As filed with the Securities and Exchange Commission on November 9, 2021.

Registration No. 333-260472

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Sweetgreen, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	5812	27-1159215
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

3101 W. Exposition Blvd.

Los Angeles, CA 90018

(323) 990-7040

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Jonathan Neman

Chief Executive Officer

Sweetgreen, Inc.

3101 W. Exposition Boulevard

Los Angeles, CA 90018

(323) 990-7040

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Nick Hobson David Peinsipp Siana Lowrey Charles S. Kim Cooley LLP 1333 2nd Street, Suite 400 Santa Monica, CA 90401 (310) 883-6400 Nicolas Jammet Nathaniel Ru Mitch Reback Andrew Glickman Sweetgreen, Inc. 3101 W. Exposition Blvd. Los Angeles, CA 90018 (323) 990-7040 Michael Benjamin Richard A. Kline Latham & Watkins LLP 885 Third Avenue New York, NY 10022 (212) 906-1200

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered(1)	Proposed maximum offering price per share	Proposed maximum aggregate offering price(1)(2)	Amount of registration fee(2)(3)
Class A common stock, par value $0.001 per share	14,375,000	$25.00	$359,375,000	$33,315

(1) Includes 1,875,000 shares that the underwriters have the option to purchase.

(2) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.

(3) The Registrant previously paid a registration fee of $9,270 in connection with the initial filing of this Registration Statement.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant will file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated November 9, 2021

12,500,000 Shares

Class A Common Stock

This is an initial public offering of shares of Class A common stock of Sweetgreen, Inc. We are offering 12,500,000 shares of our Class A common stock.

Prior to this offering, there has been no public market for our Class A common stock. It is currently estimated that the initial public offering price for our Class A common stock will be between $23.00 and $25.00 per share. We have applied to list our Class A common stock on the New York Stock Exchange under the symbol “SG.”

Following this offering, we will have two classes of common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to ten votes and is convertible at any time into one share of Class A common stock. Immediately following the completion of this offering, all outstanding shares of our Class B common stock will be beneficially owned by our founders, Jonathan Neman, Nicolas Jammet, and Nathaniel Ru, who will collectively represent approximately 59.6% of the voting power of our outstanding capital stock, assuming no exercise of the underwriters’ option to purchase additional shares, and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors and the approval of any change in control transaction.

We are an “emerging growth company” as defined under the federal securities laws and, as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.

Investing in our Class A common stock involves risks. See the section titled “Risk Factors” beginning on page 26 to read about factors you should consider before buying our Class A common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds, before expenses, to Sweetgreen, Inc.	$	$

(1) See the section titled “Underwriting” for additional information regarding compensation payable to the underwriters.

At our request, the underwriters have reserved for sale at the initial public offering price per share up to 5% of the shares of Class A common stock offered by this prospectus for sale at the initial public offering price through a directed share program to certain individuals identified by management. In addition, at our request, the underwriters have reserved up to 1% of the shares of Class A common stock offered by this prospectus for sale at the initial public offering price through a separate directed share program to eligible customers of the company. This customer directed share program will be arranged through and administered by a third-party program administrator, Robinhood Financial LLC, as a selling group member via its online brokerage platform. See the section titled “Underwriting—Directed Share Programs.”

We have granted the underwriters an option for a period of 30 days to purchase up to an additional 1,875,000 shares of our Class A common stock from us at the initial public offering price less the underwriting discounts and commissions.

The underwriters expect to deliver the shares of Class A common stock to purchasers on             , 2021.

Goldman Sachs & Co. LLC	J.P. Morgan
Allen & Company LLC	Morgan Stanley

Citigroup Cowen Oppenheimer & Co. RBC Capital Markets William Blair

Amerivet Securities Blaylock Van, LLC

Prospectus dated                 , 2021.

sweetgreen

Our mission is to build healthier communities by connecting people to real food.

In 2007, we started with a 560-square-foot restaurant in Washington, D.C.

Today we're proudly building healthier communities in 140 locations across 13 states and counting.

We do this every day thanks to the 5,000+ people who power our mission...

and our vast network of sustainable suppliers... DWELLEY FAMILY FARMS - BRENTWOOD, CA (PARTNERS SINCE 2018)

who come together to create the fresh, plant-forward, earth-friendly meals we serve...

all while making it easier for our millions of customers to eat healthy.

TABLE OF CONTENTS

Prospectus

	Page
Glossary		iii
Prospectus Summary		2
Risk Factors		26
Special Note Regarding Forward-Looking Statements		75
Market, Industry, And Other Data		77
Use of Proceeds		78
Dividend Policy		79
Capitalization		80
Dilution		83
Selected Consolidated Financial and Other Data		87
Management’s Discussion and Analysis of Financial Condition and Results of Operations		93
Business		128
Management		159
Executive Compensation		168
Certain Relationships and Related Party Transactions		187
Principal Stockholders		194
Description of Capital Stock		198
Shares Eligible For Future Sale		207
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Class A Common Stock		212
Underwriting		216
Legal Matters		227
Experts		227
Where You Can Find Additional Information		227
Index to Consolidated Financial Statements		F-1

Through and including             , 2021 (the 25^th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor any of the underwriters take responsibility for, or can provide any assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell, and seeking offers to buy, shares of our Class A common stock only under circumstances and in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Class A common stock. Our business, financial condition, results of operations, and prospects may have changed since that date.

For investors outside the United States: neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any

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jurisdiction where action for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our Class A common stock and the distribution of this prospectus outside of the United States.

“sweetgreen,” the sweetgreen logo, “SG,” “sweetgreen Outpost,” “SG Outpost,” and our other registered and common law trade names, trademarks, and service marks are the property of Sweetgreen, Inc. All other trademarks, trade names, and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus may be referred to without the ^® and ^™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

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GLOSSARY

Key Terms for Our Business

General

Cash-on-Cash Returns.    Cash-on-Cash Returns for any individual restaurant is calculated as Restaurant-Level Profit for any applicable consecutive twelve-month period, divided by such restaurant’s initial buildout costs, inclusive of tenant improvement allowances. For example, year two Cash-on-Cash Returns for an individual restaurant, which we believe is a typical measurement point for this metric in the restaurant industry, would be calculated by dividing Restaurant-Level Profit for the twelve consecutive months beginning on month 13 after such restaurant’s opening by such restaurant’s initial buildout costs, inclusive of tenant improvement allowances. We do not believe that year one Cash-on-Cash Returns is a meaningful measure of performance because the first year of an individual restaurant’s operations is not representative of such restaurant’s ongoing operations, as the Restaurant-Level Profit is typically lower as a restaurant ramps up operations.

Comparable Restaurant Base.    Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement period, other than any restaurants that had a material, temporary closure during the relevant measurement period. Historically, a restaurant has been considered to have had a material, temporary closure if it had no operations for a consecutive period of at least 30 days. As a result of material, temporary closures in the second and third fiscal quarters of fiscal year 2020 due to the COVID-19 pandemic, 19 restaurants were excluded from our Comparable Restaurant Base as of the end of (i) the second and third fiscal quarters of fiscal year 2020, (ii) fiscal year 2020, and (iii) the first and second fiscal quarters of fiscal year 2021. No restaurants were excluded from the Comparable Restaurant Base in fiscal year 2019 or in the third fiscal quarter of fiscal year 2021.

Channels

We have five main sales channels:    In-Store, Marketplace, Native Delivery, Outpost, and Pick-Up. We own and operate all of these channels other than our Marketplace Channel, which is operated by various third-party delivery marketplaces.

In-Store Channel.    In-Store Channel refers to sales to customers who make in-store purchases in our restaurants, whether they pay by cash, credit card, or digital scan-to-pay. Purchases made in our In-Store Channel via cash or credit card are referred to as “Non-Digital” transactions, and purchases made in our In-Store Channel via digital scan-to-pay are included as part of our Owned Digital Channels.

Marketplace Channel.    Marketplace Channel refers to sales to customers for delivery or pick-up made through third-party delivery marketplaces, including Caviar, DoorDash, Grubhub, Postmates, and Uber Eats.

Native Delivery Channel.    Native Delivery Channel refers to sales to customers for delivery made through the sweetgreen website or mobile app.

Outpost Channel.    Outpost Channel refers to sales to customers for delivery made through the sweetgreen website or mobile app to our Outposts, which are our trademark offsite drop-off points at offices, residential buildings, and hospitals.

Owned Digital Channels.    Owned Digital Channels encompasses our Pick-Up Channel, Native Delivery Channel, and Outpost Channel, and purchases made in our In-Store Channel via digital scan-to-pay.

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Pick-Up Channel.    Pick-Up Channel refers to sales to customers made for pick up at one of our restaurants through the sweetgreen website or mobile app.

Total Digital Channels.    Total Digital Channels consist of our Owned Digital Channels and our Marketplace Channel, and include our revenues from all of our channels except those from Non-Digital transactions made through our In-Store Channel.

Key Metrics and Non-GAAP Financial Measures

Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin are financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See the section titled “Selected Consolidated Financial and Other Data—Non-GAAP Financial Measures” for more information, including the limitations of such measures, and a reconciliation of each of these measures to the most directly comparable financial measures stated in accordance with GAAP.

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin.    We define Adjusted EBITDA as net loss adjusted to exclude interest income, interest expense, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation expense, loss (gain) on disposal of property and equipment, impairment of long-lived assets, Spyce acquisition costs, and other expense. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.

Restaurant-Level Profit and Restaurant-Level Profit Margin.    We define Restaurant-Level Profit as income (loss) from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, impairment of long-lived assets, and loss on disposal of property and equipment. Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue.

Key Metrics

Average Unit Volume (“AUV”).    AUV is defined as the average trailing revenue for the prior four fiscal quarters for all restaurants in the Comparable Restaurant Base. The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our restaurants. As a result of material, temporary closures in the second and third fiscal quarters of fiscal year 2020 due to the COVID-19 pandemic, 19 restaurants were excluded from our Comparable Restaurant Base as of the end of (i) the second and third fiscal quarters of fiscal year 2020, (ii) fiscal year 2020, and (iii) the first and second fiscal quarters of fiscal year 2021. No restaurants were excluded from the Comparable Restaurant Base in fiscal year 2019 or in the third fiscal quarter of fiscal year 2021.

Net New Restaurant Openings.    Net New Restaurant Openings reflect the number of new sweetgreen restaurant openings during a given reporting period, net of any permanent sweetgreen restaurant closures during the same period.

Same-Store Sales Change.    Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period; provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will

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be excluded when calculating Same-Store Sales Change for that restaurant. As a result of temporary closures of 19 restaurants due to the COVID-19 pandemic during the second and third fiscal quarters of fiscal year 2020, Same-Store Sales Change has been adjusted for (i) fiscal year 2020 and (ii) all interim periods in fiscal years 2020 and 2021 (other than the thirteen weeks ended March 29, 2020, the thirteen weeks ended December 27, 2020, and the thirteen weeks ended March 28, 2021). Additionally, as a result of temporary closures of 56 restaurants due to civil disturbances that occurred during one week in the second fiscal quarter of fiscal year 2020, we excluded only one week from the calculation of Same-Store Sales Change for the impacted periods (and we excluded the corresponding week from the corresponding fiscal periods in the prior fiscal year). This is because excluding an entire fiscal month for these restaurants, which represented a significant portion of our restaurant fleet, would result in a Same-Store Sales Change figure that is not representative of our business as a whole. This exclusion impacted the calculation of Same-Store Sales Change for these restaurants for (i) fiscal year 2020 and (ii) the thirteen weeks ended June 28, 2020, the thirteen weeks ended June 27, 2021, the thirty-nine weeks ended September 27, 2020, and the thirty-nine weeks ended September 26, 2021. Therefore, Same-Store Sales Change for fiscal year 2020 and certain of the interim periods presented in fiscal years 2020 and 2021 is not comparable to prior financial periods. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and closures.

Total Digital Revenue Percentage and Owned Digital Revenue Percentage.    Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Total Digital Channels. Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels.

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PROSPECTUS SUMMARY

This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider in making your investment decision. Before investing in our Class A common stock, you should carefully read this entire prospectus. You should carefully consider, among other things, the sections titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus. Unless the context otherwise requires, the terms “Sweetgreen, Inc.,” “sweetgreen,” “the company,” “we,” “us,” “our,” and similar references in this prospectus refer to Sweetgreen, Inc. and its subsidiaries.

Our Mission

To Build Healthier Communities by Connecting People to Real Food

Who We Are

We are building the next generation restaurant and lifestyle brand that serves healthy food at scale. Our core values guide our actions and we aim to empower our customers, team members and partners to be a positive force on the food system.

For too long, industrial food production has enabled large chain restaurants to design menus optimized for efficiency at the cost of nutrition and long-term health. The result is food created to fit the system, as opposed to food designed for the customer.

We started sweetgreen to help change this.

Over the last 15 years, we have been leading a movement to re-imagine fast food for a new era. There is a powerful shift happening in consumer behavior. Every day more people want to eat healthier food and care about the impact their choices have on the environment. This is becoming the new normal, and we believe sweetgreen is well positioned to be a category-defining food brand for the future.

Today, sweetgreen is one of the fastest-growing restaurant companies in the United States by revenue. As of September 26, 2021, we owned and operated 140 restaurants in 13 states and Washington, D.C., and employed over 5,000 team members. We have thoughtfully designed all of our restaurants to both reflect the culture and feel of our local communities and to support our multiple digital channels. For our fiscal year to date through September 26, 2021, 68% of our revenue came through our Total Digital Channels, with 47% of our revenue coming from our Owned Digital Channels (and the remaining 32% of our revenue attributable to Non-Digital transactions made through our In-Store Channel).

Most importantly, we have built a purpose-driven brand with significantly greater reach than our current physical footprint. Our brand recognition, in combination with our passionate customer following, has enabled us to lead conversations on the importance of what we eat. Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect.

Since opening our first restaurant in 2007, we have served over 100 million healthy meals - and we’re just getting started.

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Our Food Ethos

We believe the choices we make about what we eat, where it comes from and how it is prepared have a direct impact on our health, our communities and the planet. This is our Food Ethos, and it is firmly rooted in every aspect of our business. At sweetgreen, we only serve Real Food, which for us means:

• Plant-forward

• Celebrates seasonality

• Made fresh in our restaurants

• Prioritizes organic, regenerative, and local sourcing

• Meets strict and humane animal welfare and seafood standards

• Free of highly-processed preservatives, artificial flavors, and refined or hidden sugars

• Mindful of the carbon impact of each ingredient to protect future generations

This commitment to our Food Ethos keeps our food delicious, nutrient dense, and sustainable. At sweetgreen, Real Food tastes better, makes you feel better, and drives the frequency that has defined our success.

We also apply our Food Ethos by integrating sustainability into every component of our value chain. Our plant-forward menu means that we are already 30% less carbon intensive than the average U.S. diet, according to Watershed, our third-party climate technology partner. We are a leading brand in an industry that has been reported to drive as much as one third of global greenhouse gas emissions, which The Rockefeller Foundation estimates to cost $400 billion per year in the United States alone. We believe that climate change is the defining challenge of our generation, which is why we committed to becoming carbon neutral by the end of 2027.

What Sets Sweetgreen Apart

We leverage our brand, technology, and supply chain to build a foundation that enables us to rapidly scale Real Food. Our approach is a balance of art and science. We start with the best ingredients, leverage data to understand the needs of our customers and use human creativity to tell great stories around food. Over the last 15 years, we have invested in five core elements that are designed to give us a durable competitive advantage.

Transparent and Scalable Supply Chain

We have built a differentiated, end-to-end supply chain that begins with more than 200 domestic food partners, such as farmers and bakers, and culminates in delicious, high-quality food for our customers. Our supply chain is organized into regional distribution networks that align retail proximity with cultivation to allow for more transparency from seed to bowl. We collaboratively plan crops with growers far in advance of our supply needs to ensure we can serve the best products for each market.

Our supply chain drives key decisions throughout our operations, from planning our seasonally inspired menu to prepping our fresh produce in our open kitchens. This integrated approach directly enhances our product quality, ensures high standards of food safety and builds trust with our customers. Consistent with our commitment to transparency, we are proud to showcase our food partners on the walls of every sweetgreen restaurant.

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Healthy and Habitual Menu

We have designed our menu to be delicious, customizable and convenient to empower our customers to make healthier choices for both lunch and dinner. We currently offer signature salads, warm bowls, and plates that are complemented by a seasonal menu that changes five times a year. Additionally, our assortment of approximately 40 freshly prepared or cooked ingredients allows our customers to create millions of unique, customized orders to accommodate almost any flavor profile or dietary preference.

We place our customers at the center of our menu design. We leverage data from our digital platform to better understand consumer preferences and behavior and integrate these learnings as we continue to evolve our menu offerings.

• New Menu Categories: With the addition of Warm Bowls, Sides and Plates, we have further diversified our menu to provide customers with a greater variety of options. Collectively, for our fiscal year to date through September 26, 2021, these new menu categories represented 43% of our revenue.

• Day-Part Expansion: Our menu expansion has also enabled us to take advantage of multiple day-parts as a way to increase our revenue and AUV. Our day-part split was 66% lunch (orders placed before 4 p.m.) and 34% dinner (orders placed at or after 4 p.m.) for our fiscal year to date through September 26, 2021, which was consistent with the previous several years.

The simplicity of our menu combined with the flexibility of our fresh ingredients has been our formula for making sweetgreen a part of our customers’ regular routine.

Digitally-Driven Restaurants

We strongly believe in harnessing the power of technology to enhance the sweetgreen experience. We have designed our digital platform to allow us to have a direct relationship with our customers, so that we can deliver a personalized experience and provide the convenience of multiple channels. As a result, the sweetgreen mobile app was recognized by the Webby Awards as the best Food & Drink app in both 2020 and 2021.

We have always innovated ahead of the curve, and by adding Outpost (2018) and Native Delivery (2020) as additional Owned Digital Channels, we have continued to improve our digital business.

• Total Digital Revenue Percentage: Increased from 30% in fiscal year 2016 to 75% in fiscal year 2020.

• Owned Digital Revenue Percentage: Increased from 29% in fiscal year 2016 to 56% in fiscal year 2020.

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For our fiscal year to date through September 26, 2021, our digital share has remained strong, with a Total Digital Revenue Percentage of 68% and an Owned Digital Revenue Percentage of 47%, even as revenue from our In-Store Channel improved.

The convenience of our multi-channel approach, combined with our ability to offer personalized content and recommendations (such as exclusive menu items and curated collections), results in a highly engaged cohort of habitual sweetgreen customers.

• Customers that ordered through one or more of our Owned Digital Channels in a fiscal quarter in 2021 (and who had made a purchase prior to that quarter) ordered almost 1.5 times more often in that quarter than customers that placed only Non-Digital orders through our In-Store Channel.

• Customers that ordered through two or more of our Owned Digital Channels in a fiscal quarter in 2021 (and who had made a purchase prior to that quarter) ordered more than 2.5 times more often in that quarter than customers that placed only Non-Digital orders through our In-Store Channel.

⁽¹⁾ Excludes customers who were not existing sweetgreen customers prior to the relevant quarter of measurement, as well as any of the following customers, who in the aggregate constitute an immaterial portion of our digital orders: (i) sweetgreen

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employees, (ii) aggregate ordering platform accounts pursuant to which one individual customer orders for a group of customers, (iii) customers who have (x) spent more than $35 per day since their first order, (y) ordered more than once, and (z) made their first sweetgreen purchase more than 7 days ago, or (iv) customers who have on average ordered more than 6 entrees per order. For orders placed through one of our Digital Channels, a unique customer is determined based on the customer’s login information. A single individual who places orders using different login information would be counted as multiple unique customers, and multiple individuals who place orders using the same login information would be counted as a single unique customer.

⁽²⁾ Includes only customers who make purchases through our In-Store Channel via credit card and use the same credit card for purchases in each quarter of measurement. A single individual who makes purchases using multiple credit cards would be counted as multiple unique customers, and multiple individuals who make purchases using the same credit card information would be counted as a single unique customer.

In addition to our customer-facing digital platform, we have also invested in technology to support our back of house operations and simplify the work of our team members. These investments include leveraging systems that manage daily inventory in our restaurants to ensure freshness, guide prep work, optimize our meal assembly process, and manage our team members’ output to enhance our order fulfillment times.

Passionate Team Member Culture

Our greatest competitive advantage is, and has always been, our people. Our teams are energized every day by our purpose-driven brand and strong growth trajectory. We empower our more than 5,000 team members to develop lifelong skills and advance their careers. At sweetgreen, the best leaders come from within – we develop a talent-rich pipeline by having a clear promotional track for team members to become a Head Coach (our title for a store manager) within as few as three years. During the six-month period preceding September 26, 2021, approximately half of our open Head Coach and Assistant Coach roles were filled by internal promotions.

We obsess over the team member experience and provide industry-leading benefits, such as equity incentives for our Head Coaches, parental leave to all of our team members, and policies and resource groups to promote diversity and inclusion. Our teams do their best work when they can bring their whole and authentic selves to work, which we believe results in an exceptional customer experience that keeps our customers coming back and feeling connected to the brand. In October 2021, we were ranked 18th by Newsweek in their Top 100 Most Loved Workplaces rankings.

A Brand Rooted in Purpose and Community

Our brand is designed to inspire consumers to live healthier lives without compromising their values. This allows sweetgreen to lead conversations on the importance of what we eat and the impact it has on the environment. Our goal is to connect food and culture to help redefine what the fast-food industry will look like in the years to come. We have collaborated with some of the world’s best chefs, athletes and musicians to amplify our mission, including our recent partnership with world champion tennis player and longtime sweetgreen fan, Naomi Osaka. In both 2019 and 2020 we were named as one of Fast Company’s Most Innovative Companies of the Year.

We believe there is no such thing as a successful business in an unsuccessful community, which is why we strive to build engagement through our social impact initiatives, including:

• “sweetgreen in schools”: We partnered with FoodCorps to create programs to reimagine the school cafeteria that reached more than 170,000 students during the 2019-2020 school year; and

• Impact Outpost: At the onset of COVID-19, we partnered with Chef Jose Andres’ non-profit, World Central Kitchen, to raise over $2.5 million and provide close to 400,000 meals to frontline hospital heroes.

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All this results in a highly engaged community of sweetgreen customers that stand for health and wellness and are proud to promote the brand, as demonstrated by our best-in-class net promoter score (“NPS”) of 78 on average from 2018 through the third fiscal quarter of 2021.

Rapid Growth with Strong Unit Economics

Our investments in the five core elements of our business resulted in exceptional growth from fiscal year 2014 through fiscal year 2019. We experienced a decline in our In-Store Channel due to the COVID-19 pandemic in fiscal year 2020, particularly in central business districts, which was partially offset by strong sales in our suburban locations and strong off-premises digital sales across all markets. For our fiscal year to date through September 26, 2021, we experienced positive momentum across all of our channels, as COVID-19 vaccines became widely available and customers started to return to offices. While we continued to see an increase in revenue in each completed fiscal quarter of 2021, as the Delta variant spread widely in the third fiscal quarter of 2021, our positive momentum slowed, as many jurisdictions imposed new or more stringent mask and vaccination mandates and many employers and employees have delayed their returns to offices.

Key Operational Metrics

• Restaurant Count: Increased from 29 restaurants as of the end of fiscal year 2014 to 119 restaurants as of the end of fiscal year 2020 (27% compound annual growth rate (“CAGR”)). As of September 26, 2021, we have grown to 140 restaurants.

• Average Unit Volume (AUV)⁽¹⁾:

• 2014-2019: Increased from $1.6 million to $3.0 million (12% CAGR)

• 2020: $2.2 million

• 2021: $2.5 million as of September 26, 2021, compared to $2.3 million as of September 27, 2020

• Same-Store Sales Change⁽¹⁾:

• 2014-2019: Increased by an average of 10% per annum, with a Same-Store Sales Change of 15% in 2019

• 2020: (26)%

• 2021: 21% for our fiscal year to date through September 26, 2021, compared to (26%) for our fiscal year to date through September 27, 2020

Key Financial Metrics

• Net Revenue:

• 2014-2019: Increased from $42 million to $274 million (46% CAGR)

• 2020: $221 million

• 2021: $243 million for our fiscal year to date through September 26, 2021, compared to $161 million for our fiscal year to date through September 27, 2020

• Loss from Operations:

• 2014-2019: Increased from $(5) million to $(70) million

• 2020: $(142) million

• 2021: $(87) million for our fiscal year to date through September 26, 2021, compared to $(100) million for our fiscal year to date through September 27, 2020

⁽¹⁾  See the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Metrics” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, AUV and Same-Store Sales Change for the periods presented.

