Growth Transformation Plan, having just refreshed its C-suite, with Jamie McConnell installed as chief financial officer in September 2025, a new chief development officer, and co-founder Nathaniel Ru stepping back from his day-to-day role at the start of 2026, followed by the appointment of Cindy Olsen, formerly of Chipotle, as chief strategy officer in May 2026. These factors provide a useful backdrop against any future M&A activity—including one as a mechanism for a UK expansion.

Strategic position

Until now, Sweetgreen’s growth model has rested on two engines: adding US units and compounding same-store sales, and the second has gone into reverse at the same moment the first has become harder to justify, because opening more US restaurants into falling domestic traffic adds revenue while diluting the store-level economics the company spent years assembling. The turnaround is certainly the correct internal response, but even a fully successful one returns Sweetgreen to a maturing domestic market rather than to a new source of growth. That is the gap international entry is meant to fill, which is why the weakness of the US business is the reason to look abroad rather than the reason not to.

Sweetgreen carries a dual-class structure in which the Class B shares held by the three founders carry ten votes each, leaving Neman, Jammet and Ru with a majority of the voting power and, in the language of the company’s own filings, “control over the outcome of most matters put to shareholders, including any change of control”. As such, the practical implication is that a move into the UK does not require winning over an activist or a board minded to demand domestic focus. Instead, it simply requires the founders to want it, which makes it up to the founders regarding both whether a deal happens and when.

Market and competitive positioning

I believe London could be a great choice as the natural first market. Sweetgreen sells a premium, customisable, health-led lunch bought by office workers in a dense city centre; this exists in London at an intensity, popularity, and scale comparable to Manhattan’s. According to Lumina Intelligence, the UK food-to-go market is forecast to reach almost £25bn in 2026, growing 3.4% YoY, with the growth driven less by new outlets than by higher spend per visit, an average spend that has risen to just under £13. This might suggest that quality has overtaken value as the most important purchase driver. The profile of this category—affluent professionals paying up for health and provenance in commuter-led city-centre footfall—closely aligns with the market Sweetgreen specifically desires.

The popularity of this category is well-documented in London: it is already proven by a cohort of local operators, including atis, The Salad Project, Farmer J and Tossed, whose lunchtime queues are a fixture—especially in the City of London and Mayfair-Marylebone axes. This does two things. On one hand, it removes the demand risk, because the build-your-own salad bar plainly works at London cost levels. On the other hand, it raises the access risk, because these emerging chains are insurgents capturing market share from incumbents.

The binding constraint in UK food-to-go is distribution on two fronts: where location affects footfall (as is the case anywhere) and where brand builds a cult following. On the former, the chains’ prime sites in the handful of central London micro-markets where the lunch occasion concentrates. On the latter, a greenfield entrant competes for the same attention and brand-building cost of arriving unknown. Sweetgreen exists and is well-established, but elsewhere; this is a major constraint given the chain would likely not operate in the UK as a franchisor.

Entry structure

The brands that entered organically, building their own estates, have struggled to enter and succeed. Chipotle, for example, another US fast-casual chain far larger and better known than Sweetgreen, opened its first London restaurant in 2010 and has reached just around 20 UK locations, primarily in London. Its recent UK accounts revealed full year revenue of £34.6m in 2024. The chain made a loss before tax of £18m, widening from a £12.5m loss in 2023. Nonetheless, Chipotle said the UK is its “standout” market within Europe and plans to grow its UK presence by 20% this year, with plans for longer term growth; this is off the back of an announcement regarding its new site at Westfield Stratford City later this year.

Alternatively, the brands that entered through a local operating partner have fared better at initial entry. Wingstop UK—run since 2018 by the master franchisee Lemon Pepper Holdings, rather than by Wingstop’s US parent—reached 57 sites and an expected £150m revenue run-rate, with Sixth Street taking a majority stake while the founders retained a minority, and the business changed hands for more than £400m. Popeyes UK, similarly run by a local operator, grew revenue from just over £58m in 2023 to more than £118m in 2024, and is targeting several hundred sites.

From these case studies, we can deduce that perhaps US fast-casual scales when a capable local team owns the build and stalls when the parent tries to run it from abroad. This is a speculative position, and one that underpins the thesis that follows.

For Sweetgreen, the greenfield route can be set aside on the precedent and the constraints together. Building a London estate site by site would require Sweetgreen to assemble, from a standing start, a UK property function, a local supply chain, a local labour model and a local brand, in a market with high rents, an ambiguous cost base. Doing so is the riskiest, most capital-intensive and slowest route. Above all, it asks a management team running a domestic turnaround to learn a foreign market in real time.

That said, I still reject the franchise route. There’s a very valid question about why Sweetgreen should not simply license its brand to a UK operator given the model’s success. I argue against this for a few reasons:

• Sweetgreen has never franchised and operates a wholly company-owned estate, so it would have to construct a franchising capability, a disclosure and support organisation and a packaged set of unit economics before it could even begin, which is itself a multi-year distraction.
• The model that worked for Wingstop worked because the imported brand already carried pull, a globally recognised name that a British consumer would cross the street for, whereas Sweetgreen has close to no recognition in the UK, so franchising the name imports the build cost without importing the demand.
• And even where it works, the franchise route still requires an estate to be built from zero, which is the very thing that takes six or seven years. Acquiring an established local operator solves all three problems at once, since it needs no franchising apparatus, it substitutes a locally loved brand for the absent imported one, and it delivers an estate and a pipeline on day one.
• A minor final point: fast-food chains like Wingstop, Popeyes, and Chipotle possess a mass-market appeal, not a fairly niche (‘healthy’ and ‘grab-and-go’ hybrid) one which Sweetgreen and its UK equivalents operate in.

That leaves the distinction between an acquisition and a merger. The London targets are small, with disclosed funding in the low tens of millions of pounds, so it is not true that Sweetgreen could not afford to buy one for cash; it certainly could especially with the balance sheet refresh post-Spyce acquisition. A first foreign market consumes management attention more than it consumes capital, and a company mid-turnaround has very little attention to spare. As such, it is not a choice between an expensive acquisition and a cheap one; it is a choice between a structure that requires Sweetgreen to learn the UK itself and one that does not. An acquisition, however it is financed, puts the burden of grasping the local market context on Sweetgreen.

Alternatively, a merger that leaves the founders and executives [of the UK-based target company] running the business as owners puts the learning on them, which is exactly the arrangement that made Wingstop and Popeyes work and the absence of which sank the organic entrants. If such a merger were to occur, these operators already possess the know-how; the only major risk may be a conscious effort to develop cultural synergies where they may not organically surface, or even exist.

The merger I am envisaging is a majority-stock combination that rolls the target’s founders and operating team into Sweetgreen equity and runs the UK as a semi-autonomous business under its existing leadership. Note that the word ‘merger’ describes the governance and integration philosophy: an operator kept whole and at arm’s length, rather than the deal mechanics. The ‘legal’ form is an acquisition of a private company by a listed acquirer using stock consideration and management rollover, not a merger of equals.

This resolves Sweetgreen’s current constraints at once. It conserves cash and substitutes for the management attention Sweetgreen cannot supply, because the people who run the UK own the upside of running it well. Additionally, it neutralises the depressed-equity objection, which is otherwise the strongest argument against a stock deal, because the absolute size of the transaction is small enough relative to a roughly $1bn market cap. The dilution is modest, in the order of single-digit to low-double-digit percent if struck mostly in stock. That said, I expect such a transaction to be accretive in the long-run assuming the upside case.

Potential targets

The three potential targets are credible London-based counterparties with differences in product, geography, capital structure and ambition. The field is these three rather than the wider cohort because the alternatives fit less well. Tossed, for example, has chosen a franchise-led model and a lower price point that sits below the premium occasion Sweetgreen owns; the remaining names are either sub-scale or off-format.