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• Restaurant-Level Profit:

• 2014-2019: Increased from $8 million to $44 million, representing a Restaurant-Level Profit Margin of 16% for fiscal year 2019

• 2020: $(9) million, representing a Restaurant-Level Profit Margin of (4%)

• 2021: $28 million for our fiscal year to date through September 26, 2021, representing a Restaurant-Level Profit Margin of 12%, compared to $(6) million for our fiscal year to date through September 27, 2020, representing a Restaurant-Level Profit Margin of (4)%

We believe we have also demonstrated strong unit economics in conjunction with sustained rapid growth. We reported a Restaurant-Level Profit Margin of 16% for fiscal year 2019, in addition to a $3.0 million AUV as of the end of fiscal year 2019. Our Restaurant-Level Profit Margin declined to (4%) for fiscal year 2020, reflecting the impact of the COVID-19 pandemic and civil disturbances, but rebounded to 12% for our fiscal year to date through September 26, 2021, and 14% in our third fiscal quarter of 2021, as we started to see the beginning of the recovery from the COVID-19 pandemic, although our urban stores in central business districts, in particular, continued to be significantly impacted by the pandemic and the spread of the Delta variant. Additionally, we had average year two Cash-on-Cash Returns for our restaurants opened from 2014 through 2017 of 40%. Year two Cash-on-Cash Returns for restaurants opened in 2018 were 25%, which is a result of the significant impact of the COVID-19 pandemic on performance in 2020, and as a result, we believe are not representative of our historical or targeted future performance.

As we continue to expand, we are confident that our compelling restaurant-level economics will continue to work across geographies and market types. We plan to target:

• Year two Cash-on-Cash Returns of 42% to 50%;

• AUV of $2.8 million to $3.0 million;

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• Restaurant-Level Profit Margin of 18% to 20%; and

• An average investment of approximately $1.2 million per new restaurant.

For more information about our non-GAAP results, including a reconciliation of Restaurant-Level Profit and Restaurant-Level Profit Margin to loss from operations, please see the section titled “Selected Consolidated Financial and Other Data—Non-GAAP Financial Measures.”

Our Market Opportunity

We Operate in a Large and Growing Market That Is Critical to Society

Food is a massive and important category. In total, the U.S. food system represented a $1.8 trillion market in 2019, of which food away from home was an approximately $980 billion market, according to the U.S. Department of Agriculture.

• Limited-Service Restaurants – Recently, limited-service restaurants, which include fast-food and fast-casual restaurants, have represented the fastest-growing category in food away from home, growing at a 7% CAGR from 2014 to 2019.

• Healthy Food – Consumers have also recently exhibited a strong preference for healthier alternatives. According to the Organic Trade Association, between 2010 and 2019, organic food revenue grew at a 9% CAGR, more than three times faster than overall food revenue, and in 2020, organic food sales grew by a record 13%.

Our Industry Has Not Evolved Sufficiently to Reflect Changing Consumer Tastes

Large restaurant chains were built on a model that has not evolved to reflect shifting consumer tastes, leaving many consumers hungry for an alternative. We have always felt that this legacy model:

• Lacks healthy and nutritious options – Restaurants have historically prioritized efficiency at the expense of quality, favoring processed foods that are easily mass produced and capable of traveling long distances. Despite some small steps towards adding healthier alternatives, the industry remains fundamentally unchanged. The Rockefeller Foundation estimates that in 2019, the total present and future costs of the U.S. food system, including factors like pollution, biodiversity loss, and rising health care costs associated with diet-related disease was $3.2 trillion, which is approximately triple the $1.1 trillion actually spent on food during that year.

• Has not kept pace with technological innovation – We are one of a select few restaurants designed with technology as the basis for all elements of our operations. Many restaurants were built on antiquated technology, and while they have tried to slowly adapt, we believe they are at a fundamental disadvantage given their large legacy footprints and historical underinvestment.

• Has limited direct relationships with customers – We place tremendous value on owning our customer relationships, in part so we can better understand our customers’ preferences and tastes. For many brands, third-party marketplaces have owned the digital customer relationship and franchisees have controlled the in-person customer experience, as restaurant owners have sacrificed having direct customer relationships for short-term revenue.

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We Sit at the Intersection of Powerful Consumer Trends Shaping Our Industry

We believe that our industry is ripe for disruption and that there is a significant market opportunity for brands aligned with changing consumer preferences, including:

• Increased Focus on Health and Wellness – The growing awareness of the benefits of healthy eating and physical activity is driving behavioral change. Consumers are trading up to higher quality foods given an increased consumer focus on the impact of responsible sourcing, ingredients and preparation.

• Seismic Shift to Plant-Based Meals – Consumers are increasingly aware of the environmental and health benefits of a plant-forward diet. According to the DoorDash 2020 Trend Report, nearly half of all Americans plan to incorporate more plant-based foods into their diets.

• Rapid Adoption of Digital and Delivery – Increasingly, consumers expect to be able to eat their food when and where they want it, a trend that was emphasized by COVID-19, and which we expect to continue in future years. In the restaurant industry, digital orders increased 19% in January 2020 and 145% in December 2020, compared to the same month of the prior year, according to The NPD group.

• Stronger Connection to Purpose-Driven Brands – More than ever, consumers are looking to allocate their spending to brands that align with their values. The 2020 Zeno Strength of Purpose study found that consumers are four to six times more likely to purchase from companies with a strong purpose, which Zeno defines as a company’s reason for being—its unique role and value in society that allows it to both grow the business and positively impact the world.

sweetgreen was founded in response to the fact that the legacy restaurant model failed to anticipate evolving consumer tastes and methods of engagement. We believe our brand and offering sit at the intersection of these powerful consumer trends shaping our industry.

Our Growth Strategies

At sweetgreen, our goal is to be a high-growth, profitable business that consistently delivers great outcomes for our customers, communities, and company. We believe we are well positioned to drive sustainable growth by investing in the following strategies:

Grow Our Restaurant Footprint

We are still in the very nascent stages of our journey, with only 140 sweetgreen restaurants in the United States as of September 26, 2021. One of our greatest immediate opportunities is to grow our footprint in both existing and new U.S. markets, and over time, internationally. From the end of fiscal year 2014 through the end of fiscal year 2020, we had 90 Net New Restaurant Openings and no permanent performance-related restaurant closures. We plan to open at least 30 domestic, company-owned restaurants in 2021 and to approximately double our current footprint of restaurants over the next three to five years.

• New Market Expansion: We see tremendous whitespace in new markets throughout the U.S. and are confident that sweetgreen is well positioned to meet the growing demand for convenient and healthy food. We plan to open in at least two to three new markets every year for the next three years. This will allow us to introduce sweetgreen to both new customers and existing customers that follow our brand to new cities. We feel confident in our market expansion strategy because of our recent success in new markets. For example, some of our

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new restaurants in Miami and Austin, which opened during the COVID-19 pandemic, have achieved strong initial sales volumes, which were significantly in excess of our expectations.

• Market Densification: As we have opened new restaurants in the same geographic market, we have not historically experienced cannibalization of our existing restaurants. In the markets in which we operated at the beginning of fiscal year 2014, we more than tripled our restaurant count from fiscal year 2014 to fiscal year 2019, and in parallel our AUV grew in those markets by approximately 85% over the same period. Although we continued to open new restaurants in those markets in fiscal year 2020, AUV in those markets decreased from fiscal year 2019 by 36% as a result of the impact of the COVID-19 pandemic.

• Additional Digital Capacity: Planning for future growth, we have intentionally built additional capacity in our existing restaurants for more digital revenue. All but one of our locations have been built with robust secondary lines that can flex up to handle more order volume without adding more costs or square footage. This allows us to quickly take advantage of the rising demand for off-premises dining.

• New Restaurant Formats: We plan to diversify our store formats by adding drive-thru and pick-up only locations to densify our markets, and to bring sweetgreen into a wider variety of neighborhoods.

Grow Brand Awareness and Community Presence

Our average aided brand awareness has significantly increased to 51% in August 2021 from 41% in November 2019. (See the section titled “Market, Industry, and Other Data” for additional information regarding aided brand awareness.) We plan to build upon the momentum we have generated to date by focusing on the following areas:

• Leverage Iconic Storefronts: Our customers do not go to just a sweetgreen, they go to their local sweetgreen. We purposefully design our restaurants to become iconic locations within each community we serve. We typically select high-traffic, popular locations for our restaurants so that they can serve as billboards, while also providing a human introduction to our offering. As we continue to grow, we will use our restaurants as strategic foundations to attract new customers and expand the reach of our brand.

• Amplify Collaborations: We plan to foster new collaborations with cultural influencers who believe in our mission. To date, we have told bold stories with some of the largest celebrities across food, music, and sports, including Naomi Osaka, David Chang, and others. We are confident that that these collaborations will continue to drive increased engagement with our community and put sweetgreen in a rare class of culturally minded companies. In a 2020 Evercore survey, we also ranked in the top three of fifteen favorite quick-service restaurant chains among ages 18-29, ahead of many popular brands.

• Build Our Social Community: Today, sweetgreen has over 500,000 social media followers across all of our platforms, which we believe is a core strength given the size of our current physical footprint. Social media allows us to tell deeper stories around our supply chain and our recipe development and connect with influential creators that speak to our mission. We intend to continue to leverage our social communities to amplify our voice and engage the next generation of healthy eaters who are aligned with our values.

Grow Our Owned Digital Customers

Maintaining direct relationships with our customers on our owned digital platform is a key strategic goal for sweetgreen. Not only are our owned digital users our most frequent customers, but the Average

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Order Value (which is the dollar value of an order exclusive of taxes and any fees paid by the customer) for orders placed on our Owned Digital Channels for our fiscal year to date through September 26, 2021 was 21% higher than Non-Digital orders placed through our In-Store Channel. While we have a significant digital presence relative to our current physical footprint, there are opportunities to continue to expand our digital business, including:

• Menu Exclusivity: We feature an expanded digital-only menu, such as curated “collections” and chef collaborations, only on our Owned Digital Channels. Additionally, our digital customers can only order certain items, like our seasonal salads and bowls, on our Native Delivery Channel (and not through our Marketplace Channel).

• Digital Promotions and Lower Prices: Customers on our Owned Digital Channels receive access to our Referral Program and an increasing number of targeted digital promotions based on their ordering history and preferences. We also typically price our menu offerings on our Native Delivery and Pickup Channels at a lower price point than our Marketplace Channel to ensure that our customers are receiving the best value when ordering directly with sweetgreen.

• Seamless + Personalized Ordering Experience: Given the customized nature of our menu, we have built unique features to enable a seamless and personalized ordering experience. From a visual ingredient selector and dietary preferences in-app to touchless scan-to-pay convenience via the app in-store, the sweetgreen digital experience is built to be the best way to order sweetgreen. Looking ahead, we see the opportunity to capitalize on macro-trends like personalized nutrition and subscription plans, to drive more users to our digital platform.

• Expand Our Multi-channel Approach: We believe that we can seamlessly expand into new revenue channels and formats, such as drive-thru, catering, and curbside pickup, in order to meet our customers where they are. We have proven the ability to rapidly scale new channels, as demonstrated by our Outpost Channel growing from pilot phase in 2018 to more than 1,000 locations by March 2020. While almost all of our Outposts were closed in 2020 due to the COVID-19 pandemic, as employees began returning to offices, we have quickly increased the number of Outposts in operation to 350 as of September 26, 2021.

• Leverage Performance Marketing: In order to drive customers from brand awareness to consideration to conversion, we have invested in robust customer relationship management (“CRM”) capabilities and paid media strategies across search, social media, and search engine optimization, as well as implemented mobile push notifications through our app. We plan to continue investing in efficient marketing through enhanced targeting capabilities, beta testing, and machine learning.

Grow Our Menu Offerings

We continuously focus on optimizing and improving our core menu offering, and we also believe our Food Ethos gives us permission to thoughtfully innovate our menu to expand our audience and grow all day-parts.

• Expand Core Ingredients.     We are constantly improving our existing recipes, ingredients, or sources, but also experimenting with new core items, such as plant-based proteins, new bases, or dressings appealing to our broadening customer base.

• New Menu Categories.     Salads and bowls are just the beginning of our culinary offering. Guided by our Food Ethos and leveraging our supply chain, we believe we can expand into new possible menu categories, such as broths, soups, desserts, and beverages to grow our day-parts and basket size.

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• Consumer Packaged Goods.     Our brand awareness also allows us the opportunity to expand beyond our core menu categories and into consumer packaged goods, such as dressing, sauces, or packaged produce.

Commitment to Profitable and Sustainable Growth

Our goal is to be capital efficient, profitable, and sustainable at scale.

To date, we have not achieved profitability in any fiscal period, in large part because we have consciously invested in our operating and technology foundation. We believe this foundation has positioned us to achieve the above growth strategies, while also implementing restaurant-level efficiencies (such as enhanced labor management, automation, and optimal store layouts) and economies of scale in our supply chain. We expect strategic investments in these key areas to result in strong AUV growth and an expansion of our Restaurant-Level Profit Margin.

As we accelerate our growth in the coming years, we expect to be able to do so efficiently, without significantly increasing our general and administrative costs. We are confident that this will enable topline growth and operational leverage, resulting in improved Adjusted EBITDA Margins.

Recent Developments

Spyce Acquisition

In September 2021, we completed the acquisition of Spyce Food Co. (“Spyce”), a Boston-based restaurant company powered by automation technology. The purpose of the acquisition is to serve our food with even better quality, consistency, and efficiency in our restaurants via automation. This investment has the potential to allow us to elevate our team member experience, provide a more consistent customer experience, and, over time, improve our capacity and throughput, which we believe will have a positive impact on Restaurant-Level Profit Margin.

Risk Factors Summary

Investing in our common stock involves substantial risks. The risks described in the section titled “Risk Factors” immediately following this summary may cause us to not realize the full benefits of our strengths or to be unable to successfully execute all or part of our strategy. Some of the more significant risks include the following:

• We operate in a highly competitive industry. If we are not able to compete effectively, it could have an adverse effect on our business, financial condition, and results of operations.

• Pandemics or disease outbreaks, such as the recent outbreak of COVID-19, have disrupted, and may continue to disrupt, our business, and have adversely affected our operations and results of operations.

• Changes in economic conditions and the customer behavior trends they drive, including long-term customer behavior trends following the COVID-19 pandemic, which are uncertain, could have an adverse effect on our business, financial condition, and results of operations.

• Our future growth depends significantly on our ability to open new restaurants and is subject to many unpredictable factors.

• Our long-term success is highly dependent on our ability to effectively identify and secure appropriate sites for new restaurants.

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• Our expansion into new markets may present increased risks.

• New restaurants, once opened, may not be profitable, and the increases in Average Unit Volume that we have experienced in the past may not be indicative of future results, and new restaurants may negatively impact sales at our existing restaurants.

• Our success depends substantially on the value of our brand and failure to preserve its value or changes in customer recognition of our brand, including due to negative publicity, could have a negative impact on our business, financial condition, and results of operations.

• Food safety and foodborne illness concerns could have an adverse effect on our business.

• We have incurred significant losses since inception. We expect our operating expenses to increase significantly in the foreseeable future, as we grow our business, increase our new restaurant openings, and invest into new technology, and we may not achieve profitability.

• Increases in labor costs, labor shortages, and any difficulties in attracting, motivating and retaining well-qualified employees could have an adverse effect on our business, financial condition, and results of operations.

• Acquisitions could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our results of operations and expansion prospects.

• Governmental regulation may adversely affect our business, financial condition, and results of operations.

• Changes in employment laws may increase our labor costs and impact our results of operations.

• We have been and will likely continue to be party to litigation that could distract management, increase our expenses, or subject us to monetary damages or other remedies.

• If we experience a serious cybersecurity incident, or the confidentiality, integrity, or availability of our information technology, software, services, communications, or data is compromised, our platform may be perceived as not being secure, our reputation may be harmed, demand for our products and services may be reduced, and we may incur significant liabilities.

• We are subject to rapidly changing and increasingly stringent laws, regulations, industry standards, and other obligations relating to privacy, data protection, and data security. The restrictions and costs imposed by these requirements, or our actual or perceived failure to comply with them, could harm our business.

• We may not be able to adequately protect or enforce our rights in our intellectual property, which could harm the value of our brand and have an adverse effect on our business, financial condition, and results of operations.

• The dual-class structure of our common stock has the effect of concentrating voting control with our founders, who have substantial control over us and will be able to influence corporate matters.

Our Dual-Class Capital Structure

Upon the completion of this offering, we will have two classes of authorized common stock: Class A common stock and Class B common stock. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible into one share of Class A common stock. Immediately following the completion of this

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offering, all outstanding shares of our Class B common stock will be beneficially owned by our founders, Jonathan Neman, Nicolas Jammet, and Nathaniel Ru, who will collectively represent approximately 59.6% of the voting power of our outstanding capital stock, assuming no exercise of the underwriters’ option to purchase additional shares, and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors and the approval of any change in control transaction. See the section titled “Description of Capital Stock” for more information.

Channels for Disclosure of Information

Following the closing of this offering, we intend to announce material information to the public through filings with the SEC, the investor relations page on our website, press releases, public conference calls, public webcasts, and our Instagram page.

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Corporate Information

We were founded in November 2006 and incorporated in October 2009 in Delaware. Our principal executive offices, which we refer to as our sweetgreen Support Center, are located at 3101 W. Exposition Boulevard, Los Angeles, CA 90018, and our telephone number is (323) 990-7040. Our website address is www.sweetgreen.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus. The inclusion of our website address in this prospectus is only as an inactive textual reference.

Implications of Being an Emerging Growth Company

We are an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups (“JOBS”) Act. The JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act for the adoption of certain accounting standards until the earlier of the date we (i) are no longer an EGC or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, we are not required to, among other things (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion

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and analysis), and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

We will remain an EGC under the JOBS Act until the earliest of (i) the last day of our first fiscal year following the fifth anniversary of the closing of our initial public offering, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

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The Offering

Class A common stock offered by us	12,500,000 shares
Option to purchase additional shares of Class A common stock offered by us	1,875,000 shares
Class A common stock to be outstanding immediately after this offering	92,834,226 shares (or 94,709,226 shares, assuming the option to purchase additional shares of Class A common stock is exercised in full)
Class B common stock to be outstanding immediately after this offering	13,477,303 shares
Total Class A common stock and Class B common stock to be outstanding immediately after this offering	106,311,529 shares (or 108,186,529 shares, assuming the option to purchase additional shares of Class A common stock is exercised in full)
Use of proceeds	We estimate that our net proceeds from the sale of our Class A common stock that we are offering will be approximately $274.5 million (or approximately $316.8 million if the underwriters’ option to purchase additional shares of our Class A common stock from us is exercised in full), assuming an initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock and facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including developing the technology acquired in our recent acquisition of Spyce Food Co. See the section titled “Use of Proceeds” for additional information.
Voting rights	Following this offering, we will have two classes of common stock: Class A common stock and Class B common stock. Each share of our Class A common stock is entitled to one vote per share. Each share of our Class B common stock is entitled to ten votes per share.

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Holders of our Class A common stock and Class B common stock will generally vote together as a single class, unless otherwise required by law or our amended and restated certificate of incorporation that will be in effect upon the completion of this offering. Following the completion of this offering, each share of our Class B common stock will be convertible into one share of our Class A common stock at any time and will convert automatically upon the sale or transfer of such share of Class B common stock (except for certain permitted transfers described in our amended and restated certificate of incorporation, including transfers for tax and estate planning purposes or to any other founder or any affiliate of any founder) and in certain other circumstances as described in our amended and restated certificate of incorporation. See the section titled “Description of Capital Stock” for additional information. Immediately following the completion of this offering, all outstanding shares of our Class B common stock will be beneficially owned by our founders, Jonathan Neman, Nicolas Jammet, and Nathaniel Ru, who will collectively represent approximately 59.6% of the voting power of our outstanding capital stock, assuming no exercise of the underwriters’ option to purchase additional shares, and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors and the approval of any change in control transaction. See the section titled “Principal Stockholders” for additional information.

Directed Share Programs

At our request, the underwriters have reserved up to 5% of the shares of Class A common stock offered by this prospectus for sale at the initial public offering price through a directed share program to certain individuals identified by management. In addition, at our request, the underwriters have reserved up to 1% of the shares of Class A common stock offered by this prospectus for sale at the initial public offering price through a separate directed share program to eligible customers of the company. This customer directed share program will be arranged through and administered by a third-party program administrator, Robinhood Financial LLC, as a selling group member via its online brokerage platform. Any shares sold

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	under these directed share programs will not be subject to the terms of any lock-up agreement. The number of shares of Class A common stock available for sale to the general public will be reduced by the number of reserved shares sold to these individuals and eligible customers under these directed share programs. Any reserved shares not purchased by these individuals and eligible customers will be offered by the underwriters to the general public on the same basis as the other shares of Class A common stock offered under this prospectus. For more information on each of these directed share programs, see the section titled “Underwriting—Directed Share Programs.”
Risk factors	You should carefully read the section titled “Risk Factors” and the other information included in this prospectus for a discussion of facts that you should consider before deciding to invest in shares of our Class A common stock.
Proposed NYSE trading symbol	“SG”

The number of shares of our Class A common stock and Class B common stock that will be outstanding after this offering is based on 80,334,226 shares of our Class A common stock and 13,477,303 shares of our Class B common stock outstanding as of September 26, 2021, after giving effect to the Reclassification and Exchange and Spyce Conversion (each as defined below) as if they had occurred as of September 26, 2021, and excludes:

• 6,015,384 shares of Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 under our 2009 Equity Incentive Plan (the “2009 Plan”), with a weighted-average exercise price of $3.28 per share;

• 7,963,985 shares of our Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 under our 2019 Equity Incentive Plan (the “2019 Plan”), with a weighted-average exercise price of $9.61 per share;

• 8,330,125 shares of our Class A common stock issuable upon the vesting and settlement of restricted stock units granted after September 26, 2021 under our 2019 Plan;

• 83,224 shares of our Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 assumed in connection with our acquisition of Spyce Food Co., with a weighted-average exercise price of $8.74 per share;

• 55,000 shares of our Class A common stock issuable upon the exercise of warrants to purchase shares of our common stock outstanding as of September 26, 2021;

• 235,000 shares of our Class A common stock issuable upon the exercise of a warrant to purchase shares of our Series F preferred stock (the “Series F Warrant”) outstanding as of September 26, 2021;

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• 403,171 shares of our Class A common stock (based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus) issuable upon the vesting and settlement of restricted stock units to be granted under our 2021 Plan (as defined below) to certain employees in connection with the Spyce acquisition following the completion of this offering;

• up to 833,333 shares of our Class A common stock (based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus) issuable to the former stockholders of Spyce upon the achievement of certain milestones;

• approximately 375,000 shares of our Class A common stock issuable upon the vesting and settlement of restricted stock units to be granted under our 2021 Plan following the completion of this offering;

• up to 35,166,753 shares of Class A common stock reserved under our 2021 Equity Incentive Plan (the “2021 Plan”), which is the sum of (i) 11,500,000 new shares reserved for future issuance and (ii) 23,666,753 shares, which as of the date our board of directors approved the 2021 Plan was the sum of (x) the number of shares that remained available for grant of future awards under the 2019 Plan and will cease to be available for issuance under the 2019 Plan at the time our 2021 Plan becomes effective in connection with this offering and (y) the number of shares underlying outstanding awards granted under our 2009 Plan and 2019 Plan (which shares become available for issuance pursuant to the 2021 Plan to the extent that such shares expire, or are forfeited, cancelled, withheld, or reacquired), as well as any future increases in the number of shares of Class A common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans;” and

• 3,000,000 shares of Class A common stock reserved for issuance under our 2021 Employee Stock Purchase Plan (the “ESPP”), which will become effective in connection with this offering, as well as any future increases in the number of shares of Class A common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans.”

In addition, unless we specifically state otherwise, the information in this prospectus assumes:

• the filing and effectiveness of our amended and restated certificate of incorporation and the effectiveness of our amended and restated bylaws, each of which will occur immediately prior to the completion of this offering;

• the issuance of 1,150,400 shares of our Class A common stock, which is the estimated number of shares issuable upon the automatic net exercise of outstanding Series J preferred stock warrants, which will become exercisable for Class A common stock in connection with this offering, based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, as of September 26, 2021 (the “Series J Warrant Net Exercise”);

• (i) the automatic conversion of 69,231,197 outstanding shares of preferred stock into an equivalent number of shares of common stock, resulting in an aggregate of 92,275,303 outstanding shares of common stock (including the 1,150,400 shares to be issued in connection with the Series J Warrant Net Exercise) and (ii) the reclassification of the 92,275,303 outstanding shares of common stock into an equivalent number of shares of Class A common stock, both of which will occur immediately prior to the completion of this offering,

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and the subsequent exchange of an aggregate of 13,477,303 shares of Class A common stock held by Messrs. Neman, Jammet, and Ru into an equivalent number of shares of Class B common stock in connection with the completion of this offering pursuant to the terms of an exchange agreement entered into with us (collectively, the “Reclassification and Exchange”);

• the automatic conversion of 1,843,493 shares of the Class S stock issued in connection with our acquisition of Spyce in September 2021 into 1,536,226 shares of Class A common stock (based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus), which will occur immediately prior to the completion of this offering (the “Spyce Conversion”);

• no exercise of the outstanding warrants (other than the Series J Warrant Net Exercise) or stock options, or settlement of the restricted stock units described above; and

• no exercise of the underwriters’ option to purchase up to an additional 1,875,000 shares of Class A common stock from us in this offering.

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Summary Consolidated Financial and Other Data

The summary consolidated statements of operations data for the fiscal years ended December 29, 2019 and December 27, 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statements of operations data for the thirteen and thirty-nine weeks ended September 27, 2020 and September 26, 2021 and the summary consolidated balance sheet data as of September 26, 2021 have been derived from our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. The unaudited interim condensed consolidated financial statements were prepared on a basis consistent with our audited financial statements and include, in management’s opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of the financial information set forth in those statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future and our interim results are not necessarily indicative of our expected results for the year ending December 26, 2021 or any other period. You should read the following summary financial and other data together with the sections titled “Selected Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus. The selected financial data included in this section are not intended to replace the financial statements and are qualified in their entirety by our consolidated financial statements and the related notes included elsewhere in this prospectus.

	Fiscal Year Ended						Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	Dec. 27, 2020			Dec. 29, 2019			Sept. 26, 2021			Sept. 27, 2020			Sept. 26, 2021			Sept. 27, 2020
							(unaudited)
	(in thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenue	$	220,615		$	274,151		$	95,844		$	55,549		$	243,448		$	161,435
Restaurant operating costs (exclusive of depreciation and amortization presented separately below):
Food, beverage and packaging		66,154			83,966			26,701			16,939			67,125			48,857
Labor and related expenses		83,691			86,547			30,316			22,727			79,343			61,348
Occupancy and related expenses		43,775			37,050			14,053			11,301			35,919			32,268
Other restaurant operating costs		35,697			22,613			11,640			9,288			33,001			25,306
Total restaurant operating costs		229,317			230,176			82,710			60,255			215,388			167,779
Operating expenses:
General and administrative		99,142			88,818			28,944			23,335			78,395			72,168
Depreciation and amortization		26,851			19,416			9,303			6,624			25,558			18,831
Pre-opening costs		4,551			5,405			2,789			1,741			6,256			3,592
Impairment of long-lived assets		1,456			-			4,415			-			4,415			-
Loss on disposal of property and equipment		891			409			-			441			56			586
Total operating expenses		132,891			114,048			45,451			32,141			114,680			95,177
Loss from operations		(141,593	)		(70,073	)		(32,317	)		(36,847	)		(86,620	)		(101,521	)
Interest income		(1,018	)		(2,724	)		(78	)		(128	)		(299	)		(940	)
Interest expense		404			88			23			140			65			306
Other expense		245			480			(2,196	)		-			608			(731	)
Net loss before income taxes		(141,224	)		(67,917	)		(30,066	)		(36,859	)		(86,994	)		(100,156	)
Income tax provision		-			-			-			-			-			-
Net loss	$	(141,224	)	$	(67,917	)	$	(30,066	)	$	(36,859	)	$	(86,994	)	$	(100,156	)
Earnings per share:
Net loss per share, basic and diluted(1)	$	(8.80	)	$	(4.50	)	$	(1.58	)	$	(2.25	)	$	(4.88	)	$	(6.32	)
Weighted-average shares used in computing net loss per share, basic and diluted(1)		16,051,960			15,080,984			19,084,124			16,403,415			17,836,525			15,834,995
Pro forma net loss per share, basic and diluted (unaudited)(2)	$	(1.87	)				$	(0.43	)				$	(1.09	)
Weighted-average shares used in computing pro forma net loss per share, basic and diluted (unaudited)(2)		78,614,011						89,400,854						87,334,209

(1) See Notes 1 and 14 to our audited consolidated financial statements and Notes 1 and 13 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus for explanations of the calculations of our basic and diluted loss per share attributable to common stockholders and the weighted-average number of shares used in the computation of the per share amounts.

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(2) Basic and diluted unaudited pro forma net loss per share attributable to common stockholders for the year ended December 27, 2020 and the thirteen and thirty-nine weeks ended September 26, 2021 gives effect to (i) the Reclassification and Exchange as if it had occurred as of the beginning of the period or on the date of issuance of the preferred stock or warrant (as applicable), if later, (ii) stock-based compensation expense related to stock options subject to service-based and performance-based vesting conditions, for which the performance-based vesting condition will be satisfied in connection with this offering, and (iii) the Spyce Conversion, as if the Spyce Conversion had occurred as of the beginning of the period or on the date of issuance of the Class S stock, if later.

The table presented below sets forth the calculation of basic and diluted unaudited pro forma net loss per share attributable to common stockholders for the year ended December 31, 2020 and the thirteen and thirty-nine weeks ended September 26, 2021:

	Fiscal Year Ended Dec. 27, 2020			Thirteen Weeks Ended Sept. 26, 2021			Thirty-Nine Weeks Ended Sept. 26, 2021
				(unaudited)
	(dollar amounts in thousands)
Numerator:
Net loss	$	(141,224	)	$	(30,066	)	$	(86,994	)
Change in fair value of preferred stock warrant liability*		-			2,896			2,896
Stock-based compensation expense related to stock options subject to service-based and performance-based vesting conditions, for which the performance-based vesting condition will be satisfied in connection with this offering		5,418			5,418			5,418
Net loss used to compute pro forma net loss per share, basic and diluted	$	(146,642	)	$	(38,380	)	$	(95,308	)
Denominator:
Weighted-average common shares outstanding—basic and diluted		16,051,960			19,084,124			17,836,525
Pro forma adjustment to reflect the assumed conversion of preferred stock pursuant to the Reclassification and Exchange		62,562,051			69,231,197			68,495,629
Pro forma adjustment to reflect the Series J Warrant Net Exercise*		-			1,150,400			1,023,518
Pro forma adjustment to reflect the Spyce Conversion*		-			(64,867	)		(21,464	)
Weighted-average shares used to calculate pro forma net loss per share, basic and diluted		78,614,011			89,400,854			87,334,209
Pro forma net loss per share, basic and diluted	$	(1.87	)	$	(0.43	)	$	(1.09	)

* Based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus.

	Fiscal Year Ended				Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	Dec. 27, 2020		Dec. 29, 2019		Sept. 26, 2021		Sept. 27, 2020		Sept. 26, 2021		Sept. 27, 2020
	(dollar amounts in thousands)
Key Performance Metrics:
Net New Restaurant Openings(1)		15		15		11		7		21		11
Average Unit Volume (as adjusted)(2)	$	2,194	$	2,967	$	2,459	$	2,313	$	2,459	$	2,313
Same-Store Sales Change (as adjusted) (%)(3)		(26%)		15%		43%		(34%)		21%		(26%)
Restaurant-Level Profit(4)	$	(8,702)	$	43,975	$	13,134	$	(4,706)	$	28,060	$	(6,344)
Restaurant-Level Profit Margin (%)(4)		(4%)		16%		14%		(8%)		12%		(4%)
Adjusted EBITDA(4)	$	(107,483)	$	(46,344)	$	(14,085)	$	(28,408)	$	(48,928)	$	(78,472)
Adjusted EBITDA Margin (%)(4)		(49%)		(17%)		(15%)		(51%)		(20%)		(49%)
Total Digital Revenue Percentage(5)		75%		50%		63%		79%		68%		74%
Owned Digital Revenue Percentage(5)		56%		43%		43%		58%		47%		57%

(1) We define Net New Restaurant Openings as the number of new sweetgreen restaurant openings during a given reporting period, net of any permanent sweetgreen restaurant closures during the same period.

(2) We define AUV as the average trailing revenue for the prior four fiscal quarters for all restaurants in the Comparable Restaurant Base. The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our

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restaurants. See the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Metrics” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, AUV for the periods presented.

(3) Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full months as of the end of such fiscal period; provided, that for any restaurant that has had a temporary closure during any prior or current fiscal period, such fiscal period, as well as the corresponding fiscal period for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and closures. See the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Metrics” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, Same-Store Sales Change for the periods presented.

(4) Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin are financial measures that are not calculated in accordance with GAAP. See the section titled “Selected Consolidated Financial and Other Data—Non-GAAP Financial Measures” for more information, including the limitations of such measures, and a reconciliation each of these measures to the most directly comparable financial measure stated in accordance with GAAP.

(5) Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Total Digital Channels. Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels.

	As of September 26, 2021
	Actual			Pro Forma(1)		Pro Forma As Adjusted(2)(3)
	(unaudited)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	137,031		$	137,031		$411,531
Working capital(4)		113,581			113,581		388,081
Total assets		406,000			406,000		680,500
Total liabilities		118,721			113,679		113,679
Preferred stock		614,496			-		-
Total stockholders’ (deficit) equity		(327,217	)		292,321		566,821

(1) The pro forma consolidated balance sheet data gives effect to (i) the Reclassification and Exchange, (ii) the Spyce Conversion, and (iii) the filing and effectiveness of our amended and restated certificate of incorporation that will be in effect upon the completion of this offering.

(2) The pro forma as adjusted consolidated balance sheet data reflects (i) the items described in footnote (1) above and (ii) our receipt of estimated net proceeds from the sale of shares of Class A common stock that we are offering at an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

(3) Each $1.00 increase (decrease) in the assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) each of our cash and cash equivalents, total assets, working capital and total stockholders’ equity by $11.8 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares of Class A common stock offered by us would increase (decrease) each of our cash and cash equivalents, total assets, working capital and total stockholders’ equity by $22.6 million, assuming the assumed initial public offering price of $24.00 per share remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

(4) Working capital is defined as current assets less current liabilities. See our consolidated financial statements and the related notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities.

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RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, including our consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in shares of our Class A common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occurs, our business, financial condition, results of operations, and prospects could be adversely affected. In this case, the trading price of our Class A common stock could decline and you might lose part or all your investment.

Risks Related to Our Business, Our Brand and Our Industry

We operate in a highly competitive industry. If we are not able to compete effectively, it could have an adverse effect on our business, financial condition, and results of operations.

We face significant competition from restaurants in the fast-casual dining and traditional fast-food segments of the restaurant industry. These segments are highly competitive with respect to, among other things, taste, price, food quality and presentation, service, location, and the ambience and condition of each restaurant. Our competition includes a variety of locally owned restaurants and national and regional chains offering dine-in, carry-out, delivery, and catering services. Many of our competitors have existed longer and have a more established market presence with substantially greater financial, marketing, personnel, and other resources than we do, and as a result, these competitors may be better positioned to succeed in the highly competitive restaurant industry. Among our competitors are a number of multi-unit, multi-market, fast-food, or fast-casual restaurant concepts, some of which are expanding nationally, including companies like Chipotle, McDonalds, Panera Bread, and Shake Shack, as well as other quick service salad and health food concepts.

As we expand into new geographic markets and further develop our digital channels (including our Owned Digital Channels), we will face competition from these restaurants as well as new competitors that strive to compete with our market segments, particularly as many of our competitors have increased their digital presence to better navigate the COVID-19 pandemic, including by enabling delivery and take-out through their digital applications. In particular, we will face increasing competition from delivery kitchens, food aggregators and food delivery marketplaces (such as Doordash, GrubHub, Uber Eats, and others), grocery stores (particularly those that focus on freshly prepared and organic food), and other companies that are enabling the delivery of food to customers, including such delivery marketplaces that we partner with to deliver sweetgreen food to customers. These food delivery marketplaces own the customer data for sweetgreen orders placed on such marketplaces and may use such customer data to encourage these customers to order from other restaurants on their marketplaces. Competition from food aggregators and food delivery marketplaces has also increased in recent years, particularly with the significant increase in restaurants that previously focused on dine-in service and have increased their reliance on take-out or delivery during the COVID-19 pandemic, and competition is expected to continue to increase. Any of these competitors may have, among other things, greater operational or financial resources, lower operating costs, better locations, better facilities, better management, better digital technology, increased automation and production efficiency, more effective marketing, and more efficient operations. Additionally, we face the risk that new or existing competitors will copy, and potentially improve upon, our business model, menu options, technology, presentation, or ambience, among other things.

Any inability to successfully compete with the restaurants or other food companies in our markets and other restaurant segments will place downward pressure on our customer traffic and/or pricing and

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may prevent us from increasing or sustaining our growth rate or revenue and reaching profitability. Customer tastes, nutritional and dietary trends, methods of ordering, traffic patterns and the type, number, and location of competing restaurants, and ability to timely and effectively deliver food often affect the restaurant business, and our competitors may react more efficiently and effectively to those conditions. In addition, many of our restaurant competitors offer lower-priced menu options, meal packages, loyalty programs, or offer breakfast, whereas we currently offer only lunch and dinner. Our sales could decline due to changes in popular tastes, “fad” food regimens, and media attention on new restaurants. We cannot make any assurances regarding our ability to effectively respond to changes in consumer health perceptions or our ability to adapt our menu offerings to trends in eating habits. Because of the ample competition in our industry, if our menu does not continue to innovate and provide premier quality food, we may lose customers as a result of a lack of variety or quality. In addition, both fast-food and fast-casual dining segments have implemented deep discounting strategies to attract customers, while in 2021 we suspended our loyalty program, focused on more targeted promotions, and increased the menu prices of certain items. If we are unable to continue to compete effectively, our traffic, sales, and restaurant contribution could decline, which would have an adverse effect on our business, financial condition, and results of operations.

Pandemics or disease outbreaks, such as the recent outbreak of COVID-19, have disrupted, and may continue to disrupt, our business, and have adversely affected our operations and results of operations.

Pandemics or disease outbreaks such as COVID-19 have made and may make it more difficult to staff our restaurants and could cause a temporary inability to obtain supplies and increase commodity costs. At the beginning of the COVID-19 pandemic, we were initially forced to temporarily close some of our restaurants and for a prolonged period of time shifted to a “to-go” and delivery operating model. We have only recently resumed indoor sit-down dining at most of our locations. Even in those locations where we have resumed sit-down dining, our capacity has frequently been limited by local regulations. Additionally, vaccination mandates for restaurants operating indoor dining are currently in effect or contemplated in the markets in which we operate, including New York City, Los Angeles, and San Francisco. In response to these mandates, we may need to either close certain of our indoor dining rooms and shift back to outdoor dining (if available and if weather permits) and an off-premises dining operating model or terminate employees who have not submitted proof of vaccination status and check our customers’ vaccination status and corresponding identification (such as driver’s license or passport). For example, we recently announced that we will require all employees in our New York City stores to show proof of at least one dose of vaccine by December 1, 2021 in order to permit us to reopen indoor dining in that market. Any employee who does not submit proof of one dose of vaccine by that date will be terminated (unless a reasonable accommodation has been granted). Further, the Biden administration has proposed an employer vaccination mandate which, if implemented, has a deadline of January 4, 2022 for employees to either be fully vaccinated (with four hours of paid time off required per each dose of vaccine and required paid wellness time for employees to recover from any health effect from getting the vaccine) or to undergo weekly testing. To date, we have had significant challenges with our team members submitting proof of COVID-19 vaccinations. We are continuing to evaluate how we will implement the Biden employer vaccination mandate, which could result in potentially significant employee layoffs, staffing shortages and related restaurant closures if not enough of our employees are vaccinated, as well as customer frustration and increased labor costs as a result of having to check vaccination statuses, all of which could have a material and adverse impact on sales and negatively impact our brand. Alternatively, if we choose to close our indoor dining rooms, sales from our In-Store Channel would likely suffer significantly.

We have also had to incur significant additional costs to ensure the setup and maintenance of our restaurants comply with any regulations, which have changed frequently during the COVID-19 pandemic. We cannot predict when these restrictions will be lifted, which will allow our restaurants to return to full

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occupancy. We have also implemented modified hours or reductions in on-site staff, resulting in cancelled shifts for some of our employees, and in 2020 temporarily furloughed approximately 2,000 of our restaurant employees for up to 90 days. The COVID-19 pandemic may also adversely affect our ability to implement our growth plans, recruit new team members, and cause delays in construction, permitting, or opening of new restaurants, as well as have an adverse impact on our overall ability to successfully execute our plans to enter into new markets. These and any additional changes may adversely affect our business or results of operations in the future, and may impact our liquidity or financial condition, particularly if these changes are in place for a significant amount of time.

In addition, our operations have been further disrupted when employees are suspected of having COVID-19 or other illnesses (or are suspected to have been exposed to or a close contact of someone who has tested positive for COVID-19) since this has required us to quarantine some or all those employees and close and disinfect our impacted restaurant facilities. If a significant percentage of our workforce is unable to work, including because of illness (or suspected COVID-19 exposure) or travel or government restrictions, including mandatory quarantines, in connection with pandemics or disease outbreaks, our operations may be negatively impacted, potentially adversely affecting our business, liquidity, financial condition, or results of operations. Moreover, in addition to the COVID-19-related sick leave that we adopted voluntarily, many jurisdictions, such as New York and California, have required that companies provide mandatory supplemental sick leave for COVID-19-related leave, including to care for a sick family member and to receive (and recover from) a COVID-19 vaccination. In addition, we are required by local and state regulations to report employees who have contracted or been exposed to the virus. Additional regulation or requirements with respect to the compensation of our employees could also have an adverse effect on our business.

Furthermore, such viruses may be transmitted through human contact and airborne delivery, and the risk of contracting viruses could continue to cause customers or employees to avoid gathering in public places, which has had, and could further have, adverse effects on our restaurant customer traffic or the ability to adequately staff restaurants. We have been adversely affected when government authorities have imposed and continue to impose restrictions on public gatherings, human interactions, operations of restaurants or mandatory closures, seek voluntary closures, restrict hours of operations or impose curfews. Even if such measures are not implemented and a virus or other disease does not spread significantly within a specific area, the perceived risk of infection or health risk in such area may adversely affect our business, liquidity, financial condition, and results of operations. Additionally, different jurisdictions have seen varying levels of outbreaks or resurgences in outbreaks, and corresponding differences in government responses, which may make it difficult for us to plan or forecast an appropriate response.

The ability of local and national authorities to contain COVID-19 and limit the spread of infections will impact our business operations. The United States may fail to fully contain COVID-19 or suffer a resurgence in COVID-19. For example, new developments like the Delta variant and measures taken to contain it may require us to make significant changes to how we operate and may adversely affect our business, financial condition, and results of operations for an uncertain period of time.

Changes in economic conditions and the customer behavior trends they drive, including long-term customer behavior trends following the COVID-19 pandemic, which are uncertain, could have an adverse effect on our business, financial condition, and results of operations.

The restaurant industry depends on customer discretionary spending. The United States in general, or the specific markets in which we operate, may suffer from depressed economic activity, recessionary economic cycles, higher fuel or energy costs, low customer confidence, high levels of unemployment, reduced home values, increases in home foreclosures, investment losses, personal bankruptcies, reduced access to credit or other economic factors that may affect customer

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discretionary spending. Consumer preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected. Traffic in our restaurants and the volume of pickup or our Native Delivery, Outpost, and Marketplace Channels could decline if customers choose to reduce the amount they spend on meals or choose to spend more on food from grocery stores as opposed to our ordering from our restaurants. Negative economic conditions might cause customers to make long-term or permanent changes to their discretionary spending behavior, including as it relates to dining out, picking up, or ordering delivery. For example, our customers may choose to order from us less frequently, purchase meals at a lower-priced competitor such as McDonalds or Chipotle, or order through a delivery marketplace, such as Uber Eats or Doordash, which could have an adverse effect on our business, financial condition, and results of operations. COVID-19, and most recently the Delta variant, had a negative impact on our assumptions for future near-term restaurant level cash flows, which resulted in elevated impairment charges in the thirteen and thirty-nine weeks ended September 26, 2021. Prolonged negative trends in sales could cause us in the future to, among other things, reduce the number and frequency of new restaurant openings, close restaurants or delay remodeling our existing restaurants, or recognize further asset impairment charges.

The COVID-19 pandemic and mitigation measures have also had an adverse impact on global economic conditions, which have had an adverse effect on our business and financial condition. Our sales and results of operations may be affected by uncertain or changing economic and market conditions arising in connection with and in response to the COVID-19 pandemic, including prolonged periods of high unemployment, inflation, deflation, prolonged weak customer demand, a decrease in customer discretionary spending, political instability, prolonged periods of corporate employees working from home or other changes. The significance of the operational and financial impact to us will depend on how long and widespread the disruptions caused by COVID-19, and the corresponding response to contain the virus and treat those affected by it, prove to be.

Further, during the COVID-19 pandemic, our in-restaurant foot traffic has significantly declined, our Outpost Channel has significantly diminished, and our Native Delivery and Marketplace Channels have significantly increased. Post-pandemic long-term customer behavior trends are uncertain for all of our channels and the duration of such trends is unknown. In particular, it is uncertain whether workers will return to offices in urban centers on a consistent basis, and even if they do, whether they will have a more flexible work schedule, which could reduce our revenues at our urban locations. If the shift toward remote work continues even after the COVID-19 pandemic has ended and workers do not return to offices in urban centers, or work from those locations less frequently, our business, financial condition, and results of operations could be adversely affected for an uncertain period of time, even if customers otherwise resume pre-pandemic levels of discretionary spending. As a result, we may make the decision to temporarily or permanently close certain of our impacted locations.

Our future growth depends significantly on our ability to open new restaurants and is subject to many unpredictable factors.

One of the key means of achieving our growth strategy for the foreseeable future will be through opening new restaurants and operating those restaurants on a profitable basis. During both fiscal year 2019 and fiscal year 2020, we had 15 Net New Restaurant Openings, and we had 21 Net New Restaurant Openings year to date through September 26, 2021, with a plan to open an aggregate of at least 30 domestic, company-owned restaurants in 2021 and to approximately double our current footprint of restaurants over the next three to five years. In the past, we have experienced delays in opening a significant number of our restaurants due to, among other things, construction and permitting delays in new developments. Such delays could happen again in future restaurant openings, especially if the COVID-19 pandemic continues, which has significantly impacted our ability to complete construction of our new restaurants and also our ability to receive the necessary permits to open new restaurants.

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Additionally, due to recent staffing and hiring issues in the restaurant industry throughout the country, we may not have sufficient staffing or labor in order to open our new restaurants on schedule, or at full capacity. Delays or failures in opening new restaurants, or in launching new restaurant formats (including walk-up, drive-in, or drive-thru formats or store formats incorporating automation technology), could cost significant company resources (including lost sales and additional labor and marketing costs) and have an adverse effect on our growth strategy and our business, financial condition, and results of operations. As we operate more restaurants, our rate of expansion relative to the size of our restaurant base could decline.

Our long-term success is highly dependent on our ability to effectively identify and secure appropriate sites for new restaurants.

One of our challenges is locating and securing an adequate supply of suitable new restaurant sites, both in new geographic markets and in our existing geographic markets where we may already be located at the most desirable restaurant sites. Competition for those sites is intense, and other restaurant and retail concepts that compete for those sites may have economic models that permit them to bid more aggressively for sites than we can. There is no guarantee that a sufficient number of suitable sites will be available in desirable areas or on terms that are acceptable to us in order to achieve our growth plan or meet our economic objectives in new or existing geographic markets. Our ability to identify, secure, and open new restaurant sites also depends on other factors, many of which are likely to be more challenging if the COVID-19 pandemic continues, including:

• identifying and securing an appropriate site and selecting the best restaurant format for that given site and market (including determining whether to test new restaurant formats, including any formats incorporating automation technology), which includes maximizing the effectiveness of our multi-channel approach, the size of the site, traffic patterns, local retail and business attractions and infrastructure that will drive high levels of customer traffic and sales, proximity of potential restaurant sites to existing restaurants, and anticipated commercial, residential and infrastructure development near the potential restaurant site, and many of these factors are uncertain as we recover from the COVID-19 pandemic;

• negotiating leases with acceptable terms;

• receiving timely delivery of leased premises to us from our landlords and the punctual commencement of our build-out construction activities;

• obtaining tenant improvement allowances from our landlords;

• analyzing financial conditions affecting developers and potential landlords, such as ability of landlords and developers to receive development financing, the effects of macro-economic conditions, and the credit market, which could lead to these parties delaying or canceling development projects (or renovations of existing projects), in turn reducing the number of appropriate restaurant sites available;

• managing construction and development costs of new restaurants, particularly in competitive markets;

• obtaining construction materials and labor at acceptable costs;

• maintaining qualified real estate and construction resources to source and manage construction of new sites;

• securing required governmental approvals, permits and licenses (including construction, certificates of occupancy and other permits) in a timely manner and responding effectively to any changes in local, state or federal laws and regulations;

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• avoiding the impact of inclement weather, natural disasters and other calamities; and

• identifying, hiring, and training qualified employees in each local market.