Farmer J

• Farmer J is the largest and best-capitalised, and for that reason the least available. Founded in 2014, with its first site in 2016, by Jonathan Recanati, a former Deutsche Bank analyst who runs the business with his wife Ali.
• It sells a build-your-own Field Tray priced around £10-15, turned over about £18m in its 2023 accounts, runs site-level EBITDA in the high teens, and serves up to 1,500 customers a day at its larger sites, on a broader and hotter Mediterranean menu than a salad bar.
• It has raised the most [funding] of the three, with total funding of around $31m across three rounds and Sweetgreen listed among its closest comparables. Its October 2025 round of £17.5m was raised explicitly to fund a New York debut alongside further London openings. The U.S. consideration converts Farmer J from a potential target into a direct competitor on Sweetgreen’s home turf. The most ambitious and best-funded operator in the cohort provides a possible signal that this founder is not a seller. For Farmer J to be the right answer, Sweetgreen would have to want a broader hot-food business and Farmer J’s US expansion would have to stall to the point where its backers preferred a defensive combination; neither holds today.

atis

• atis is the closest of the three to Sweetgreen in format, a build-your-own salad and bowl concept, but it is both narrower in proposition and harder to transact. Founded in 2019 by Eleanor Warder and Phil Honer, a husband-and-wife team who drew their inspiration directly from Sweetgreen while Honer pursued his MBA at HBS.
• It sells plant-forward bowls and protein plates under a design-led brand, with a more explicitly plant-based emphasis than Sweetgreen’s omnivore menu. It is not short of capital, having raised around £8m in early 2025 to roughly double its estate and begin looking beyond London, with a target of 20 sites.
• In my view, atis’s primary obstacle is the cap table rather than the cash. The business remains founder-controlled and lightly institutionalised, which makes a clean stock combination harder to negotiate, leaves the brand more founder-dependent, and, most importantly, means there is no institutional investor on a clock with an incentive to sell. A target whose owners are not looking to exit is not a worse asset; it is one that may simply never come to market.
• For atis to be the answer, Sweetgreen would have to want a plant-led sub-brand and two founders would have to choose to sell a business they still tightly control, which is the less probable path.

The Salad Project

• In my view, The Salad Project (TSP) is the strongest fit for this merger; I expand on my argument(s) in the “Thesis” section below, but this section provides a brief overview like the other two above.
• Founded in 2021 by Florian de Chezelles and James Dare in Spitalfields, it has built a cult following for a curated, creative, health-focused lunch and grown to over a dozen London sites. Given the demand for TSP and the market itself, I’d expect a few more by mid-2028.
• It sells fully customisable salads and protein bowls made from scratch, and its positioning, that salad can be a lifestyle, is the closest thing in London to Sweetgreen’s own. The three reasons it wins are developed next.

Thesis

Product rationale

• The Salad Project is the only pure-play premium salad and bowl operator in the set with a made-from-scratch, design-led, lifestyle identity, which is to say the only one whose proposition maps almost directly onto Sweetgreen’s.
• Farmer J’s broader hot-food menu and atis’s plant-forward emphasis each diverge from the Sweetgreen template in ways that complicate menu, supply chain and brand, whereas TSP does not, so the integration reduces to putting Sweetgreen’s capital, systems and supply relationships behind an operator already executing the same concept rather than reconciling two different food models.

Geographic rationale

• In January 2026 The Salad Project secured £9m, from investors including Will Shu (founder of Deliveroo) and Nick Jones (founder of Soho House) to fund a continental European expansion beginning with a first overseas site in the Le Sentier district of Paris, having previously set a target of 20 sites by mid-2027.
• A target building into Europe rather than the U.S. (contrary to Farmer J’s stated ambitions) is complementary to Sweetgreen. Firstly, there is no collision on Sweetgreen’s home turf, and the deal delivers a nascent continental beachhead, so a single transaction converts a UK entry into a European business. Secondly, for an acquirer whose entire footprint is American, inheriting a London estate and a Paris launch together is a significantly better starting position than London alone.

Capital rationale

• The January 2026 round brought in the private equity firm Active Partners, with companies like LEON, Caravan, and Chicken Shop within its portfolio.
• An institutional sponsor like Active Partners—that exists to sell, on a clock, at a defined return—makes an M&A process rational and timely. This thus provides a practical reason TSP may be considered a seller by design where the other two are not.
• Although more speculative, TSP’s founders are the youngest across the three. This could indicate one of two things regarding a desire to ‘sell’: either more enthusiasm and a desire to scale the company with longevity in mind, or a preference for a liquid exit.