Given the numerous factors involved, we may not be able to successfully identify and secure a sufficient number of attractive restaurant sites in existing, adjacent or new markets, which could have an adverse effect on our business, financial condition, and results of operations. And, for those locations where we are able to secure an attractive restaurant site, our progress in opening new restaurants may occur at an uneven rate. If we do not open new restaurants in the future according to our current plans, the delay could have an adverse effect on our business, financial condition, and results of operations.

Our expansion into new markets may present increased risks.

We have opened and plan to continue opening restaurants in markets where we have little or no operating experience. In particular, our restaurants have historically been heavily concentrated in large urban areas (such as New York City, Los Angeles, Boston, and the Washington, D.C./Maryland/Virginia metropolitan areas), and we do not currently have any restaurants in any markets outside of the United States. Restaurants we open in new markets may take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, product, hiring and training, occupancy, or operating costs than restaurants we open in existing markets, thereby affecting our overall profitability. New markets may have competitive conditions, customer tastes and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets, particularly as we expand outside of large metropolitan areas and into more suburban and residential areas, as well as more diverse geographic markets. We may also need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness and attract new customers. In addition, because we try to locally source as much of our supply chain as practicable, we may have difficulty sourcing our ingredients from local suppliers and distributors that are in close proximity to our new markets and that meet our quality standards and are appropriate for our distribution model and Food Ethos. Because of the local nature of our supply chain, our costs of goods may increase significantly in a new market and supply chain availability may be limited by the climate and the grower network in a specific market. We may find it more difficult in new markets to hire, motivate and keep qualified employees who share our vision, passion and culture. We may also incur higher costs from entering new markets if, for example, we assign regional managers to manage comparatively fewer restaurants than in more developed markets, if our local supply chain only supplies ingredients for comparatively fewer restaurants or if we need to comply with new labor and employment regulations in such market. As a result, these new restaurants may be less successful or may not achieve desired growth rates or sales targets as quickly as our existing restaurants across our multiple channels. We may not be able to successfully develop critical market presence for our brand in new geographical markets as we may be unable to find and secure attractive locations, build name recognition or attract enough new customers. Inability to fully implement, or failure to successfully execute, our plans to enter new markets could have an adverse effect on our business, financial condition, and results of operations. In the event we expand our operations outside of the United States, any such expansion may require partnering with and becoming reliant upon a third party, via a partnership, licensing agreement, joint venture, or other contractual relationship.

New restaurants, once opened, may not be profitable, and the increases in Average Unit Volume that we have experienced in the past may not be indicative of future results, and new restaurants may negatively impact sales at our existing restaurants.

If our new restaurants do not perform as planned, our business and future prospects could be harmed. In addition, an inability of our new restaurants to achieve our expected Average Unit Volumes, Cash-on-Cash Returns, Same-Store Sales Change, or Restaurant-Level Profit Margin would have an adverse effect on our business, financial condition, and results of operations. We may find that our

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restaurant concept has limited appeal in new markets, or we may experience a decline in the popularity of our restaurant concept in the markets in which we already operate. Newly opened restaurants in our current markets or our future markets may not be successful, or our Average Unit Volume may not increase at historical rates, which could have an adverse effect on our business, financial condition, and results of operations.

Further, the customer target area of our restaurants varies by location, depending on a number of factors, including population density, other local retail and business attractions, area demographics, and geography. The opening of a new restaurant in or near markets in which we already have restaurants could adversely impact sales at existing restaurants, particularly in markets where we have a highly concentrated number of restaurants, such as New York City, Los Angeles, Boston, and the Washington, D.C./Maryland/Virginia metropolitan area. Existing restaurants could also make it more difficult to build our customer base for a new restaurant in the same market. When we open new restaurants we do not believe that such new restaurants will adversely affect sales at our existing restaurants, but we may selectively open new restaurants in and around areas of existing restaurants that are operating at or near capacity to effectively serve our customers. Sales cannibalization among our restaurants may become significant in the future as we continue to expand our operations and could affect our sales growth, in particular if the delivery radius of an existing restaurant overlaps with that of a new restaurant, which could, in turn, adversely affect our business, financial condition, and results of operations.

Additionally, our restaurants and locations must be able to support growth of not only our In-Store and Pick-Up Channels, but also orders through our Native Delivery, Outpost, and Marketplace Channels. While we attempt to select our locations to maximize all of our channels, we may not be effective in doing so (particularly as a result of the change in customer behavior as a result of the COVID-19 pandemic), which could lead certain restaurants to be under capacity and other restaurants to be at, or over, capacity. We may also prioritize the development of hybrid restaurants that have larger capacity for supporting our Native Delivery, Outpost, and Marketplace Channels or the development of new restaurant formats, such as walk-up, drive-in, or drive-thru formats or store concepts incorporating automation technology. We do not have significant experience in operating such hybrid locations or such new restaurant formats (including any store formats incorporating automation technology), and we may not be able to operate them as efficiently as we operate our restaurants.

Our success depends substantially on the value of our brand and failure to preserve its value or changes in customer recognition of our brand, including due to negative publicity, could have a negative impact on our business, financial condition, and results of operations.

We believe we have built an excellent reputation for the quality of our products, our focus on connecting people with real food, delivery of a consistently positive customer experience, and our social impact programs. To be successful in the future, we believe we must preserve, grow, and leverage the value of our brand across all channels. While we have had a net promoter score (“NPS”) of 78 on average from 2018 through the third fiscal quarter of 2021, in the second and third fiscal quarters of 2021 our NPS has decreased to an average of 72, which we believe is largely attributable to direct and indirect effects of the COVID-19 pandemic. We may not be able to maintain or increase our NPS in the future.

Brand value is based in part on customer perceptions on a variety of subjective qualities. Business incidents, whether isolated or recurring and whether originating from us or our business partners, from any of our third-party spokespersons that represent the brand, or even from unrelated food services businesses, if customers associate those businesses with our own operations, that erode customer trust can significantly reduce brand value, potentially trigger boycotts of our restaurants or result in civil or criminal liability and can have a negative impact on our financial results. Such incidents include actual or perceived breaches of data privacy, claims by current or former employees,

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particularly claims of discrimination or harassment, contaminated or unsafe food, including allergens, product recalls, store employees or other food handlers infected with communicable diseases, including COVID-19, failure to follow proper safety protocols, customer complaints, or other potential incidents discussed in this risk factors section. Additionally, any public statements, including social media posts, from any members of our senior management team or board of directors that are perceived negatively by the media or our customers could have a material and adverse impact on our brand. The impact of such incidents may be exacerbated if they receive considerable publicity, including rapidly through social or digital media (including for malicious reasons), or result in litigation. Customer demand for our products and our reputation could diminish significantly if we, our employees, delivery partners, or other business partners fail to preserve the quality of our products, do not provide orders in a timely fashion, act or are perceived to act in an unethical, illegal, racially biased, unequal, or socially irresponsible manner, including with respect to the sourcing, content, or sale of our products, service and treatment of customers at our restaurants, or the use of customer data for general or direct marketing or other purposes. Additionally, if we fail to comply with laws and regulations, publicly take controversial positions or actions, or fail to deliver a consistently positive customer experience in each of our markets, including by failing to invest in the right balance of wages and benefits to attract and retain employees that represent the brand well, our brand value may be diminished, which could have an adverse effect on our business, financial condition, and results of operations. We have also invested in technology to support our back of house operations and simplify the work of our team members. If our customers react negatively to these operational changes (in particular the use of automation in our restaurants), our brand value may be diminished, which could have an adverse effect on our business, financial condition, and results of operations.

In addition, our future results depend on various factors, including local market acceptance of our restaurants and customer recognition of the quality of our food and operations. Although we have received national and regional recognition for the high quality of our food and operations, we cannot guarantee that we will continue to receive similar recognition in future periods. Failure to receive continued national and regional recognition may impact customer recognition of our brand, which could have an adverse effect on our business, financial condition, and results of operations.

Food safety and foodborne illness concerns could have an adverse effect on our business.

We cannot guarantee that our internal procedures and training will be fully effective in preventing all food safety issues at our restaurants, including any occurrences of foodborne illnesses such as salmonella, Cyclospora, E. coli, and hepatitis A. Moreover, our internal team may fail to report unsafe or unsanitary conditions in accordance with our internal procedures. The ingredients we handle in our restaurants (such as leafy greens and raw chicken) are among the highest risk foods when it comes to food safety and foodborne illness. In addition, we freshly prepare many of our menu items at our restaurants, which may put us at even greater risk for foodborne illness and food contamination outbreaks than some of our competitors who use processed foods or commissaries to prepare their food. The risk of foodborne illness may also increase whenever our menu items are served outside of our control, including orders through our Pick-Up, Native Delivery, Outpost, and Marketplace Channels, particularly if such food is not delivered or consumed within the 30-minute period that we recommend to our customers. In the event of a potential food safety incident, the protocols and procedures that we have in place, and the public statements we make, to respond to such an incident may not be sufficient and any disruption to these protocols, procedures and public statements could also adversely impact the safety of our customers and our reputation.

Additionally, we rely on third-party distributors, making it difficult to monitor food safety compliance and increasing the risk that foodborne illness would affect multiple locations rather than a single restaurant. Some foodborne illness incidents could be caused by third-party distributors, suppliers, or transporters outside of our control (who may provide substitute products, which may not

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be of equal quality and may cause tracing issues), but we may not have appropriate contractual recourse against such third parties, and any insurance maintained by our distributors and/or suppliers may not be sufficient to cover the cost of a potential claim. For example, in February 2019, we received reports that a number of our customers in the New York City area were made sick by blue cheese provided to us by our local cheese supplier, and we had difficulty tracing which restaurants in New York City received the spoiled blue cheese and which restaurants received a substitute product.

New illnesses resistant to our current precautions may develop in the future, or diseases with long incubation periods could arise, both of which could give rise to claims or allegations on a retroactive basis. One or more instances of foodborne illness in any of our restaurants or markets or related to food products we sell could negatively affect our restaurant revenue nationwide if highly publicized on national media outlets or through social media and could also have a negative impact on our brand, which could be incredibly difficult to restore. This risk exists even if it were later determined that the illness was wrongly attributed to us or one of our restaurants. A number of other restaurant chains have experienced incidents related to foodborne illnesses that have had an adverse effect on their brand and operations. In addition, our business may be adversely affected by recalls of products in cases where foodborne illnesses have been detected elsewhere. For example, in November 2019, we undertook voluntary recalls of romaine lettuce following notifications by the Center for Disease Control regarding possible links of E. coli infection to romaine lettuce produced in a certain region in the United States. The occurrence of a similar incident at one or more of our restaurants, or negative publicity or public speculation about an incident, even if such publicity or speculation were to prove unfounded, could have an adverse effect on our business, financial condition, and results of operations.

Further, in August 2019, we received significant negative publicity because, at the time, our molded fiber bowls contained per- and polyfluoroalkyl substances (“PFAS”), which are chemicals associated with certain adverse health effects in humans, even though such substances are approved for use by the U.S. Food and Drug Administration. In addition, products containing PFAS may not be 100% compostable as required pursuant to BPI compostability certification beginning on January 1, 2020. Although we have recently transitioned to alternative bowls that do not contain PFAS, these alternatives could present other health or food safety risks. The inability to continue to source alternative bowls, or any negative publicity or public speculation around such prior incident or similar future incidents, could have an adverse effect on our business, financial condition, and results of operations.

We have incurred significant losses since inception. We expect our operating expenses to increase significantly in the foreseeable future, as we grow our business, increase our new restaurant openings, and invest into new technology, and we may not achieve profitability.

We have incurred significant losses since inception, and we anticipate that our operating expenses and capital expenditures will increase substantially in the foreseeable future, in particular, as we continue to: open new restaurants within existing and new markets; launch new restaurant formats; offer promotions; invest in our multiple product channels, including our Owned Digital Channels, and our Marketplace Channel, and other corporate infrastructure at our sweetgreen Support Center; expand marketing channels and operations; hire additional employees and increase other general and administrative costs; add new products and offerings; and develop, enhance or invest in technologies to help grow our business, including our acquisition of Spyce and any other investments to automate portions of our ingredient preparation and menu item assembly as well as investments to improve our smartphone application. Additionally, our restaurants require costly ongoing maintenance and renovations, and we may need to temporarily close our restaurants while we perform maintenance and renovations, which could further affect our results of operations. As a result, our net losses may increase while we continue our planned expansion. We will need to generate and sustain increased

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revenue levels and decrease proportionate expenses in future periods to achieve profitability in many of our largest markets, and even if we do, we may not be able to maintain or increase profitability. These efforts may prove more expensive than we anticipate, and we may not succeed in increasing our revenue sufficiently to offset expenses. Many of our efforts to generate revenue, particularly our investment in our Native Delivery, Outpost, and Marketplace Channels are new and unproven, and any failure to adequately increase revenue or contain the related costs of these channels could prevent us from attaining or increasing profitability, particularly if these channels are not as successful as we forecast. For example, orders through our Native Delivery, Outpost, and Marketplace Channels are susceptible to delivery delays, or orders being cancelled by couriers, which are largely as a result of our reliance on third-party fulfillment services (for example, Uber Eats has been our exclusive delivery partner for our Native Delivery Channel since launch in 2019, but we are in the process of transitioning to DoorDash as our primary delivery partner for our Native Delivery Channel, which we expect to complete in the fourth quarter of fiscal year 2021) and are outside of our control. Additionally, due to the fact that our Native Delivery, Outpost, and Marketplace Channels require the payment of third-party delivery fees in order to fulfill deliveries, sales through these channels have historically had lower margins than our In-Store and Pick-Up Channels, particularly in California, where delivery providers typically charge additional fees as a result of increased costs stemming from the passing of Proposition 22, which requires certain minimum wages and benefit pools for drivers on such platforms in California, in November 2020. Such fees may increase further in the future if Proposition 22 is overturned and drivers for those platforms are required to be considered employees. If we are unable to operate our Native Delivery, Outpost, and Marketplace Channels effectively and achieve scale, or if these lower margin channels increase as a total percent of company sales relative to higher margin ordering channels, we may not be able to achieve profitability in the near term or at all.

If we are not able to hire, train, reward, and retain a qualified workforce and/or if we are not able to appropriately optimize our workforce or effectively manage our growth in our restaurants, our growth plan and profitability could be adversely affected.

We rely on our restaurant-level employees to consistently provide high-quality food and positive experiences to our customers, which we refer to as the “sweet touch.” In addition, our ability to continue to open new restaurants depends on our ability to recruit, train and retain high-quality restaurant team members to manage, lead and work in our restaurants. Maintaining appropriate staffing in our existing restaurants and hiring and training staff for our new restaurants requires precise workforce planning, which has become more complex due to recent staffing and hiring issues in the restaurant industry throughout the country, as well as laws related to wage and hour violations or predictive scheduling (“fair workweek”) in many of our markets and New York City’s “just cause” termination legislation applicable to our industry, which went into effect in July 2021. Additionally, we have historically had higher turnover rates, including with respect to our restaurant operations leadership, than the accommodation and food services industry as a whole (130.7% for 2020, according to the Bureau of Labor Statistics). For the twelve months ended September 26, 2021, based on the average number of restaurant employees during the period, approximately 119% of our restaurant employees (including 172% of our team members in non-leadership positions and 46% of our Head Coaches) left employment with sweetgreen, and our team member turnover for our non-leadership positions increased significantly in the third fiscal quarter of 2021, consistent with industry trends. We believe our high turnover rate is caused by a number of factors, including that our restaurants tend to be very busy during peak lunch and dinner hours, that our restaurant employees perform a significant amount of prep work in our restaurants, and our multi-channel approach, and we cannot be certain that our turnover rates will not increase above industry averages in the future. If we fail to appropriately plan our workforce and/or fail to reduce our turnover at our restaurants, it could adversely impact guest satisfaction, operational efficiency, and restaurant profitability.

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Moreover, to optimize our organizational structure, including in response to the COVID-19 pandemic and its impact on our business, we have previously implemented reductions in workforce at our sweetgreen Support Center and may in the future implement other reductions in workforce or restructurings. Any reduction in workforce or restructuring may yield unintended consequences and costs, such as attrition beyond the intended reduction in workforce, delay in development of critical technology or business optimization programs due to gaps in knowledge transfer and new employee ramp up time, the distraction of employees, and reduced employee morale, and could adversely affect our reputation as an employer, which could make it more difficult for us to hire new employees in the future and increase the risk that we may not achieve the anticipated benefits from the reduction in workforce. The COVID-19 pandemic has also resulted in aggressive competition for talent, wage inflation, and pressure to improve benefits and workplace conditions to remain competitive, both in our restaurants and in our sweetgreen Support Center, particularly because of the pandemic unemployment benefits provided by the federal stimulus packages. Our failure to recruit and retain new restaurant team members or corporate employees in a timely or efficient manner or experiencing higher employee turnover levels in either our restaurants or sweetgreen Support Center could affect our ability to open new restaurants and grow sales at existing restaurants, and we may experience higher than projected labor costs. In addition, if we fail to adequately monitor and proactively respond to employee dissatisfaction or complaints, it could lead to poor employee satisfaction, higher turnover, litigation, and unionization efforts.

Increases in labor costs, labor shortages, and any difficulties in attracting, motivating, and retaining well-qualified employees could have an adverse effect on our business, financial condition, and results of operations.

Labor is a significant component in the cost of operating our restaurants. If we face labor shortages, particularly due to recent labor shortages in the restaurant industry as a result of the COVID-19 pandemic, increased labor costs because of increased competition for employees, higher employee turnover rates, inefficiency in scheduling our employees, increases in the federal, state, or local minimum wage, or other employee benefits costs (including costs associated with health insurance coverage), our operating expenses could increase and our growth could be negatively impacted. Our success depends in part upon our ability to attract, motivate, and retain a sufficient number of well-qualified restaurant operators and management personnel, as well as a sufficient number of other qualified employees, including customer service and kitchen staff, to align with our expansion plans and multi-channel approach. In the event we cannot sufficiently staff our restaurants, we may from time to time have to temporarily close some of our channels (including potentially certain of our Owned Digital Channels). Because of the busy nature of our restaurants, it is critical that we have a high level of labor productivity and if we do not maintain high engagement or deployment in our restaurants (including in new restaurants and in new markets), it could have an adverse effect on our business. As described above, we have historically had high turnover rates. Our ability to recruit and retain restaurant employees, particularly as a result of recent labor shortages in the restaurant industry, may delay the planned openings of new restaurants or result in higher employee turnover in existing restaurants, which could have an adverse effect on our business, financial condition, and results of operations. Competition for these employees could require us to pay higher wages, which could result in higher labor costs.

Although none of our employees are currently covered under collective bargaining agreements, if a significant number of our employees were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements, it could adversely affect our business, financial condition, and results of operations. In addition, a labor dispute involving some or all of our employees may harm our reputation, disrupt our operations and reduce our revenue, and resolution of disputes may increase our costs. If we are unable to continue to recruit and retain sufficiently qualified individuals, our business and our growth could be adversely affected.

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If we are unable to introduce new or upgraded products, menu items, services, channels, or features that our customers recognize as valuable, we may fail to attract additional customers to use and continue using our mobile and website ordering platforms. Our efforts to develop new and upgraded products, menu items, services, channels, and features on our smartphone and website ordering platforms could require us to incur significant costs.

To continue to attract and retain digital customers, we will need to continue to invest in the development of new products, menu items, services, channels, and features that add value for customers, and that differentiate us from our competitors. For example, in 2021, we launched our native application delivery in our Android smartphone application and completed the acquisition of Spyce to allow us to serve our food with even better quality, consistency, and efficiency in our restaurants via automation; in 2020, we launched our native application delivery in our iOS smartphone application and through website ordering; and in 2018, we launched our Outpost Channel whereby we deliver salads in bulk to commercial or other locations with no delivery fee. We also frequently launch seasonal and exclusive bowls and menu collections throughout the year to attract and retain customers. The success of such new products, menu items, services, channels, and features depend on several factors, including the timely completion, introduction and market acceptance of such products, menu items, services, channels, or features. If our customers do not recognize the value of our new products, menu items, services, channels or features, they may choose not to use our online and mobile ordering platforms, which could have an adverse effect on our business, financial condition, and results of operations.

Developing and delivering these new or upgraded products, menu items, services, channels, or features may increase our expenses, as this process is costly and we may experience difficulties in developing and delivering these new or upgraded products, menu items, services, channels, or features, which may prevent us from achieving or maintaining profitability. Moreover, any such new or upgraded products, menu items, services, channels, or features may not work as intended, provide the intended level of functionality or provide intended value to our customers. In particular, our planned investment in developing automation technology after our acquisition of Spyce could cost more and could take longer to develop than we initially expect. Efforts to enhance and improve the ease of use, responsiveness, functionality and features of our existing websites and applications have inherent risks, and we may not be able to manage these product developments and enhancements successfully. If we are unable to continue to develop new or upgraded products, menu items, services, channels, or features, our customers may choose not to order through our online and mobile platforms in favor of other restaurants or delivery marketplaces, which could have an adverse effect on our business, financial condition, and results operations. Our competitors, including certain large quick service restaurants chains or delivery marketplaces, may have larger or more experienced engineering teams as well as more resources to dedicate to developing or upgrading digital ordering platforms via third-party engineering partners, which may make such competitors’ products or services more attractive to customers.

We may choose to license or otherwise integrate applications, content and data from third parties into our online and mobile ordering platforms. The introduction of these improvements imposes costs on our business, requires the use of our resources, and makes us reliant on third parties who may have different objectives than we do. For example, certain third-party software integrated into our applications may not prioritize features that we otherwise view as critical to improving our overall technology. We may be unable to continue to access these technologies and content on commercially reasonable terms, or at all.

Changes in food and supply costs or failure to receive frequent deliveries of food ingredients and other supplies could have an adverse effect on our business, financial condition, and results of operations.

Our profitability depends in part on our ability to anticipate and react to changes in food and supply costs, and our ability to maintain our menu depends in part on our ability to acquire ingredients

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that meet our specifications from our suppliers. Shortages or interruptions in the availability of certain supplies caused by unanticipated demand, our inability to accurately forecast our supply needs, problems in production or distribution (including any imbalances and freight supply and demand), food contamination, inclement weather, the COVID-19 pandemic, or other conditions could adversely affect the availability and cost of food and supplies or the quality of our ingredients (including requiring distributors to provide substitute products, which may not be of equal quality), which could harm our operations and expose us to risk. We have a localized set of suppliers, and typically rely on a single regional distributor for each of our fresh food products and another single regional distributor for dry goods in each geographical market where we operate, which may make our supply chain inherently more difficult to manage than if we partnered with national distributors, which is the approach of many of our competitors. In addition, we partner with small and medium-sized farmers that have lower inventory levels and experience supply disruptions that place our business at risk. This may further limit our ability to grow and scale, and in some situations serve our customers on a daily basis. Additionally, our farmers may not maintain food safety certifications, which may increase our risk in the event of a food safety incident. We have a developed a process to monitor food safety certifications and standards of our farmers and we do not generally source products from farmers that do not have a comprehensive a food safety plan. We periodically audit our farmers’ compliance with our food safety standards, and in the event of material noncompliance with our standards (which occurred with one of our largest chicken suppliers in 2020), our policy is to pause our relationship with such farmer until they become compliant.

Any increase in the prices, or lack of availability, of the food products most critical to our menu due to natural forces like weather or climate change, due to companies offering more competitive terms to our local farmers, inflation or other reasons could have an adverse effect on our business, financial condition, and results of operations. The markets for some of the ingredients we use, such as avocado, are particularly volatile due to factors such as limited supply sources, crop yield, seasonal shifts, climate conditions, industry demand, including as a result of food safety concerns, product recalls and government regulation. Material increases in the prices of the ingredients most critical to our menu could adversely affect our business, financial condition, and results of operations or cause us to consider changes to our product delivery strategy and adjustments to our menu pricing.

Our ability to maintain consistent price and quality throughout our restaurants depends in part upon our ability to acquire specified food products and supplies in sufficient quantities from our suppliers and distributors at a reasonable cost. Because of the way our supply chain is structured, finding a substitute product that meets our culinary requirements in any one geographical market where we operate, particularly with respect to our fresh food products, may be difficult. We do not control the businesses of our suppliers or distributors, and our efforts to specify and monitor the standards under which they perform may not be successful.

If any of our distributors or suppliers performs inadequately or is unable to grow and scale with our business, or our distribution or supply relationships are disrupted for any reason, there could be an adverse effect on our business, financial condition, and results of operations. Currently, we typically have shorter-term contracts for the purchase or distribution of most of our food products and supplies. As a result, we may not be able to anticipate or react to changing food or supply costs by adjusting our purchasing practices or menu prices, which could cause our results of operations to deteriorate. Generally, our agreements range from one to three years, depending on the outlook for prices of the particular ingredient. In some cases, we have minimum purchase obligations. We have tried to increase, where practical, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, exchange rates, foreign demand, weather, crises, and other world events that may affect our ingredient prices. In the event of a dispute with a distributor or supplier, we may not have adequate contractual recourse, and any insurance maintained by our distributors and/or suppliers may not be sufficient to cover the cost of a potential claim. If we cannot replace or engage distributors or suppliers who meet our specifications in a short period of time, that could increase our expenses and cause shortages of food and other items at our

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restaurants such as packaging or paper products, which could cause a restaurant to remove items from its menu. If that were to happen, affected restaurants could experience significant reductions in sales during the shortage or thereafter, if customers change their dining habits as a result. In addition, we may choose not to, or may be unable to, pass along commodity price increases to customers. These potential changes in food and supply costs could have an adverse effect on our business, financial condition, and results of operations.

Furthermore, certain food items are perishable, and we have limited control over whether these items will be delivered to us in appropriate condition for use in our restaurants. If any of our vendors or other suppliers are unable to fulfill their obligations to our standards, including if we do not accurately forecast our needs (which has been historically challenging when there have been events outside of our control, such as the COVID-19 pandemic), or if we are unable to find replacement providers in the event of a supply or service disruption, we could encounter supply shortages and incur higher costs to secure adequate supplies or, alternatively, receive lower-quality substituted products, which would have an adverse effect on our business, financial condition, and results of operations. Additionally, unanticipated store closures may result in our donation of an excess supply of perishable products, which may also have an adverse effect on our financial condition. As we expand into new markets, because of the local nature of our supply chain, we may be unable to find vendors to meet our supply specifications or service needs as we expand. We could likewise encounter supply shortages and incur higher costs to secure adequate supplies, which would have an adverse effect on our business, financial condition, and results of operations. There can be no assurance that we will be able to identify or negotiate additional or alternative sources on terms that are commercially reasonable to us, if at all. If our suppliers or distributors are unable to fulfill their obligations under their contracts or we are unable to identify alternative sources, we could encounter supply shortages and incur higher costs, each of which could have an adverse impact on our results of operations. Similarly, if we are unable to accurately forecast demand, we may end up with overages of custom and/or perishable products, which may result in food waste and in us paying suppliers or farmers for products that we do not end up using.

Our reliance on third parties could have an adverse effect on our business, financial condition, and results of operations.

We use various third-party vendors to provide, support and maintain most of our management information systems and technology, including key elements of our applications, and we also outsource certain accounting, payroll and human resource functions to business process service providers. We also use third-party vendors for delivery and customer account management. The failure of any of these vendors to fulfill their obligations could disrupt our operations. For example, we have relied on Uber Eats as our exclusive third-party delivery partner to power our Native Delivery Channel since our launch in 2019, and we are in the process of transitioning to DoorDash as our primary delivery partner for our Native Delivery Channel, which we expect to complete in the fourth quarter of fiscal year 2021. If Uber Eats, DoorDash, or any future third-party delivery partner fails to fulfill its obligations or delivers unsatisfactory delivery service, for instance, by delivering orders late, by not having sufficient couriers to fulfill our orders, or by having a system outage, the risks of which may be increased during our transition to DoorDash on our Native Delivery Channel, we will not be able to provide the proper delivery services to our customers through our native application, which is likely to lead to customer dissatisfaction and higher refunds or credits. Additionally, we rely on LevelUp for account management for customers who have signed up on our smartphone application, including processing payments through our smartphone application. If LevelUp or any future third-party payment processing or account management partner, experiences any significant downtime, is unable to provide certain of its services or has a data security incident, it could have an adverse effect on our business, financial condition, and results of operations. Additionally, any changes we may make to the services we obtain from our vendors, or from any new vendors we employ, may disrupt our operations. These disruptions could have an adverse effect on our business, financial condition, and results of operations.

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Additionally, we, our advertisers and our partners are subject to or affected by the technical requirements, terms of service, and policies of the third-party operating system platforms and application stores on which our mobile application depends, including those operated by Apple and Google. The operators of these platforms and application stores have broad discretion to impose technical requirements and change or interpret their policies in a manner unfavorable to us and our partners, such as by imposing fees associated with access to their platforms, restricting how we collect, use, and share data, and limiting our ability to track users. For example, Apple recently announced restrictions that could adversely affect our advertising and marketing strategies, by requiring iOS mobile applications to obtain a user’s opt-in consent to track them for advertising purposes. If we do not comply with the requirements, terms, or policies of the platforms and application stores where we offer our mobile application, we could lose access to users and our business would be harmed.

Failure to manage our growth effectively could harm our business and results of operations.

Our growth plan includes opening a number of new restaurants, investing in a significant amount of technology to make our operations more efficient, and growing headcount at our sweetgreen Support Center to support our growth. Our existing restaurant management systems and other technology, financial and management controls, leadership team and information systems may be inadequate to support our planned expansion and investments, which may negatively impact the quality of service provided to our customers. In connection with the audit of our consolidated financial statements as of and for the years ended December 29, 2019 and December 27, 2020, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting related to a lack of access security, insufficient system change controls and inadequate third-party oversight related to our accounting and financial reporting systems. While we believe we have remediated this material weakness as of June 27, 2021, managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and team members. We may not respond quickly enough to the changing demands that our expansion will impose on our management, restaurant teams and existing infrastructure, which could harm our customer experience, and in turn, our business, financial condition, and results of operations.

We may not persuade customers of the benefits of paying our prices for higher-quality food.

Our success depends in large part on our ability to persuade customers that food made with higher-quality, locally sourced ingredients is worth the prices they will pay at our restaurants relative to prices offered by some of our competitors. We may not successfully educate customers about the quality of our food, and customers may not care even if they do understand our approach. That could require us to change our pricing, advertising or promotional strategies, which could adversely affect our business, financial condition, and results of operations or the brand identity that we have tried to create. We increased our pricing in 2021 and may increase prices further in the future due to the increased costs of labor or ingredients or other factors, which could negatively affect the loyalty of our existing customers and cause them to reduce their spending with us or impact our ability to acquire new customers, particularly as we expand our footprint into new geographies where customers might have greater price sensitivity. If customers are not persuaded that we offer a good value for their money, we may not be able to grow or maintain our customer base, which would have an adverse effect on our business, financial condition, and results of operations.

Changes in commodity and other operating costs, particularly due to climate change, could adversely affect our results of operations.

The profitability of our restaurants depends in part on our ability to anticipate and react to changes in commodity costs, including food, paper, supplies, fuel, utilities and distribution, and other

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operating costs. Additionally, the commodity markets, including markets for key produce items, such as kale and avocado, will likely continue to increase over time if global warming trends continue and may also become volatile due to climate change and climate conditions, all of which are beyond our control and, in many instances, extreme and unpredictable (such as more frequent and/or severe fires and hurricanes). We can only partially address future price risk due to climate change through hedging and other activities, and therefore increases in commodity costs, particularly due to climate change, could have an adverse impact on our ability to achieve or maintain profitability. There can be no assurance that future cost increases can be offset by increased menu prices or that increased menu prices will be fully absorbed by our guests without any resulting change to their visit frequencies or purchasing patterns. In addition, there can be no assurance that we will generate revenue growth in an amount sufficient to offset inflationary or other cost pressures.

The profitability of our restaurants is also adversely affected by increases in the price of utilities, such as natural gas, electric and water, whether as a result of inflation, shortages or interruptions in supply, or otherwise. Our ability to respond to increased costs by increasing prices or by implementing alternative processes or products will depend on our ability to anticipate and react to such increases and other more general economic and demographic conditions, as well as the responses of our competitors and guests. All of these things may be difficult to predict and beyond our control. In this manner, increased costs could adversely affect our results of operations.

We depend on our senior management team and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate and retain highly skilled personnel could have an adverse effect on our business, financial condition, and results of operations.

Our success depends largely upon the continued services of our key executives, including our founders, Jonathan Neman, Nathaniel Ru, and Nicolas Jammet, and, to date, we have not implemented a robust or defined succession plan in the event of any key executive departures. We also rely on our leadership team in setting our strategic direction and culture, operating our business, identifying, recruiting and training key personnel, identifying expansion opportunities, arranging necessary financing and general and administrative functions.

We have had significant changes in our senior management over the last three years, and, from time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The loss of one or more of our executive officers, in particular our founders, or other key employees could seriously harm our ability to successfully implement our business strategy and could impede the achievement of our growth objectives, including with respect to scaling the number of our restaurants and expansion into new markets and restaurant formats and our supply-chain management system, improving our operations and advancing technological developments of our website and mobile application, which would have an adverse effect on our business. The replacement of one or more of our executive officers or other key employees would involve significant time and expense and may significantly delay or prevent the achievement of our business objectives.

To continue to execute our growth strategy, we also must identify, hire, and retain highly skilled personnel. In particular, in connection with increasing our store count as well as our expansion into new revenue channels and new restaurant formats that rely on online ordering platforms and focus on the digital customer, such as our Native Delivery, Outpost, and Marketplace Channels, we must identify, hire and retain highly skilled software engineers, the hiring of which is competitive, and for which we may not be successful. In addition, we undertook two separate reductions in force at our sweetgreen Support Center in March 2020 and October 2020, both of which impacted many departments, including our engineering and digital growth teams, and we may take similar actions in

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the future. Failure to retain or identify, hire, and motivate necessary key personnel could have an adverse effect on our business, financial condition, and results of operations.

Failure to maintain our corporate culture could have an adverse effect on our business, financial condition, and results of operations.

We believe that a critical component of our success has been our corporate culture and the internal advancement of our corporate values. We have invested substantial time and resources in building our team, both at our sweetgreen Support Center and within our restaurants. In the future, we may find it difficult to maintain the innovation, teamwork, passion, and focus on execution that we believe are important aspects of our corporate culture. For example, recent reductions in force at our sweetgreen Support Center and the general impact of the COVID-19 pandemic on our company morale, including our more flexible work-from-home policy as our corporate employees return to our office, have negatively impacted and may continue to negatively impact our corporate culture. We may also choose or be required to implement mask and/or vaccination requirements in connection with our return-to-office plans, which may negatively impact our corporate culture. As we have grown and increased our focus on simplifying our operations at scale and targeting the digital customer, we have also hired leaders from a variety of different backgrounds and experiences and have historically had a significant amount of management turnover. We have also been challenged in maintaining a cohesive and positive corporate culture between our employees in our restaurants and our sweetgreen Support Center. Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives. If we cannot maintain our corporate culture as we grow, it could have an adverse effect on our business, financial condition, and results of operations.

Our marketing strategies and channels will evolve and our programs may or may not be successful.

We incur significant costs and expend other resources in our marketing efforts to attract and retain customers. Our strategy includes public relations, digital and social media, targeted promotions (including free delivery), and in-store messaging, which require less marketing spend as compared to traditional marketing programs. As the number of restaurants increases, as our Native Delivery, Outpost, and Marketplace Channels expand and as we grow into new markets, we expect to increase our investment in advertising and consider additional promotional activities. Accordingly, in the future, we will incur greater marketing expenditures, resulting in greater financial risk and a greater impact on our company. Further, changes in customers’ expectations of privacy and limits to our ability to track users of our mobile application for advertising purposes, such as resulting from Apple’s requirement for iOS mobile applications to obtain a user’s opt-in consent before tracking them for advertising purposes, could decrease the effectiveness of our current marketing strategies and increase our marketing costs, as we may not be able to efficiently use targeted advertisements and may need to increase our marketing expenditures to maintain our current level of customer acquisition. We rely heavily on social media for many of our marketing efforts. If customer sentiment towards social media changes or a new medium of communication becomes more mainstream, we may be required to fundamentally change our current marketing strategies which could require us to incur significantly more costs. Some of our marketing initiatives may not be successful, resulting in expenses incurred without the benefit of higher revenues. Additionally, some of our competitors, including certain large quick service restaurants chains, have greater financial resources, which enable them to spend significantly more on marketing and advertising than we are able to at this time, with a particular focus on digital customers as well as sustainability. These competitors may include delivery marketplaces that our customers utilize instead of our Native Delivery Channel. Many factors, including operating costs, constraints, or changes and our current and future competitors’ pricing and marketing strategies, could significantly affect our pricing strategies. In 2021, we suspended our loyalty program, instead focusing on more targeted

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promotions, and modified our existing pricing, but these actions may not ultimately be successful in attracting and retaining customers. Further, our customers’ price sensitivity may vary by geographic location, and as we expand, our marketing strategies or pricing methodologies may not enable us to compete effectively in these locations. Should our competitors increase spending on marketing and advertising or our marketing funds decrease for any reason, if our marketing strategies or pricing methodologies change, or should our marketing strategies or pricing methodologies be less effective than those of our competitors, it could result in an adverse effect on our business, financial condition, and results of operations.

New information or attitudes regarding diet and health could result in changes in regulations and customer consumption habits, which could have an adverse effect on our business, financial condition, and results of operations.

Regulations and customer eating habits may change as a result of new information or attitudes regarding diet and health. For example, a growing number of people are consuming plant-based meat substitutes, which we currently do not offer on our menu. Such changes may include responses to scientific studies on the health effects of particular food items or federal, state, and local regulations that impact the ingredients and nutritional content of the food and beverages we offer. The success of our restaurant operations is dependent, in part, upon our ability to effectively respond to changes in any customer attitudes or health regulations and our ability to adapt our menu offerings to trends in food consumption, especially fast-moving trends. If customer health regulations or customer eating habits change significantly, we may choose or be required to modify or delete certain menu items, which may adversely affect the attractiveness of our restaurants to new or returning customers. Changes in customer eating habits can occur rapidly, often in response to published research or study information, which puts additional pressure on us to adapt quickly. To the extent we are unwilling or unable to respond with appropriate changes to our menu offerings in an efficient manner, it could adversely affect customer demand and have an adverse impact on our business, financial condition, and results of operations.

Government regulation and customer eating habits may impact our business as a result of changes in attitudes regarding diet and health or new information regarding the adverse health effects of consuming certain menu offerings. These changes have resulted in, and may continue to result in, laws and regulations requiring us to disclose the nutritional content of our food offerings, and they have resulted, and may continue to result in, laws and regulations affecting permissible ingredients and menu offerings. A number of counties, cities and states, including California, have enacted menu labeling laws requiring multi-unit restaurant operators to disclose to customers certain nutritional information, or have enacted legislation restricting the use of certain types of ingredients in restaurants, which laws may be different or inconsistent with requirements under the Patient Protection and Affordable Care Act of 2010 (the “PPACA”), which establishes a uniform, federal requirement for certain restaurants to post nutritional information on their menus. Specifically, the PPACA requires chain restaurants with 20 or more locations operating under the same name and offering substantially the same menus to publish the total number of calories of standard menu items on menus and menu boards, along with a statement that puts this calorie information in the context of a total daily calorie intake. These labeling laws may also change customer consumption habits in a way that adversely impacts our sales. Additionally, an unfavorable report on, or reaction to, our menu ingredients, the size of our portions, or the nutritional content of our menu items could negatively influence the demand for our menu offerings and adversely affect our business, financial condition, and results of operations.

We may not be able to effectively respond to changes in customer health perceptions, comply with further nutrient content disclosure requirements or adapt our menu offerings to trends in eating habits, which could have an adverse effect on our business, financial condition, and results of operations.

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Our focus on environmental sustainability and social initiatives may increase our costs, and our inability to meet our sustainability goals could harm our reputation and adversely impact our financial results.

There has been increasing public focus by investors, environmental activists, the media, and governmental and nongovernmental organizations on a variety of environmental, social, and other sustainability matters. With respect to the restaurant industry, concerns have been expressed regarding energy management, water management, food and packaging waste management, food safety, nutritional content, labor practices, and supply chain and management food sourcing. Through our mission, we have committed to supporting small and mid-size growers who are farming sustainably, to creating transparency around what’s in our food and where it came from, and to creating more accessibility to healthy, real food for more people. In connection therewith, we have announced our commitment to become carbon neutral, which involves reducing our carbon footprint by 50% and meaningfully offsetting where reduction is not yet possible, by 2027. Achieving this commitment could be costly to implement, and we may not be successful. If we are not effective in addressing environmental, social, and other sustainability matters affecting our industry, setting and meeting relevant sustainability goals, or fulfilling our mission or sustainability plans, our brand image may suffer. For example, we have recently transitioned to alternative bowls that do not contain PFAS. We may experience increased costs in order to execute upon our sustainability goals and measure achievement of those goals, which could have an adverse impact on our business and financial condition.

We will require additional capital to support business growth, and this capital might not be available on reasonable terms or at all.

We intend to continue to make significant investments to support our business growth, including with respect to investments in expansion of our restaurant footprint and our multiple distribution channels, the introduction of new store formats and technology to enhance our operating efficiency, each of which might require additional funds to respond to business challenges or opportunities. For example, we may need to open additional restaurants, develop new products and menu items or enhance our products and menu items, and enhance our operating infrastructure. In particular, our planned investment in developing automation technology after our acquisition of Spyce could cost more and could take longer to develop than we initially expect, which could require additional capital. Additionally, if our operating losses continue as a result of a slower-than-anticipated recovery from the COVID-19 pandemic, we may need to raise additional capital sooner than anticipated. Accordingly, we might need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. In addition, we might not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.

We operate our restaurants in leased properties subject to long-term, non-cancelable leases. If we are unable to secure new leases on favorable terms, terminate unfavorable leases, or renew or extend favorable leases, our profitability may suffer.

We operate our restaurants in leased facilities. Payments under our restaurant leases account for a significant portion of our operating expenses, and we expect the new restaurants we open in the future will also be leased. It is becoming increasingly challenging to locate and secure favorable lease facilities for new restaurants as competition for restaurant sites in our target markets is intense. Development and leasing costs are increasing, particularly for urban locations. These factors could

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negatively impact our ability to manage our occupancy costs, which may adversely impact our profitability. In addition, any of these factors may be exacerbated by economic factors, which may result in an increased demand for developers and contractors that could drive up our construction and leasing costs. Also, as we open and operate more restaurants, our rate of expansion relative to the size of our existing restaurant base will decline, making it increasingly difficult to achieve levels of sales and profitability growth that we achieved in prior years.

We are obligated under long-term, non-cancelable leases for almost all of our restaurants and our sweetgreen Support Center. Our restaurant leases generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance charges and other operating costs. Certain of our restaurant leases also provide for contingent rental payments based on sales thresholds. Additional sites that we lease are likely to be subject to similar long-term non-cancelable leases. While we have negotiated certain rent abatements with some of our landlords as a result of the COVID-19 pandemic, if an existing or future restaurant is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease (or negotiate a buyout with the landlord) including, among other things, paying the base rent for the balance of the lease term. In addition, as each of our leases expires, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to pay increased occupancy costs or to close restaurants in desirable locations. These potential increased occupancy costs and closed restaurants could have an adverse effect on our business, financial condition, and results of operations. Furthermore, if we are unable to renew existing leases in key metropolitan areas where we operate or such leases are terminated, any inability to operate in such metropolitan area, as well as the publicity concerning any such termination or non-renewal, could adversely affect our business, financial condition, and results of operations.

A significant portion of our restaurants are located in large urban areas, and if our operations in these geographies are negatively affected, our financial results and future prospects would be adversely affected.

A significant portion of our restaurants are located in densely populated urban locations, such as midtown New York City, Los Angeles, Boston, and the Washington, D.C./Maryland/Virginia metropolitan areas. For fiscal year 2020 and our fiscal year to date through September 26, 2021, approximately 32% and 33%, respectively, of our revenue was generated from our restaurants located in the New York City metropolitan area. As a result, adverse economic or other conditions in any of these areas could have an adverse effect on our overall results of operations. In addition, given our geographic concentrations, negative publicity regarding any of our restaurants in these areas could have an adverse effect on our business and operations, as could other regional occurrences such as local strikes, terrorist attacks, increases in energy prices, inclement weather, or natural or man-made disasters.

As a result of our geographic concentration, our business and financial results are susceptible to economic, social, weather, and regulatory conditions or other circumstances in each of these densely populated urban areas, and any regional occurrences in the markets in which we operate, such as local strikes, terrorist attacks, increases in energy prices, health-related incidents, adverse weather conditions, tornadoes, earthquakes, storms, hurricanes, floods, droughts, fires or other natural or man-made disasters, could have an adverse effect on our business, financial condition, and results of operations. For example, the COVID-19 pandemic significantly impacted our financial results in these urban locations far more negatively than our suburban locations, and the change in behavior as a result of the COVID-19 pandemic could lead to a sustained decline in the desirability of living, working, and congregating in the densely populated urban areas in which we operate. Additionally, during the 2020 presidential election and 2021 inauguration, we had prolonged store closures in the Washington, D.C./Virginia/Maryland metropolitan areas, which had an adverse impact on our restaurant revenues and profitability. Any short-term or long-term shifts in the travel patterns of customers away from densely populated urban areas

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could have an adverse impact on our future results of operations in these areas. An economic downturn, increased competition, or regulatory obstacles in any of these key markets would adversely affect our business, financial condition, and results of operations to a much greater degree than would the occurrence of such events in other areas. In addition, any changes to local laws or regulations within these key metropolitan markets that affect our ability to operate or increase our operating expenses in these markets would have an adverse effect on our business.

In addition, adverse weather conditions, particularly in the winter months in some of our largest markets such as New York City, Boston, the Washington, D.C./Virginia/Maryland metropolitan region and Chicago, or unexpected adverse weather conditions in markets such as Texas or Florida, may also impact customer traffic at our restaurants, and, in more severe cases, cause temporary restaurant closures, sometimes for prolonged periods, which could have an adverse impact on our revenues. Many of our restaurants have outdoor seating, and the effects of adverse weather may impact the use of these areas and may negatively impact our revenue. As a result of adverse weather conditions, temporary or prolonged restaurant closures may occur and customer traffic may decline due to the actual or perceived effects of future weather-related events.

Acquisitions could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our results of operations and expansion prospects.

We have in the past and may in the future make acquisitions of other companies, technologies, or products. Competition within our industry for acquisitions of businesses, technologies in areas such as automation and logistics (such as our recent acquisition of Spyce), and assets (including retail spaces) may become intense, and we have limited experience in acquisitions. As such, even if we are able to identify a target for acquisition, we may not be able to complete the acquisition on commercially reasonable terms, or such target may be acquired by another company including, potentially, one of our competitors. Negotiations for such potential acquisitions may result in diversion of management time and significant out-of-pocket costs. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by customers, employees, or investors or result in the incurrence of significant other liabilities. We may expend significant cash or incur substantial debt to finance such acquisitions, which indebtedness may restrict our business or require the use of available cash to make interest and principal payments. In addition, we may finance or otherwise complete acquisitions by issuing equity or convertible debt securities, which may result in further dilution of our existing stockholders. For example, we spent significant time and resources and issued a significant amount of equity securities to acquire Spyce, and expect to spend significant additional resources (including proceeds from this offering) on developing Spyce’s automation technology and integrating the Spyce technology into our restaurants, and doing so may take more time or use more resources, than we expect, and we may not be successful at all in realizing our goals in the transaction. Additionally, the time and resources we spend toward developing Spyce’s automation technology and integrating the Spyce technology into our restaurants may be a significant distraction in successfully growing the rest of our business. If we fail to evaluate and execute acquisitions successfully or fail to successfully address any of these risks, our results of operations and expansion prospects may be harmed.

We are a party to a secured credit agreement, which contains certain affirmative and negative covenants that may restrict our current and future operations and could adversely affect our ability to execute business needs.