The synergies

Sweetgreen brings the following to the table:

• The brand and balance sheet: a category-defining name in its home market and listed-company capital that accelerate landlord access and fund the stated twenty-site UK target and the European rollout faster than a £9m round allows.
• The unit-economics uplift: Sweetgreen has guided its average unit volume toward $2.8-$3.0m, well above an inferred London salad-bar average unit volume (AUV) of roughly £1.2-1.8m. Whilst UK per-visit spend sits structurally below the US so the gap will not fully close, the menu engineering and operating playbook behind that figure point to a real per-site uplift.
• The Infinite Kitchen automation: Sweetgreen assembles bowls with this and now licenses from Wonder following the Spyce sale. Its automated locations have run restaurant-level margins of around 28% against roughly 18% chain-wide, a labour-led gap that is worth more in high-wage London than across much of the US. Additionally, the Salad Project’s existing digital-only collection formats give it the operating affinity to absorb that technology.
• Additional factors include: a digital and loyalty stack and a continuous menu-innovation pipeline that a twelve-site independent presumably lacks the resources to achieve.

TSP brings the following to the table:

• A turnkey UK operating company spanning property, labour, supply and planning;
• A proven, de-risked concept at London economics that removes the single largest greenfield risk;
• An impending Paris launch that extends the business to the Continent;
• And, above all, founder-operators who stay and run it, supplying the management attention Sweetgreen has none of to spare in order to execute in an optimal fashion.
• An additional selling point is the brand-pull being bought, as TSP is a locally loved name. My recommendation for an optimal approach to execution keeps the TSP brand as is, rather than rebranding it to a name Londoners do not yet know and possess no emotional affinity towards.

The risks

Two arguments could be made, both fundamentally on timing: (1) Sweetgreen should ignore international expansion entirely until the US business is fixed and (2) as a company whose own shares trade near multi-year lows, it should be buying back its depressed stock or conserving the Spyce balance sheet proceeds rather than spending either on an overseas company—no matter how attractive the market.

These are completely sound objections and fair counterpoints. I would, however, raise two other points.

On timing and prioritisation: it is possible, no matter how improbable, that even an impeccably-executed turnaround returns the company to a maturing domestic market rather than to growth. But, waiting also has a price. The Salad Project or similar targets become more expensive with every subsequent funding round. The bigger question is not whether Sweetgreen enters the UK but how, given the conviction that the merger is a sound and strategic move. My answer: a stock-led merger with The Salad Project, structured to pay the sponsor in cash and the founders in equity, at an inferred £60–£120m likely within Q427 into Q128.

Price, structure and timing

The figures below are inferred and should be read as estimates built from disclosed funding figures, not from reported results, which TSP as a private company does not publish.

Regarding valuation, the January 2026 £9m round—assuming a typical growth-stage dilution of 15% to 25%—implies an inferred post-money equity value of roughly £36–£60m. This range functions as a floor for any acquirer, with a potential premium depending on whether a majority stake or full buyout.

The most directly relevant transaction comparable is Wingstop UK, whose sale at more than £400m on an expected £150m of revenue is roughly 2.7x revenue for a high-growth US-brand UK operator. Leveraging the Wingstop multiple, in the region of 3x-6x an inferred high-teens revenue run-rate results in an enterprise value of approximately £60m to £120m, or about $80-160m. The lower end reflects a pre-emptive deal struck before the European model is proven, whilst the upper end reflects a sale after the Paris launch has shown that the format is duplicable.

Whilst a stock deal favours Sweetgreen, paying in equity rather than cash is the thing that makes the deal less attractive to TSP, since Active Partners and the founders would be taking 'depressed paper' in a US small-cap that isn't necessarily thriving. One resolution might be to split the consideration by counterparty rather than treat it as uniform. The financial sponsor(s) including institutional investors (like Active) and angels (like Shu and Jones), all of which exist to net a clean return on a defined horizon, are presumably satisfied with cash, drawn modestly against the post-Spyce liquidity, possibly alongside a collar that caps the downside on any $SG stock received. The founders, whose continued effort is the actual asset, are paid predominantly in Sweetgreen equity with a meaningful earn-out tied to UK and European unit growth, which aligns them to, and incentivises, daily operations. That mix conserves the bulk of Sweetgreen’s cash, keeps de Chezelles, Dare and their team invested, and prices the stock risk accordingly.