Our credit agreement with EagleBank (as amended, the “2020 Credit Agreement”) contains certain affirmative and negative covenants applicable to us and our subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, dividends and

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other distributions, and transactions with affiliates. The obligations under the 2020 Credit Agreement are guaranteed by our existing and future material subsidiaries and secured by substantially all of our and our subsidiary guarantor’s assets, other than certain excluded assets. The terms of our 2020 Credit Agreement may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs in the means or manner desired. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy, invest in our growth strategy and compete against companies who are not subject to such restrictions. The 2020 Credit Agreement also contains a financial covenant that requires us to maintain minimum liquidity, including cash and cash equivalents plus available amount under the revolving credit facility of the 2020 Credit Agreement, in an amount of not less than the trailing 90 day cash burn during a calendar quarter. We may not be able to generate sufficient cash flow or sales to meet the financial covenant or pay any principal or interest under the 2020 Credit Agreement.

If we are unable to comply with our payment requirements or any other covenants, it could result in an event of default under the 2020 Credit Agreement and our lender may accelerate our obligations under our 2020 Credit Agreement and foreclose upon the collateral, or we may be forced to sell assets, restructure our indebtedness, or seek additional equity capital, which would dilute our stockholders’ interests. In addition, such a default or acceleration may result in the acceleration of any future indebtedness to which a cross-acceleration or cross-default provision applies. If this occurs, we might not be able to repay our debt or borrow sufficient funds to refinance it. Even if new financing is available, it may not be on terms that are acceptable to us.

Further, interest on any outstanding balances under the 2020 Credit Agreement is calculated based on the London Interbank Offered Rate (“LIBOR”). On July 27, 2017, the U.K. Financial Conduct Authority (FCA), which regulates LIBOR, announced that it will no longer require banks to submit rates for the calculation of LIBOR after 2021. Further, on March 5, 2021, the Intercontinental Exchange Benchmark Administration, the FCA-regulated and authorized administrator of LIBOR, announced, and the FCA confirmed, that one week and two-month USD LIBOR settings will cease on December 31, 2021, and that the USD LIBOR panel for all other tenors will cease on June 30, 2023. The 2020 Credit Agreement provides for the discontinuation of U.S. dollar LIBOR by including provisions broadly consistent with the “hardwired” approach recommended by the Alternative Rates Reference Committee convened by the Federal Reserve Board. The “hardwired” approach provides for (i) a transition to a benchmark based on the secured overnight funds rate or another benchmark determined after giving regard to any recommendation by the Federal Reserve Board and any evolving or then-prevailing market convention for syndicated credit facilities and (ii) certain spread adjustments and other changes necessary to implement such replacement benchmark. The transition to a replacement benchmark is triggered by the earliest to occur of several events, including the cessation of publication of U.S. dollar LIBOR and the public announcement by the regulatory supervisor of the administrator of U.S. dollar LIBOR that U.S. dollar LIBOR is no longer representative. Currently, it is not possible to determine with certainty the future utilization of U.S. dollar LIBOR or of any particular replacement benchmark. As such, the potential effect of any such event on our business, financial condition, cash flows and results of operations cannot yet be determined. However, any such event could have an adverse effect on our business, financial condition, cash flows and results from operations and could cause the market value of our Class A common stock to decline.

Risks Related to Legal and Governmental Regulation

Governmental regulation may adversely affect our business, financial condition, and results of operations.

We are subject to various federal, state, and local regulations, including those relating to building and zoning requirements and those relating to the preparation and sale of food and, in certain

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locations, those relating to the sale of alcoholic beverages, including “dram shop” statutes. The development and operation of restaurants depends to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning, land use, environmental, traffic, and other regulations and requirements. Our restaurants are also subject to state and local licensing and regulation by health, sanitation, food and occupational safety, and other agencies, which regulation has increased in the wake of the COVID-19 pandemic. We may experience difficulties or failures in obtaining the necessary licenses, approvals, or permits for our restaurants, which could delay planned restaurant openings (and has become significantly more difficult during the COVID-19 pandemic) or affect the operations at our existing restaurants. In addition, stringent and varied requirements of local regulators with respect to zoning, land use, and environmental factors could delay or prevent development of new restaurants in particular locations.

Our operations are subject to the U.S. Occupational Safety and Health Act, which governs worker health and safety, as well as rules and regulations regarding COVID-19, the U.S. Fair Labor Standards Act, which governs such matters as minimum wages and overtime, and a variety of similar federal, state and local labor and employment laws (such as fair work week laws, various wage & hour laws, termination and discharge laws, and state occupational safety regulations) that govern these and other employment law matters. We may also be subject to lawsuits or investigations from our current or former employees in our restaurants or in the sweetgreen Support Center, the U.S. Equal Employment Opportunity Commission, or others alleging violations of federal and state laws regarding workplace and employment matters, discrimination, exempt or non-exempt misclassification, and similar matters, and we have been a party to a number of such matters in the past. These lawsuits and investigations require significant resources from our senior management and can result in fines, penalties and/or settlements, some or all of which may not be covered by insurance. These lawsuits and investigations can also result in significant remediation efforts that may be costly and time consuming, and which we may not implement effectively. We have made payments to settle these types of lawsuits and/or investigations in the past, and additional lawsuits or investigations could have an adverse effect on our business, brand and reputation, financial condition, and results of operations. Additional federal, state, and local proposals related to paid sick leave or similar matters, particularly as a result of the COVID-19 pandemic, could, if implemented, also have an adverse effect on our business, financial condition, and results of operations.

We are also subject to the Americans with Disabilities Act (the “ADA”) and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas, including our restaurants, website, and smartphone applications. In the past, we have settled various lawsuits related to our alleged ADA non-compliance, which resulted in accommodations to our website, smartphone applications, and physical restaurant locations. We may face additional litigation in the future or have to further modify our digital platforms by providing auxiliary aids to disabled persons, or restaurants by adding access ramps or redesigning certain interior layouts or architectural fixtures to provide service to or make reasonable accommodations for disabled persons. The expenses associated with these modifications could be material, and there is no guarantee that we will be able to adjust our business practices appropriately to limit additional claims in the future.

We operate in a highly regulated industry, and we strive to implement industry best practices to ensure food and customer safety whether or not required by government regulation, including with respect to hand washing and sanitation of our restaurants as well as the prepping, handling, and maintaining of many of our perishable food items. In the event we fail to maintain such best practices, or do not comply with any required government regulation, it could lead to incidents related to foodborne illnesses that could have an adverse effect on their brand and operations. Local, state, and federal regulatory requirements are always evolving, and we anticipate compliance with these requirements may increase our costs and present challenges and risk to our company.

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The impact of current laws and regulations, including vaccination mandates for restaurants operating indoor dining, the effect of future changes in laws or regulations that impose additional requirements, and the consequences of litigation relating to current or future laws and regulations, or our inability to respond effectively to significant regulatory or public policy issues, could increase our compliance and other costs of doing business and, therefore, have an adverse effect on our business, financial condition, and results of operations. Failure to comply with the laws and regulatory requirements of federal, state, and local authorities could result in, among other things, revocation of required licenses, administrative enforcement actions, fines, and civil and criminal liability. In addition, certain laws, including the ADA, could require us to expend significant funds to make modifications to our restaurants if we failed to comply with applicable standards. Compliance with the aforementioned laws and regulations can be costly and can increase our exposure to litigation or governmental investigations or proceedings, which could have an adverse effect on our business, financial condition, and results of operations.

Changes in employment laws may increase our labor costs and impact our results of operations.

Various federal, state, and labor laws govern the relationship with our employees and impact operating costs. These laws include employee classification as exempt or non-exempt for overtime and other purposes, minimum wage requirements, fair workweek, wage and hour requirements, unemployment tax rates, workers’ compensation rates, immigration status, and other wage and benefit requirements. Additionally, certain markets, such as Los Angeles and San Francisco have provided for additional benefit and paid sick leave requirements as a result of the COVID-19 pandemic. Significant additional government-imposed increases in the following areas could have an adverse effect on our business, financial condition, and results of operations:

• predictive scheduling;

• minimum wages;

• mandatory health benefits;

• vacation accruals;

• termination and discharge requirements;

• paid leaves of absence, including paid sick leave and COVID-19-related leave; and

• tax reporting.

Complying with these laws and regulations subjects us to substantial expense and non-compliance could expose us to significant liabilities. We incur legal costs to defend, and we could suffer losses from, these and similar cases, and the amount of such losses or costs could be significant. In addition, several states and localities in which we operate and the federal government have, from time to time, enacted minimum wage increases, changes to eligibility for overtime pay, paid sick leave and mandatory vacation accruals, and similar requirements. These changes have increased our labor costs and may have a further negative impact on our labor costs in the future.

For example, several jurisdictions in which we operate, including New York City, Philadelphia, Chicago, and San Francisco, have implemented fair workweek legislation, which impose complex requirements related to scheduling for certain restaurant and retail employees that are often difficult to comply with. We are currently under investigation by the New York City Department of Consumer Affairs for potential fair workweek violations for one of our New York City locations, and the outcome of such investigation is unknown at this time. Other jurisdictions where we operate are considering enacting similar legislation. In addition, New York City recently passed a “just cause” termination legislation as part

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of its fair workweek legislation, which restricts companies’ ability to terminate employees unless they can prove “just cause” or a “bona fide economic reason” for the termination, which went into effect in July 2021. All of these regulations impose additional obligations on us and could increase our costs of doing business and cause us to make changes to our business model. Our failure to comply with any of these laws and regulations could lead to higher employee turnover and negative publicity, and subject us to penalties and other legal liabilities, which could adversely affect our business and results of operations and potentially cause us to close some restaurants in these jurisdictions.

In addition, a significant number of our restaurant employees are paid at rates impacted by the applicable minimum wage. To the extent implemented, federal, state and local proposals that increase minimum wage requirements or mandate other employee matters could, to the extent implemented, increase our labor and other costs. Several states in which we operate have approved minimum wage increases that are above the federal minimum. As more jurisdictions, or if the federal government (including as a result of the Biden administration’s commitment to a $15 federal minimum wage), implement minimum wage increases, we expect our labor costs will continue to increase. Our ability to respond to minimum wage increases by increasing menu prices depends on willingness of our guests to pay the higher prices and our perceived value relative to competitors. Our distributors and suppliers could also be affected by higher minimum wage, benefit standards, and compliance costs, which could result in higher costs for goods and services supplied to us. Any increase in the labor costs of our business may have an adverse effect on our results of operations.

We have been and will likely continue to be party to litigation that could distract management, increase our expenses, or subject us to monetary damages or other remedies.

We have been subject to a number of claims from our employees alleging violations of federal and state law regarding workplace and employment matters, including off-the-clock work (including meal and rest break compliance), predictive scheduling, equal opportunity, harassment, discrimination, retaliation, wrong termination, and similar matters, and we could become subject to class action or other lawsuits related to these or different matters in the future. We may not have valid arbitration agreements with all current or former employees, and the arbitration agreements that are in place may not protect us from certain claims in certain states (including Private Attorney General Act claims in California). In addition, customers may file complaints or lawsuits against us alleging we caused an illness or injury they suffered at or after a visit to our restaurants, including in the context of claims related to exposure to COVID-19, or that we have problems with food quality or operations. In recent years, a number of restaurant companies, including sweetgreen, have been subject to such claims. Additionally, because we do not perform background checks on all employees, we have been and may in the future be exposed to certain risks, including allegations of negligence in our hiring practices, as well as needing to terminate existing employees who do not pass any background check that we may conduct after an employee has been hired. Regardless of whether any claims against us are valid, or whether we are ultimately held liable, claims may be expensive to defend, may divert time and money away from our operations, and hurt our performance. A judgment in excess of, or that is excluded from, our insurance coverage for any claims could adversely affect our financial condition and results of operations. Any adverse publicity resulting from these allegations, regardless of whether any claims against us are valid, may also adversely affect our reputation, which in turn could have an adverse effect on our business, financial condition, and results of operations.

In addition, the restaurant industry has been subject to a growing number of claims based on the nutritional content of food products sold and disclosure and advertising practices. We may also be subject to this type of proceeding in the future and, even if we are not, publicity about these matters (particularly directed at the fast-casual segment of the industry) may harm our reputation and could have an adverse effect on our business, financial condition, and results of operations.

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Failure to obtain and maintain required licenses and permits or to comply with food control regulations could lead to the loss of our food service licenses and, thereby, harm our business.

The restaurant industry is subject to various federal, state, and local government regulations, including those relating to design and construction of restaurants and the sale of food and alcoholic beverages. Such regulations are subject to change from time to time. During the COVID-19 pandemic, the timeline for obtaining licenses and permits has increased significantly. The failure to obtain and properly maintain and comply with these licenses, permits and approvals in a timely manner could have an adverse effect on our business, financial condition, and results of operations. Typically, licenses must be renewed annually and may be revoked, suspended, or denied renewal for cause or we could be subject to fines or temporary restaurant closures at any time if governmental authorities determine that our conduct violates applicable regulations. Difficulties or failure to maintain or obtain the required licenses and approvals could adversely affect our existing restaurants and delay or result in our decision to cancel the opening of new restaurants. Any failure to maintain such licenses could have an adverse effect on our business, brand and reputation, financial condition and results of operations.

Failure to comply with immigration laws, or changes thereto, may increase the operating costs of our business.

Although we require all workers to provide us with government-specified documentation evidencing their employment eligibility on their first day of work, some of our employees, particularly in our restaurants, may, without our knowledge, be unauthorized workers, or provide false documentation. Additionally, our historical hiring processes in our restaurants have not always ensured that we collect and approve all required government-specified documentation evidencing employment eligibility on a timely basis in accordance with applicable laws. We have previously been subject to, and are also currently under, audit by the Department of Homeland Security in certain markets, and we may be subject to additional audits in the future. Unauthorized workers are subject to deportation and may subject us to fines or penalties, and if any of our workers are found to be unauthorized, we could experience adverse publicity that negatively impacts our brand and may make it more difficult to hire and keep qualified employees. In the past we have terminated a significant number of employees who were determined to be unauthorized workers, and if we take similar actions in the future, it may disrupt our operations, cause temporary increases in our labor costs as we train new employees, and result in additional adverse publicity. We could also become subject to fines, penalties, and other costs related to claims or governmental audits that we did not fully comply with all obligations of federal and state immigration compliance laws, including record-keeping obligations. These factors could have an adverse effect on our business, financial condition, and results of operations as well as our brand and reputation.

Furthermore, in recent years immigration laws have been a topic of considerable political focus. Further changes in immigration or work authorization laws and additional enforcement programs by the Department of Homeland Security of existing immigration or work authorization laws, including at the state level, could increase our compliance and oversight obligations, which could subject us to additional costs and potential liability, impact our brand and reputation, and make our hiring process more burdensome, and could potentially reduce the availability of prospective employees.

Failure to comply with environmental laws, particularly regarding waste management, may negatively affect our business.

We are subject to various federal, state, and local laws and regulations concerning waste minimization, recyclables, disposal, pollution, protection of the environment, and the presence, discharge, storage, handling, release and disposal of, and exposure to, hazardous or toxic substances.

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These environmental laws, which typically vary significantly at the local level, provide for significant fines and penalties for noncompliance and liabilities for remediation, sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of hazardous or toxic substances. Compliance with these regulations become increasingly more complicated as we expand into additional markets. We primarily partner with a third-party vendor to manage the disposal of our waste and are reliant on them to ensure that our waste is transferred, recycled, or disposed of in accordance with our standards and applicable regulations. Third parties may also make claims against owners or operators of properties for personal injuries and property damage associated with releases of, or actual or alleged exposure to, such hazardous or toxic substances at, on or from our restaurants. Particularly in light of our focus on environmental sustainability and social impact, environmental conditions relating to releases of hazardous substances at a prior, existing, or future restaurant could have an adverse effect on our brand and reputation, business, financial condition, and results of operations. Further, environmental laws, and the administration, interpretation, and enforcement thereof, are subject to change and may become more stringent in the future, each of which could make our waste management more complex and have an adverse effect on our business, financial condition, and results of operations.

The effect of changes to healthcare laws in the United States may increase the number of employees who choose to participate in our healthcare plans, which may significantly increase our healthcare costs and negatively impact our financial results.

In 2010, the PPACA, which required health care coverage for many uninsured individuals and expanded coverage the coverage of those already insured, was signed into law in the United States. The PPACA requires us to offer healthcare benefits to all full-time employees (including full-time hourly employees) that meet certain minimum requirements of coverage and affordability, or face penalties. We have incurred additional expenses due to organizing and maintaining a healthcare plan that covers the increased number of employees who have elected to obtain coverage through a healthcare plan we subsidize in part. If we fail to continue to offer such benefits, or the benefits we elect to offer do not meet the applicable requirements, we may incur penalties. It is also possible that by making changes or failing to make changes in the healthcare plans offered by us we will become less competitive in the market for our labor. The future costs and other effects of these new healthcare requirements cannot be determined with certainty, but they may significantly increase our healthcare coverage costs and could have an adverse effect on our business, financial condition, and results of operations.

Additionally, the modifications made under the Tax Cuts and Jobs Act enacted in 2017 had no impact on the employer mandate. However, we cannot predict the ultimate content, timing, or impact of any changes to the PPACA or other federal and state reform efforts. There is no assurance that federal or state health care reform will not adversely affect our business, financial condition, and results of operations, and we cannot predict how future federal or state legislative, judicial, or administrative changes relating to healthcare reform will affect our business.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 27, 2020, we had U.S. Federal net operating loss carryforwards (“NOLs”) of $356,546, of which $256,556 may be carried forward indefinitely, and the remaining carryforwards of $99,990 expire at various dates from 2029 through 2037. As of December 27, 2020, we had state net operating loss carryforwards of $344,125, of which $38,019 may be carried forward indefinitely, and the remaining carryforwards of $306,106 expire at various dates from 2021 through 2040. It is possible that we will not generate taxable income in time to use NOLs before their expiration, or at all. Under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs

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and other tax attributes, including R&D tax credits, to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by “five percent stockholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Our ability to use NOLs and other tax attributes to reduce future taxable income and liabilities may be subject to annual limitations as a result of prior ownership changes and ownership changes that may occur in the future, including as a result of this offering.

Under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), as amended by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), net operating losses arising in taxable years beginning after December 31, 2017 and before January 1, 2021 may be carried back to each of the five taxable years preceding the tax year of such loss, but net operating losses arising in taxable years beginning after December 31, 2020 may not be carried back. Additionally, under the Tax Act, as modified by the CARES Act, net operating losses from tax years that began after December 31, 2017 may offset no more than 80% of current taxable income annually for taxable years beginning after December 31, 2020, but the 80% limitation on the use of net operating losses from tax years that began after December 31, 2017 does not apply for taxable income in tax years beginning before January 1, 2021. NOLs arising in tax years beginning after December 31, 2017 can be carried forward indefinitely, but NOLs generated in tax years beginning before January 1, 2018 will continue to have a two-year carryback and twenty-year carryforward period. As we maintain a full valuation allowance against our U.S. NOLs, these changes will not impact our balance sheet as of December 27, 2020. However, in future years, if and when a net deferred tax asset is recognized related to our NOLs, the changes in the carryforward and carryback periods as well as the new limitation on use of NOLs may significantly impact our valuation allowance assessments for NOLs generated in taxable years beginning after December 31, 2017.

There is also a risk that due to regulatory changes, such as suspensions of the use of NOLs and tax credits by certain jurisdictions, including in order to raise additional revenue to help counter the fiscal impact from the COVID-19 pandemic, possibly with retroactive effect, or other unforeseen reasons, our existing NOLs and tax credits could expire or otherwise be unavailable to offset future income tax liabilities. A temporary suspension of the use of certain NOLs and tax credits has been enacted in California, and other states may enact suspensions as well. For these reasons, we may not be able to realize a tax benefit from the use of our NOLs and tax credits.

We may expand our independent contractor driver network with respect to our expanding delivery program. The status of the drivers as independent contractors, rather than employees, may be challenged. A reclassification of the drivers as employees could harm our business or results of operations.

In 2019, our subsidiary, SG Logistics, LLC (“SG Logistics”), commenced engaging drivers to deliver products for certain of our Outpost orders through our technology platform. These drivers may also fulfill certain delivery orders made through our native smartphone application or our website in the future. SG Logistics may become involved in legal proceedings and investigations that claim that members of its delivery network who it treats as independent contractors for all purposes, including employment tax and employee benefits, should instead be treated as employees. In addition, there can be no assurance that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing law and regulations, such as California’s AB5 legislation, that would mandate that SG Logistics’ change its classification of the drivers. In the event of a reclassification of members of SG Logistics’ independent contractor driver network as employees, SG Logistics could be exposed to various liabilities and additional costs. These liabilities and costs could have an adverse effect on our business, financial condition, and results of operations for our Outpost business and/or make it cost prohibitive for SG Logistics to deliver orders using its driver network, particularly in geographic areas where we do not have significant volume. These liabilities and

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additional costs could include exposure (for prior and future periods) under federal, state, and local tax laws, and workers’ compensation, unemployment benefits, labor, and employment laws, as well as potential liability for penalties and interest. Additionally, in the event a courier that contracts with SG Logistics commits a serious crime in connection with providing services on the SG Logistics platform, we could potentially be responsible for any losses as a result of such incident, and such incident could have a material adverse impact on our brand.

Risks Related to Our Intellectual Property and Information Technology

If we experience a serious cybersecurity incident, or the confidentiality, integrity, or availability of our information technology, software, services, communications, or data is compromised, our platform may be perceived as not being secure, our reputation may be harmed, demand for our products and services may be reduced, and we may incur significant liabilities.

Operating our business and platform involves the collection, use, storage, and transmission of sensitive, proprietary, and confidential information, including personal information of customers, personnel, business contacts, and others, and our sensitive, proprietary and confidential business information. For example, we collect certain customers’ home and/or business addresses for processing delivery orders, mobile phone numbers from users of our platform, and personal information from our personnel, including in the administration of our benefit plans. Cybersecurity incidents compromising the confidentiality, integrity, and availability of this information or our systems could result from cyber attacks, software bugs and vulnerabilities, viruses, supply chain attacks and vulnerabilities through our third-party partners, credential stuffing, efforts by individuals or groups of hackers and sophisticated organizations, including state-sponsored organizations, errors or malfeasance of our personnel, and security vulnerabilities in the software or systems on which we rely. Such incidents have occurred in the past, and may occur in the future, resulting in unauthorized, unlawful, or inappropriate access to, inability to access, disclosure of, or loss of the sensitive, proprietary and confidential information that we handle. In addition, we have experienced an increase in credential stuffing activity in which malicious third parties try to access an online service by using credentials compromised in cybersecurity incidents suffered by different services. We have security measures in place to mitigate our risk to these vulnerabilities, but these measures may not be adequate to ensure that our operations are not disrupted or that security incidents do not occur. Risks relating to security incidents are likely to increase as we continue to grow and collect, process, store, and transmit increasingly large amounts of data.

We also rely on a number of third parties to support and operate our critical business systems and process confidential and personal information, such as LevelUp, our account management provider, and the payment processors that process customer credit card payments. These third parties may not have adequate security measures and could experience a security incident that compromises the confidentiality, integrity, or availability of the systems they operate for us or the information they process on our behalf. Moreover, the risk of circumvention of our security measures or those of our third parties on whom we rely has been heightened by advances in computer and software capabilities and the increasing sophistication of actors who employ complex techniques, including, without limitation, “phishing” or social engineering incidents, ransomware, extortion, account takeover attacks, denial or degradation of service attacks, and malware. Cybercrime and hacking techniques are constantly evolving, and we or third parties who we work with may be unable to anticipate attempted cybersecurity incidents, react in a timely manner, or implement adequate preventative measures, particularly given increasing use of hacking techniques designed to circumvent controls, avoid detection, and remove or obfuscate forensic artifacts.

Because of the prominence of our brand, we believe that we are an attractive target for cyberattacks. We have taken measures designed to detect and prevent security incidents, and to

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protect the confidentiality, integrity, and availability of our systems and the sensitive, proprietary, and confidential information under our control. However, despite any measures that we have taken by us to increase our cybersecurity, we cannot assure you that the measures that we or the third parties we work with have implemented will always be followed and/or be effective against current or future security threats. Moreover, we and the third parties we work with may be more vulnerable to security incidents in remote work environments, which have increased in response to the COVID-19 pandemic.

If we or the third parties we work with suffer, or are perceived to have suffered, a security incident, we may experience a loss of customer and partner confidence in the security of our platform and damage to our brand, reduced demand for our offerings, and disruption of normal business operations. Such an incident may also require us to spend resources to investigate and correct the issue and to prevent recurrence, expose us to legal liabilities, including litigation, regulatory enforcement, and indemnity obligations, which could have an adverse effect on our business, financial condition or results of operations. Additionally, our agreements with our material third-party partners, such as LevelUp, Uber Eats and DoorDash, require us to maintain adequate security measures and not subject their confidential information to a cybersecurity incident. If we were to breach those contractual obligations, we could be responsible for any indemnifying our partners for any losses associated with such incident.

Laws in all states and U.S. territories require businesses to notify affected individuals, governmental entities, and/or credit reporting agencies of certain security incidents affecting personal information. Such laws are inconsistent, and compliance in the event of a widespread security incident is complex and costly and may be difficult to implement. Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed. We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim. Security incidents also could harm our reputation and result in litigation against us. Any of these results could have an adverse effect on our business, our financial condition, or results of operations.

We are subject to rapidly changing and increasingly stringent laws, regulations, industry standards, and other obligations relating to privacy, data protection, and data security. The restrictions and costs imposed by these requirements, or our actual or perceived failure to comply with them, could harm our business.

We collect, use, and disclose personal information of customers, personnel, business contacts, and others in the course of operating our business. These activities are or may become regulated by a variety of domestic and foreign laws and regulations relating to privacy, data protection, and data security, which are complex, rapidly evolving, and increasingly stringent.

State legislatures have begun to adopt comprehensive privacy laws. For example, the California Consumer Privacy Act of 2018 (the “CCPA”), which took effect on January 1, 2020, gives California residents expanded rights related to their personal information, including the right to access and delete their personal information, and receive detailed information about how their personal information is used and shared. The CCPA also created restrictions on “sales” of personal information that allow California residents to opt-out of certain sharing of their personal information and may restrict the use of cookies and similar technologies for advertising purposes. Our platform relies on such technologies for advertising purposes and could be adversely affected by the CCPA’s restrictions if users opt-out of certain information sharing on which our advertising relies, which would impair our ability to advertise. This could decrease the effectiveness of our marketing and adverting strategies and decrease our level of customer acquisition and/or retention, may cause us to find new avenues to market and advertise,

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and may cause us to increase our marketing and advertising expenditures. The CCPA prohibits discrimination against individuals who exercise their privacy rights, provides for civil penalties for violations, and creates a private right of action for certain data breaches that is expected to increase data breach litigation. Many of the CCPA’s requirements as applied to personal information of a business’s personnel and related individuals are subject to a moratorium set to expire on January 1, 2023. The expiration of the moratorium may increase our compliance costs and our exposure to public and regulatory scrutiny, costly litigation, fines and penalties.

Additionally, California voters recently approved a ballot measure adopting the California Privacy Rights Act (“CPRA”), which will substantially expand the requirements of the CCPA effective January 1, 2023. The CPRA will restrict use of certain categories of sensitive personal information that we handle, further restrict the use of cross-context behavioral advertising techniques on which our platform relies, establish restrictions on the retention of personal information, expand the types of data breaches subject to the private right of action, and establish the California Privacy Protection Agency to implement and enforce the new law and impose administrative fines. Further, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act, and on July 7, 2021, Colorado enacted the Colorado Privacy Act, both of which laws are comprehensive privacy statutes that share similarities with the CCPA, CPRA, and legislation proposed in other states. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.

In addition to the risks we face under emerging privacy laws, the restrictions on text message communications imposed by the Telephone Consumer Protection Act (“TCPA”), have long been a source of potential liability for our business. Claims that we have violated the TCPA could be costly to litigate and could expose us to substantial statutory damages or settlement costs.

Foreign laws and regulations pertaining to privacy, data protection and data security – including in Europe, Brazil, and Japan – are also undergoing rapid change, have become increasingly stringent in recent years, and proposals for similar laws and regulations are being considered in several major foreign countries. Many of these countries are also beginning to impose or increase restrictions on the transfer of personal information to other countries. Restrictions relating to privacy, data protection, and data security in these countries may limit the products and services we can offer in them, which in turn may limit demand for our services in such countries and our ability to enter into and operate in new geographic markets.

Privacy advocates and industry groups have regularly proposed, and may propose in the future, self-regulatory standards by which we are or may become legally or contractually bound. If we fail to comply with these contractual obligations or standards, we may face public and regulatory scrutiny, substantial liability, and fines.

We also publish privacy policies and other documentation regarding our collection, processing, use, and disclosure of personal information and/or other confidential information. Although we endeavor to comply with our published policies, and documentation, we may at times fail to do so or may be perceived to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or partners fail to comply with our published policies and documentation, which are outside of our control. Such failures can subject us to potential enforcement action the policies or documentation and perceived as deceptive, unfair, or misrepresentative of our actual practices such that they consumer protection laws and require us to publicly disclose any alleged non-compliance.

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Consumer resistance to the collection and sharing of the data used to deliver targeted advertising, increased visibility of consent or “do not track” mechanisms as a result of industry regulatory or legal developments, the adoption by consumers of browser settings or “ad-blocking” software, and the development and deployment of new technologies could impact our ability to collect data or engage in marketing and advertising, which could have an adverse effect on our business, financial condition, or results of operations.

Further, we are subject to the Payment Card Industry (“PCI”) Data Security Standard, a security standard applicable to companies that collect, store or transmit certain data regarding credit and debit cards, holders and transactions. We rely on vendors to handle PCI matters and to ensure PCI compliance. Despite our compliance efforts, we may become subject to claims that we have violated the PCI Data Security Standard based on past, present, and future business practices. Our actual or perceived failure to comply with the PCI Data Security Standard can subject us to fines, termination of banking relationships, and increased transaction fees. In addition, there is no guarantee that PCI Data Security Standard compliance will prevent illegal or improper use of our payment systems or the theft, loss or misuse of payment card data or transaction information.

In addition, the FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Our failure to take any steps perceived by the FTC as appropriate to protect consumers’ personal information may result in claims by the FTC that we have engaged in unfair or deceptive acts or practices in violation of Section 5(a) of the FTC Act. State consumer protection laws provide similar causes of action for unfair or deceptive practices for alleged privacy, data protection and data security violations.

Despite our efforts, we may not be successful in complying with the rapidly evolving privacy, data protection, and data security requirements discussed above. Any actual or perceived non-compliance with such requirements could result in litigation and proceedings against us by governmental entities, customers, or others, fines, civil or criminal penalties, limited ability or inability to operate our business, offer services, or market our platform in certain jurisdictions, negative publicity and harm to our brand and reputation, changes to our business practices, and reduced overall demand for our platform. Such occurrences could have an adverse effect on our business, financial condition, or results of operations.

We may not be able to adequately protect or enforce our rights in our intellectual property, which could harm the value of our brand and have an adverse effect on our business, financial condition, and results of operations.

Our intellectual property, particularly our trademark portfolio, is material to the conduct of our business, as our brand recognition is one of our key differentiating factors from our competitors. Our ability to implement our business plan successfully depends in part on our ability to further build brand recognition using our trademarks, service marks, trade dress, and other intellectual property, including our name and logos and the unique ambience of our restaurants. While we generally seek to register our material trademarks, our trademark applications may never be granted. Further, third parties may oppose our trademark applications, or seek to cancel our trademark applications.

Trademark rights generally exist on a country-by-country basis, and the possibility that such rights may be unavailable or unenforceable in certain jurisdictions could interfere with our international expansion. While we have filed applications to register trademarks in certain foreign jurisdictions, our trademarks may be subject to cancellation in such jurisdictions if we do not operate our business in such jurisdictions within a certain period of time specific to each jurisdiction.

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Our success is also dependent, in part, upon protecting our other intellectual property and proprietary information using a combination of copyright, trade secret, and other intellectual property laws, and confidentiality agreements with our employees and others. We maintain a policy requiring senior employees, as well as any employee or consultant who develops any material intellectual property for us, to enter into an agreement to protect our intellectual property rights and other proprietary information. However, we cannot guarantee that such agreements adequately protect our intellectual property rights and other proprietary information. We cannot guarantee that these agreements will not be breached, that we will have adequate remedies in the event of a breach, or that the respective employees or consultants will not assert rights to our intellectual property rights or other proprietary information. In addition, we may fail to enter into confidentiality agreements with all parties who have access to our trade secrets or other proprietary information.

While it is our policy to protect and defend vigorously our rights to our intellectual property, we cannot predict whether steps taken by us to protect and enforce our intellectual property rights will be adequate to prevent infringement, dilution, misappropriation or other violation of these rights or the use by others of restaurant features based upon, or otherwise similar to, our restaurant concept. It may be difficult for us to prevent others from copying elements of our concept and any litigation to enforce our rights will likely be costly and may not be successful. We cannot guarantee that we will have sufficient resources to enforce our intellectual property rights. In recent years, we have seen numerous concepts internationally that appear to have copied our trade dress or ambience, and foreign intellectual property laws may not provide the same protection our intellectual property received under U.S. law. Failure to protect or enforce our trademark rights could prevent us in the future from challenging third parties who use similar trademarks, which may in turn cause consumer confusion or negatively affect public perception of our brand, which could have an adverse effect on our business, international expansion, financial condition, and results of operations.

We rely heavily on information technology, and we may not timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our online and mobile platforms are accessible, which would harm our reputation, business, financial condition, and results of operations.

It is critical to our success, particularly with respect to our online and mobile ordering business, that our customers can access our online and mobile ordering platforms at all times. We rely heavily on information technology, including for operating our website, mobile application and online and mobile ordering platforms, point-of-sale processing in our restaurants, management of our supply chain, payment processing, collection of cash, marketing and promotions, payment card transactions, and other processes and procedures. Our ability to efficiently and effectively manage our business depends significantly on the reliability and capacity of these systems. We have previously experienced service disruptions and, in the future, we may experience service disruptions, outages or other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of customers accessing our platform simultaneously, downtime or outages from third-party services providers, and denial of service or fraud or security attacks. For example, several times in 2020, Uber Eats, our third-party delivery fulfilment partner for orders placed through our Native Delivery Channel, experienced outages that required us to temporarily shut down our Native Delivery Channel either entirely or in certain geographic markets, and, in 2019, our third-party credit card processing vendor experienced several outages. It is also possible that we may experience unexpected outages as we transition to DoorDash as our third-party delivery partner for orders placed through our Native Delivery Channel in the fourth quarter of fiscal year 2021. These types of outages caused by third parties result in periodic store closures, lost revenue, and customer complaints. In some instances, we may not be able to identify the cause or causes of these performance problems within an

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acceptable period of time, and, in cases where we rely on third-party technological infrastructure, we may not have sufficient contractual recourse against such third-party to make us whole for any loss.

It may become increasingly difficult to maintain and improve the availability of our platform, especially during peak usage times and as our product offerings become more complex and our customer traffic increases. If our online and mobile ordering platforms are unavailable when customers attempt to access them or they do not load as quickly as customers expect, customers may seek other services, and may not return to our platforms as often in the future, or at all. This would harm our ability to attract customers to our restaurants and decrease the frequency with which they use our platforms. Additionally, the failure of our systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms, network failures, natural disasters, terrorism, war, electrical failures, hackers, computer viruses, and other security issues could result in delays in customer service, reduce efficiency in our operations, and result in reputational harm. We expect to continue to make significant investments to maintain and improve the availability of our platforms and to enable rapid releases of new features and products for our multi-channel offerings. To the extent that we do not effectively address capacity constraints, respond adequately to service disruptions, upgrade our systems as needed or continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition, and results of operations would be harmed.

The digital and delivery business, and expansion thereof, is uncertain and subject to risk.

Digital innovation and growth remain a focus for us. We have focused on our digital strategy over the past few years, including the development and launch of our app; regular enhancements to our app; and use of third-party delivery partners, for both fulfilling delivery services for orders through our website or native smartphone application and through third-party delivery marketplaces. As the digital space around us continues to evolve, our technology needs to evolve concurrently to remain competitive with the industry. If we do not maintain digital systems that are competitive with the industry, our digital business may be adversely affected and could damage our sales. Certain competitors, including those with greater resources than we have, such as Chipotle, also have focused on a digital strategy and may be more successful in employing that strategy.

We rely on certain third parties for, among other things, our ordering and payment processing relating to our mobile app and website. Such services performed by these third parties could be damaged or interrupted by technological issues, which could then result in a loss of sales for a period of time, and pursuant to our contractual arrangements with such third parties it is unlikely that we would be able to recover for lost profits or other consequential damages. Information processed by these third parties could also be impacted by cyber-attacks, which could not only negatively impact our sales, but also harm our brand image.

We have historically relied on Uber Eats as our exclusive third-party delivery partner to power delivery services for orders through our Native Delivery Channel, but we are in the process of transitioning to DoorDash as our primary delivery partner for our Native Delivery Channel, which we expect to complete in the fourth quarter of fiscal year 2021. If Uber Eats, DoorDash or any future third-party delivery partner fails to fulfill its obligations or delivers unsatisfactory delivery service, for instance, by delivering orders late, by not having sufficient couriers to fulfill our orders, or by having a system outage, or if the transition to DoorDash is not seamless, we will not be able to provide proper delivery services to our customers through our native application. Errors in providing adequate delivery services may result in customer dissatisfaction, which could also result in loss of customers, loss in sales, increase of refunds and credits, and damage to our brand image and NPS. Additionally, as with any third party handling food, such delivery services increase the risk of food tampering while in transit.

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Any changes to our agreement with Uber Eats (prior to the transition), DoorDash, or any future third-party delivery partner, including the loss or addition of any third-party delivery partner, could also affect our ability to provide proper delivery services to our customers. We are also subject to risk if there is a shortage of delivery drivers in any of our markets for any period of time, which could result in a failure to meet our customers’ expectations and have a negative impact on our sales.

We also partner with each of the mainstream third-party delivery providers to provide food on their marketplaces. If any of these third-party delivery providers that we partner with experiences damage to their brand image, we may also see ramifications due to our partnership with them. Additionally, we currently compete with these third-party delivery providers through our Native Delivery Channel, and some of these providers may have greater financial resources to spend on marketing and advertising around their digital and delivery campaigns than we are able to at this time, which could adversely impact our business, financial performance, and results of operations. Additionally, over time our commission rates with any of our third-party delivery partners could increase, either for delivery services for orders through our website or native smartphone application or through third-party delivery marketplaces, which could have an adverse effect on our business, financial condition, and results of operations.

If we are unable to adapt to changes in technology, our business could be harmed.

Because our customers can access our website and mobile platform on a variety of mobile devices (including both Android and iOS), we will need to continuously modify and enhance our platform to keep pace with changes in mobile devices and other Internet-related hardware, software, communication, and browser technologies. We may not be successful in either developing these modifications and enhancements or in timely bringing them to market. For example, our customers were unable to order our delivery on our native Android smartphone application until March 2021, despite this feature being available on our iOS smartphone application for some time. Furthermore, uncertainties about the timing and nature of new mobile devices and other network platforms or technologies, or modifications to existing mobile devices, platforms or technologies, could increase our research and development expenses more than we anticipate. Any failure of our mobile platform to operate effectively with future technologies could result in dissatisfaction from customers and harm our business.

Our online and mobile ordering platforms are highly technical, and if they contain undetected errors, our business could be adversely affected.

Our online and mobile ordering platforms incorporate software that is highly technical and complex. Our software may now or in the future contain undetected errors, bugs or vulnerabilities. Some errors in our software code may only be discovered after the code has been released. Any errors, bugs or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of customers ordering from our online and mobile platforms, loss of revenue, or liability for damages, any of which could adversely affect our financial condition and results of operations. We also rely on multiple third-party vendors to run our mobile ordering platforms, including our delivery fulfilment services, and any errors, bugs, vulnerabilities or service outages that impact their software could have an adverse impact on our platforms. For instance, several times in 2020, Uber Eats, our third-party delivery fulfilment partner for orders placed through our Native Delivery Channel, experienced service outages, which adversely impacted our revenue. Further, we have a limited ability to control the remediation of such errors, bugs or vulnerabilities in a third party’s software, and as such, we may not be able to remedy such errors, bugs or vulnerabilities in a timely manner, which could have an adverse effect on our business, financial condition, or results of operations.

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The successful operation of our business depends upon the performance and reliability of Internet, mobile, and other infrastructure that is not under our control.

Both our in-restaurant and online and mobile ordering business depend on the performance and reliability of Internet infrastructure to process and fulfill orders, which is not under our control. Almost all access to the Internet is maintained through telecommunication operators. Disruptions in Internet infrastructure or the failure of telecommunications network operators to provide us with the bandwidth we need to provide our services could temporarily shut down our in-restaurant ordering business and could interfere with the speed and availability of our online and mobile ordering platforms. If our online and mobile ordering platforms are unavailable when our customers attempt to access them, or our applications do not load as quickly as they expect, our customers may not return to our online and mobile ordering platforms as often in the future, or at all. In addition, we have no control over the costs of the services provided by the national telecommunications operators. If mobile Internet access fees or other charges to Internet users increase, our customer traffic may decrease, which in turn may significantly decrease our revenue.

Our online and mobile ordering business depends on the efficient and uninterrupted operation of mobile communications systems. Despite any precautions we may take, the occurrence of an unanticipated problem, such as a power outage, telecommunications delay or failure, break-in to our systems, or computer virus, could result in delays or interruptions to our services and business interruption for us and our customers. Any of these events could damage our reputation, significantly disrupt our operations and subject us to liability, which could adversely affect our business, financial condition, and results of operations.

Third parties may claim that our business or operations infringe their intellectual property rights, and this may create liability for us or otherwise have an adverse effect on our business, financial condition, and results of operations.

We may face claims by third parties that our or Spyce’s technology has infringed, diluted, misappropriated, or otherwise violated their intellectual property rights. Any such litigation may be costly and could divert other resources from our business. If we are unable to successfully defend against such claims, we may be subject to injunctions that could require expensive changes to our business operations or prevent or delay us from using our trademarks or other applicable technology, and we may be liable for damages, which in turn could have an adverse effect on our business, financial condition, and results of operations.

Risks Related to Ownership of Our Class A Common Stock

Our stock price may be volatile, and the value of our Class A common stock may decline.

The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including:

• actual or anticipated fluctuations in our financial condition or results of operations;

• variance in our financial performance from expectations of securities analysts;

• changes in our projected operating and financial results;

• actual or anticipated effects of the COVID-19 pandemic on our business;

• announcements by us or our competitors of significant business developments, acquisitions, or new offerings;

• announcements or concerns regarding real or perceived quality or food safety issues with our products or similar products of our competitors;

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• our involvement in litigation;

• future sales of our common stock by us or our stockholders, as well as the anticipation of lock-up releases;

• novel and unforeseen market forces and trading strategies;

• changes in senior management or key personnel;

• the trading volume of our Class A common stock; and

• changes in the anticipated future size and growth rate of our market.

Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may also negatively impact the market price of our Class A common stock, particularly in light of uncertainties surrounding the COVID-19 pandemic and the related impacts.

The dual-class structure of our common stock has the effect of concentrating voting control with our founders, who have substantial control over us and will be able to influence corporate matters, including controlling the outcome of director elections.

Our Class B common stock has ten votes per share, whereas our Class A common stock, which is the stock we are offering in this offering, has one vote per share. Immediately following the completion of this offering, all outstanding shares of our Class B common stock will be beneficially owned by our founders, Jonathan Neman, Nicolas Jammet, and Nathaniel Ru, who will collectively represent approximately 59.6% of the voting power of our outstanding capital stock, assuming no exercise of the underwriters’ option to purchase additional shares. As a result, after this offering, our founders will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors, approval of significant corporate transactions (such as a merger), and amendments of our organizational documents. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders. The interests of our founders may not always coincide with your interests or the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, and might affect the prevailing market price for our common stock.

Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes. The conversion of shares of our Class B common stock into shares of our Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.

Any founder’s shares of Class B common stock will convert automatically into Class A common stock, on a one-to-one basis, upon either the (i) the sale or transfer of such share of Class B common stock (except for certain permitted transfers described in our amended and restated certificate of incorporation, including transfers for tax and estate planning purposes or to any other founder or any affiliate of any founder) or (ii) the one-year anniversary of the death or permanent disability of such founder.

Additionally, all outstanding shares of our Class B common stock will convert automatically into shares of our Class A common stock on the final conversion date, defined as the earlier of (i) the nine-month anniversary of the death or permanent disability of the last of the founders; (ii) the last trading day of the fiscal year during which the 10th anniversary of the effectiveness of the registration statement of which this prospectus forms a part occurs, or (iii) the date specified by a vote of the

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holders of a majority of the outstanding shares of Class B common stock; provided, however, that the final conversion date may be extended by the affirmative vote of the holders of the majority of the voting power of the then-outstanding shares of Class A common stock not held by a founder or an affiliate or permitted transferee of a founder and entitled to vote generally in the election of directors, voting together as a single class.

No public market for our Class A common stock currently exists, and an active public trading market may not develop or be sustained following this offering.

Prior to this offering, no public market for our common stock currently existed. An active public trading market for our common stock may not develop following the completion of this offering or, if developed, may not be sustained. We determined the initial public offering price for our Class A common stock through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of our Class A common stock after this offering. The market value of our Class A common stock may decrease from the initial public offering price. As a result of these and other factors, you may be unable to resell your shares of our Class A common stock at or above the initial public offering price. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies by using our shares as consideration.

In addition, we currently anticipate that up to 1% of the shares of Class A common stock offered hereby will, at our request, be offered to retail investors through Robinhood Financial, LLC (“Robinhood”), as a selling group member, via its online brokerage platform. In addition, at our request, the underwriters have reserved up to 1% of the shares of Class A common stock offered by this prospectus for sale at the initial public offering price through a separate directed share program to eligible customers of the company. This customer directed share program will be arranged through and administered by Robinhood, as a selling group member via its online brokerage platform. There may be risks associated with the use of the Robinhood platform that we cannot foresee, including risks related to the technology and operation of the platform, and the publicity and the use of social media by users of the platform that we cannot control, and potentially increased costs in connection with our annual proxy solicitation.

We previously identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.

In recent periods, we have experienced rapid growth, and this growth has placed considerable strain on our IT and accounting systems, processes, and personnel. As a result, in connection with the audit of our consolidated financial statements as of and for the years ended December 29, 2019 and December 27, 2020, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have concluded that this material weakness arose because we did not have the proper business processes, systems, personnel, and related internal controls in place.

The material weakness that we and our independent registered public accounting firm identified occurred because:

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(i) We had a lack of access security controls, primarily related to user provisioning, user deprovisioning, user access reviews, user administration, and user authentication, whereby we did not sufficiently document, approve, remove/disable, review, and/or configure access based upon least privilege and with consideration of segregation of duties;

(ii) We had insufficient system change controls, as we had not implemented a formalized change management process for financially relevant systems in our IT environment. Multiple change control deficiencies were identified, whereby we were unable to demonstrate sufficient oversight and governance over the testing and approval of changes prior to those changes being deployed into the production environments of relevant systems our IT environment; and

(iii) We did not have adequate third-party oversight, as we had not formally implemented policies and procedures or controls to effectively monitor ongoing usage of outsourced service providers. This includes obtaining, reviewing, and assessing the sufficiency of third-party reports describing the extent of what services these third parties provide to us, what we rely on as part of these reports, and our responsibilities that are carved out of these reports.

We believe we have remediated the material weakness as of June 27, 2021. Despite remediating this material weakness, we cannot be certain that we have identified all of our existing material weaknesses, or that we will not in the future have additional material weaknesses in our internal control over financial reporting. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our consolidated financial statements, and could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our Class A common stock, and we could be subject to sanctions or investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities.

We rely on data from internal tools to calculate certain of our performance metrics. Real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.

We track our performance metrics with internal tools that are not independently verified by any third party. Our internal tools have a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our performance metrics, including the key metrics we report. If the internal tools we use to track these metrics over- or undercount performance or contain errors, the data we report may not be accurate and our understanding of certain details of our business may be distorted, which could affect our longer-term strategies.

There are also inherent challenges in measuring the order frequency of our digital and non-digital customers. For example, for digital customers, because a unique customer is determined based on the customer’s login information, a single individual who places orders using different login information would be counted as multiple unique customers, and multiple individuals who place orders using the same login information would be counted as a single unique customer, and for non-digital customers, a single individual who makes purchases using multiple credit cards would be counted as multiple unique customers, and multiple individuals who make purchases using the same credit card information would be counted as a single unique customer. For these and other reasons, any calculations based on the number of unique customers may not accurately reflect the number of people actually placing orders through one of our Digital Channels or making purchases through the non-digital component of our In-Store Channel.

We are continually seeking to improve our ability to measure our performance metrics, and regularly review our processes to assess potential improvements to their accuracy. However, the

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improvement of our tools and methodologies could cause inconsistency between current data and previously reported data, which could confuse investors or raise questions about the integrity of our data. Similarly, as both the industry in which we operate and our business continue to evolve, so too might the metrics by which we evaluate our business. We may revise or cease reporting metrics if we determine such metrics are no longer accurate or appropriate measures of our performance. If analysts or investors do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation may be harmed.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.

As a public company, we will incur significant finance, legal, accounting, and other expenses, including director and officer liability insurance, that we did not incur as a private company, which we expect to further increase after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, NYSE listing requirements, and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.

The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results. Moreover, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures, and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. In connection with the audit of our consolidated financial statements as of and for the years ended December 29, 2019 and December 27, 2020, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting because we did not have the proper business processes, systems, personnel, and related internal controls in place. While we believe the material weakness has been remediated as of June 27, 2021, we cannot be certain that we have identified all of our existing material weaknesses, or that we will not in the future have additional material weaknesses in our internal control over financial reporting. Any failure to maintain internal control over financial reporting could result in our inability to detect errors on a timely basis or accurately report our financial condition or operating results and our consolidated financial statements may be materially misstated as a result. Effective internal control is necessary for us to produce reliable financial reports and is important to prevent fraud.

Pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”) we will be required to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for the fiscal year ending December 25, 2022. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting in our first annual report required to be filed with the SEC following the date we are no longer an emerging growth company. To prepare for eventual compliance with Section 404, we will be engaged in a costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404, but we may not be able to complete our evaluation, testing, and any required remediation in a timely fashion once initiated. Our compliance with Section 404 will require that we incur substantial expenses and expend significant management efforts. We will need to

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hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.

We will have broad discretion in the use of the net proceeds to us from this offering and may not use them effectively.

We will have broad discretion in the application of the net proceeds that we receive from this offering, including for any of the purposes described in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds that we receive from this offering, our ultimate use may vary substantially from our currently intended use. Investors will need to rely upon the judgment of our management with respect to the use of such proceeds. Pending use, we may invest the net proceeds that we receive from this offering in short-term, investment-grade, interest-bearing securities, such as money market accounts, certificates of deposit, commercial paper, and guaranteed obligations of the U.S. government that may not generate a high yield for our stockholders. If we do not use the net proceeds that we receive in this offering effectively, our business, financial condition, results of operations and prospects could be adversely affected, and the market price of our Class A common stock could decline.

The dual-class structure of our common stock may adversely affect the trading market for our Class A common stock.

We cannot predict whether our dual-class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with dual class or multi-class share structures in certain of their indexes. In July 2017, S&P Dow Jones and FTSE Russell announced changes to their eligibility criteria for the inclusion of shares of public companies on certain indices, including the Russell 2000, the S&P 500, the S&P MidCap 400 and the S&P SmallCap 600, to exclude companies with multiple classes of shares of common stock from being added to these indices. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. As a result, our dual-class capital structure would make us ineligible for inclusion in any of these indices, and mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not be investing in our stock. These policies are still fairly new, and it remains unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from the indices in the longer term, but it is possible that they may depress these valuations compared to those of other similar companies that are included. Furthermore, we cannot assure you that other stock indices will not take a similar approach to S&P Dow Jones or FTSE Russell in the future. Exclusion from indices could make our Class A common stock less attractive to investors and, as a result, the market price of our Class A common stock could be adversely affected.

Future sales of our Class A common stock in the public market could cause the market price of our common stock to decline.

Sales of a substantial number of shares of our Class A common stock in the public market following the completion of this offering, or the perception that these sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of additional equity securities. Many of our existing equity holders have substantial unrecognized

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gains on the value of the equity they hold based upon the price of this offering, and therefore they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares. We are unable to predict the timing of or the effect that such sales may have on the prevailing market price of our Class A common stock.

All of our directors and officers and the holders of substantially all of our capital stock and securities convertible into our capital stock are subject to lock-up agreements that restrict their ability to transfer shares of our capital stock during specified periods of time after the date of this prospectus, subject to certain exceptions. Shares of our Class A common stock as well as shares underlying outstanding options will be eligible for sale in the public market in the near future as set forth below:

• Beginning at market open on the later of (i) the date on which two full trading days have elapsed after the public dissemination of our earnings release for the first completed fiscal quarter following the most recent period for which financial statements are included in this prospectus (such date, the “Trading Window Completion Date”) and (ii) the third trading day (such date, the “Trading Price Condition Date”) after the date on which the closing price of our Class A common stock on The New York Stock Exchange exceeds 133% of the initial public offering price as set forth on the cover page of this prospectus, (x) for at least 10 trading days in any 15-trading-day period ending on or after the 90th day after the date of this prospectus and (y) on the fifteenth trading day of such period (the “Release Date”); provided that if the Trading Price Condition Date occurs during a closed trading window after the Trading Window Condition Date, the Release Date will occur at market open on the date, determined in accordance with our insider trading policy, that our trading window period next opens following the Trading Price Condition Date, a holder who is not a Company Founder or a Spyce Holder (as defined below) may sell a number of shares equal to 20% of the aggregate number of outstanding vested shares, any security convertible into or exercisable or exchangeable for common stock and vested equity awards, including shares and equity awards that are held by any trust for the direct or indirect benefit of the holder or of an immediate family member of such holder, measured as of the date of this prospectus (such holdings, “Vested Holdings”).

• For Company Founders, beginning on the Release Date, a Company Founder may (a) sell a number of shares equal to 10% of his Vested Holdings and (b) may pledge as collateral a number of shares equal to 20% of his Vested Holdings (or such lower amount as may be approved or required by our board of directors); provided that the number of shares that may be pledged as collateral pursuant to (b) is automatically reduced by the number of shares sold pursuant to (a).

• Beginning on the date that is 180 days after the date of this prospectus or, if the date that is 180 days after the date of this prospectus falls during one of our quarterly blackout periods as established in our insider trading policy, unless determined otherwise by our board of directors, 10 trading days prior to the date that such blackout period begins (the “Conditional Early Release Date”), provided that the Conditional Early Release Date occurs on or after the 150^th day after the date of this prospectus, all remaining shares will be eligible for sale.

Notwithstanding anything else in this paragraph, we may elect, by written notice to Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC at least five days before any release described in the first or second bullet above (including with respect to the ability to pledge shares), that no such early release will occur. If we so elect that no such release will occur, we will publicly announce such decision prior to the date scheduled for such release. For the purposes of this paragraph, a “Company Founder” refers to Jonathan Neman, Nicolas Jammet, or Nathaniel Ru, and a “Spyce Holder” refers to any holder of (i) Class S Stock or securities convertible or exchangeable into Class S Stock issued pursuant to the terms of that certain Agreement and Plan of Reorganization by and among us, Spyce Food Co., a Delaware corporation, and the other parties thereto (as amended or otherwise modified

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from time to time, the “Merger Agreement”) or (ii) common stock issued or issuable pursuant to awards granted under the Spyce Food Co. 2016 Option and Grant Plan (as assumed by us pursuant to the Merger Agreement).

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC may, in their sole discretion, permit our stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements, subject to applicable notice requirements. If not earlier released, all of the shares of Class A common stock sold in this offering will become eligible for sale upon expiration of the lock-up period, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act.

In addition, there were 14,062,593 shares of Class A common stock issuable upon the exercise of outstanding stock options as of September 26, 2021. We intend to register all of the shares of common stock issuable upon exercise of outstanding stock options, or other equity incentives we may grant in the future, for public resale under the Securities Act. The shares of Class A common stock will become eligible for sale in the public market to the extent such options are exercised, subject to the lock-up agreements described above and compliance with applicable securities laws.

Further, based on shares outstanding as of September 26, 2021, holders of approximately 72,250,665 shares, or 68% of our capital stock after the completion of this offering (assuming no exercise of the underwriters’ option to purchase additional shares from us), will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

You will experience immediate and substantial dilution in the net tangible book value of the shares of Class A common stock you purchase in this offering.

The initial public offering price of our Class A common stock is substantially higher than the pro forma as adjusted net tangible book value per share of our Class A common stock immediately after this offering. If you purchase shares of our Class A common stock in this offering, you will suffer immediate dilution of $19.31 per share, representing the difference between our pro forma as adjusted net tangible book value per share after giving effect to the sale of Class A common stock in this offering and the initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus. See the section titled “Dilution.”

We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We have never declared or paid cash dividends on our capital stock and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, you may need to rely on sales of our Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on your investment.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our Class A common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws that will be in effect upon the completion of this offering may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws will include provisions that:

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• authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our common stock;

• require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

• specify that special meetings of our stockholders can be called only by our board of directors, the chair of our board of directors, or our chief executive officer;

• establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

• prohibit cumulative voting in the election of directors;

• provide that our directors may be removed only upon the vote of at least 66 2/3% of the voting power of our then-outstanding shares of capital stock;

• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and

• require the approval of our board of directors or the holders of at least 66 2/3% of the voting power of our then-outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.

Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your shares of our Class A common stock in an acquisition.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

• any derivative action or proceeding brought on our behalf;

• any action asserting a claim of breach of fiduciary duty;

• any action asserting a claim against us arising under the Delaware General Corporation Law (the “DGCL”), our amended and restated certificate of incorporation or our amended and restated bylaws;

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• any action or proceeding to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws (including any right, obligation, or remedy thereunder);

• any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and

• any action asserting a claim against us that is governed by the internal-affairs doctrine or otherwise related to our internal affairs.

This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

This exclusive-forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business, financial condition, results of operations, and prospects.

General Risk Factors

Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control.

Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control, and could fail to meet investors’ expectations for various reasons, including:

• negative publicity about the safety of our food, employment-related issues, litigation, or other issues involving our restaurants;

• fluctuations in supply costs, particularly for our most significant ingredients, and our inability to offset the higher cost with price increases without adversely impacting customer spending;

• labor availability and wages of our restaurant employees;

• increases in marketing or promotional expenses;

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• the timing of new restaurant openings and related revenues and expenses, and the operating costs at newly opened restaurants;

• the impact of inclement weather and natural disasters, such as winter storms, freezes, and droughts, which could decrease customer traffic and increase the costs of ingredients;

• changes in the senior management team;

• the announcement of any mergers & acquisitions or other strategic partnerships;

• the amount and timing of stock-based compensation;

• litigation, settlement costs and related legal expenses;

• tax expenses, asset impairment charges, and non-operating costs; and

• variations in general economic conditions, including the impact of declining interest rates on our interest income.

As a result of any of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year. Our key performance metrics may also fluctuate as a result of these or other factors.

Our current insurance may not provide adequate levels of coverage against claims.

Our current insurance policies may not be adequate to protect us from liabilities that we incur in our business. Insurance availability, coverage terms, and pricing continue to vary with market conditions, particularly as a public company. Obtaining adequate insurance is particularly challenging for companies based in California with thousands of non-exempt employees, and retentions for certain of our insurance policies (including our employment practices liability insurance insurance) are quite high. Additionally, in the future, our insurance premiums and retentions may increase, we may not be able to obtain similar levels of insurance on reasonable terms, or at all, and we may choose insurance policies that result in more risk for us. Any substantial inadequacy of, or inability to obtain, insurance coverage could have an adverse effect on our business, financial condition, and results of operations.

There are certain types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure, including any wage and hour or other similar employment-based claims brought by current or former employees as well as certain natural disasters in some of our markets—for example, flood and hurricane insurance in markets such as Houston or South Florida. Such losses could have an adverse effect on our business, financial condition, and results of operations. Although we have obtained directors’ and officers’ liability insurance, builders risk insurance, property and casualty insurance, workers compensation insurance, automobile insurance, employment practices liability insurance, and cyber insurance, we may not be able to maintain such coverage at a reasonable cost in the future, if at all. We may not receive adequate coverage or reimbursement from our insurers for potential issues that are beyond our control. It may be more costly for us to obtain certain types of insurance that protect against unforeseen cultural events, and we cannot be sure that additional restaurant closures and damage will not occur in the future. Failure to maintain adequate insurance, including directors’ and officers’ liability insurance, would likely adversely affect our ability to attract and retain qualified officers and directors. In addition, we routinely contract with third parties, including distributors and suppliers of produce, poultry and other dry goods, and these third parties may not maintain sufficient liability insurance policies to cover potential claims that may affect us, and we may not have adequate contractual recourse against such parties to cover such losses.

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Adverse developments in applicable tax laws could have a material and adverse effect on our business, financial condition, and results of operations. Our effective tax rate could also change materially as a result of various evolving factors, including changes in income tax law resulting from the most recent U.S. presidential and congressional elections or changes in the scope of our operations.

We and our corporate subsidiaries are subject to income and non-income taxation, in each case, at the federal level and by certain states and municipalities because of the scope of our operations. In determining our tax liability for these jurisdictions, we must monitor changes to the applicable tax laws and related regulations. While our existing operations have been implemented in a manner we believe is in compliance with current prevailing laws, one or more taxing jurisdictions could seek to impose incremental or new taxes on us. In addition, as a result of the most recent presidential and congressional elections in the United States, there could be significant changes in tax law and regulations that could result in an additional federal income taxes being imposed on us. Any adverse developments in these laws or regulations, including legislative changes, judicial holdings, or administrative interpretations, could have a material and adverse effect on our business, financial condition, and results of operations. Finally, changes in the scope of our operations, including expansion to new geographies, could increase the amount of taxes to which we are subject, and could increase our effective tax rate.

We are subject to review and audit by U.S. federal, state, and local tax authorities and could be subject to a future tax audit in these jurisdictions. Any adverse outcome of such a review or audit could have a negative effect on our financial position and results of operations.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty.

Upon the completion of this offering, our amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, executive officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute other stockholders.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors and consultants under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in companies and issue equity securities as consideration for any such acquisition or investment, including issuances in connection with milestone consideration. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Class A common stock to decline.

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We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we intend to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including:

• being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this prospectus;

• not being required to comply with the auditor attestation requirements of Section 404;

• not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

• reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements; and

• exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We intend to take advantage of the extended transition period for adopting new or revised accounting standards under the JOBS Act as an emerging growth company. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our Class A common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.

We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of this offering; (ii) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (iii) the date on which we have, during the previous rolling three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of June 30 of such fiscal year.

We cannot predict if investors will find our Class A common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be as comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our Class A common stock could decline.

The market price and trading volume of our Class A common stock following the completion of this offering will be heavily influenced by the way analysts interpret our financial information and other

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disclosures. We do not have control over these analysts. If few securities analysts commence coverage of us, or if industry analysts cease coverage of us, our stock price would be negatively affected. If securities or industry analysts do not publish research or reports about our business, downgrade our Class A common stock, or publish negative reports about our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our Class A common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our Class A common stock.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words or phrases such as “anticipate,” “are confident that,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

• our expectations regarding our revenue, restaurant operating costs, operating expenses, and other results of operations, as well as our key operating metrics;

• our expectations regarding our sales channel mix and impact on our margins and business;

• our expectations regarding the COVID-19 pandemic, including the continued rise in activity across our restaurants as restrictions ease and vaccinations accelerate;

• our expectations about customer behavior trends;

• our plan to open at least 30 domestic, company-owned restaurants in 2021 and to approximately double our current footprint of restaurants over the next three to five years;

• our plan to diversify our store formats by adding drive-thru and pick-up only locations, and to bring sweetgreen into a wider variety of neighborhoods;

• our belief that sweetgreen is well positioned to be a category-defining food brand for the future and that sweetgreen has the potential to be a leading global restaurant and lifestyle brand that will make an impact on the future of food;

• our bold vision to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect;

• our commitment to becoming carbon neutral by the end of 2027;

• industry and market trends and our anticipated market opportunity;

• the costs and success of our sales and marketing efforts and our ability to promote our brand;

• our plan to continue fostering new collaborations with cultural influencers who believe in our mission;

• our belief that we have a durable competitive advantage;

• our successful development and integration of Spyce’s automation technology and the potential for the acquisition to allow us to elevate our team member experience, provide a more consistent customer experience, and, over time, improve our capacity and throughput, and have a positive impact on Restaurant-Level Profit Margin;

• potential future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;

• our ability to effectively manage and scale our supply chain;

• our growth strategies, including those related to our restaurant footprint, brand awareness, digital users, menu offerings, and profitability and financial returns; and

• our expected use of proceeds from this offering.

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You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment.

New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that contain “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

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MARKET, INDUSTRY, AND OTHER DATA

This prospectus contains statistical data and estimates that are based on independent industry publications or other publicly available information. While we believe the industry and market data included in this prospectus are reliable and are based on reasonable assumptions, this data involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. In some cases, we do not expressly refer to the sources from which this data is derived. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Among other items, certain of the information included in this prospectus was published prior to the outbreak of the COVID-19 pandemic and did not anticipate the virus or its impacts. These and other factors could cause results to differ materially from those expressed in these publications and reports.

This prospectus includes references to our aided brand awareness, which measures brand recognition by counting the number of people who express knowledge of a brand or product when prompted. We track aided brand awareness through internal and third-party surveys. Our average aided brand awareness as of November 2019 is based on a study we commissioned from Bastion db5, an independent third-party research agency that surveyed 300 fast casual customers in each of our existing markets and contemplated future markets. Our average aided brand awareness as of August 2021 is based on a survey we conducted of approximately 230 fast casual customers in each of our existing markets and contemplated future markets.

This prospectus includes references to the number of our social media followers across our platforms. This number, which is the aggregate number of followers on each of the social media platforms we use, does not purport to be the number of unique followers, as certain accounts follow us on multiple platforms.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately $274.5 million (or approximately $316.8 million if the underwriters exercise their option to purchase additional shares of our Class A common stock from us in full) based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase (decrease) in the assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $11.8 million, assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares of Class A common stock offered by us would increase (decrease) the net proceeds to us from this offering by approximately $22.6 million, assuming the assumed initial public offering price of $24.00 per share remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock and facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds we receive from this offering. However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures, as well as developing the technology acquired in our recent acquisition of Spyce Food Co. We may also use a portion of the net proceeds we receive from this offering to acquire complementary businesses, products, services, or technologies. However, we do not have agreements or commitments to enter into any acquisitions at this time.

We will have broad discretion over how to use the net proceeds we receive from this offering. We intend to invest the net proceeds we receive from this offering that are not used as described above in investment-grade, interest- bearing instruments.

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DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate declaring or paying any cash dividends in the foreseeable future. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions (including any restrictions in our then-existing debt arrangements), capital requirements, business prospects, and other factors our board of directors may deem relevant.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of September 26, 2021:

• on an actual basis;

• on a pro forma basis, giving effect to (i) the Reclassification and Exchange, (ii) the Spyce Conversion, and (iii) the filing and effectiveness of our amended and restated certificate of incorporation, each of which will occur immediately prior to the completion of this offering; and

• on a pro forma as adjusted basis, giving effect to (i) the pro forma adjustments described above and (ii) our receipt of $274.5 million in estimated net proceeds from the sale of 12,500,000 shares of Class A common stock that we are offering at an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus.

	September 26, 2021
	Actual			Pro Forma			Pro Forma As Adjusted
	(in thousands except share and per share amounts)
Cash and cash equivalents	$	137,031		$	137,031		$	411,531
Preferred stock, $0.001 par value per share: 71,919,849 shares authorized, 69,231,197 shares issued and outstanding, actual; and no shares authorized, issued and outstanding, pro forma and pro forma as adjusted	$	614,496		$	-		$	-
Stockholders’ (deficit) equity:
Preferred stock, $0.001 par value per share: no shares authorized, issued and outstanding, actual; 200,000,000 shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted		-			-			-
Common stock, $0.001 par value per share: 122,000,000 shares authorized, 21,893,706 shares issued and outstanding, actual; and no shares authorized or issued and outstanding, pro forma and pro forma as adjusted		22			-			-
Class A common stock, $0.001 par value per share: no shares authorized, issued and outstanding, actual; 2,000,000,000 shares authorized, no shares issued and outstanding, pro forma; 2,000,000,000 shares authorized, 92,834,226 shares issued and outstanding, pro forma as adjusted		-			80			93
Class B common stock, $0.001 par value per share: no shares authorized, issued and outstanding, actual; 300,000,000 shares authorized, no shares issued and outstanding, pro forma; 300,000,000 shares authorized, 13,477,303 shares issued and outstanding, pro forma as adjusted		-			13			13
Class S stock, $0.001 par value per share: 1,933,258 shares authorized, 1,843,493 shares issued and outstanding, actual; no shares authorized or issued and outstanding, pro forma and pro forma as adjusted		2			-			-
Additional paid-in capital		82,794			710,577			985,064
Accumulated deficit		(410,035	)		(418,349	)		(418,349	)
Total stockholders’ (deficit) equity		(327,217	)		292,321			566,821
Total capitalization	$	287,279		$	292,321		$	566,821

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Each $1.00 increase (decrease) in the assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) each of our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ (deficit) equity and total capitalization by approximately $11.8 million, assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares of Class A common stock offered by us would increase (decrease) each of our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ (deficit) equity and total capitalization by approximately $22.6 million, assuming the assumed initial public offering price of $24.00 per share remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

The number of shares of Class A common stock and Class B common stock that will be outstanding after this offering is based on 80,334,226 shares of Class A common stock and 13,477,303 shares of Class B common stock outstanding as of September 26, 2021, after giving effect to the Reclassification and Exchange and Spyce Conversion as if they had occurred as of September 26, 2021, and excludes:

• 6,015,384 shares of Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 under our 2009 Plan, with a weighted-average exercise price of $3.28 per share;

• 7,963,985 shares of our Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 under our 2019 Plan, with a weighted-average exercise price of $9.61 per share;

• 8,330,125 shares of our Class A common stock issuable upon the vesting and settlement of restricted stock units granted after September 26, 2021 under our 2019 Plan;

• 83,224 shares of our Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 assumed in connection with our acquisition of Spyce Food Co., with a weighted-average exercise price of $8.74 per share;

• 55,000 shares of our Class A common stock issuable upon the exercise of warrants to purchase shares of our common stock outstanding as of September 26, 2021;

• 235,000 shares of our Class A common stock issuable upon the exercise of the Series F Warrant outstanding as of September 26, 2021;

• 403,171 shares of our Class A common stock (based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus) issuable upon the vesting and settlement of restricted stock units to be granted under our 2021 Plan to certain employees in connection with the Spyce acquisition following the completion of this offering;

• up to 833,333 shares of our Class A common stock (based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus) issuable to the former stockholders of Spyce upon the achievement of certain milestones;

• approximately 375,000 shares of our Class A common stock issuable upon the vesting and settlement of restricted stock units to be granted under our 2021 Plan following the completion of this offering;

• up to 35,166,753 shares of Class A common stock reserved under our 2021 Plan, which is the sum of (i) 11,500,000 new shares reserved for future issuance and (ii) 23,666,753 shares,

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which as of the date our board of directors approved the 2021 Plan was the sum of (x) the number of shares that remained available for grant of future awards under the 2019 Plan and will cease to be available for issuance under the 2019 Plan at the time our 2021 Plan becomes in connection with this offering and (y) the number of shares underlying outstanding awards granted under our 2009 Plan and 2019 Plan (which shares become available for issuance pursuant to the 2021 Plan to the extent that such shares expire, or are forfeited, cancelled, withheld, or reacquired), as well as any future increases in the number of shares of Class A common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans;” and

• 3,000,000 shares of Class A common stock reserved for issuance under our ESPP, which will become effective in connection with this offering, as well as any future increases in the number of shares of Class A common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans.”

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DILUTION

If you invest in our Class A common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of Class A common stock and the pro forma as adjusted net tangible book value per share immediately after this offering.

As of September 26, 2021, our historical net tangible book value was $(395.1) million, or $(18.05) per share, based on 21,893,706 shares of common stock issued and outstanding as of such date. Our historical net tangible book value per share represents total tangible assets, less total liabilities and preferred stock, divided by the aggregate number of shares of common stock outstanding as of September 26, 2021.

Our pro forma net tangible book value as of September 26, 2021 was $224.4 million, or $2.39 per share. Our pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of our shares of common stock outstanding as of September 26, 2021, after giving effect to (i) the Reclassification and Exchange and (ii) the Spyce Conversion.

After giving effect to the pro forma adjustments described above and the sale by us of 12,500,000 shares of Class A common stock in this offering at an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 26, 2021 would have been $498.9 million, or $4.69 per share. This amount represents an immediate increase in pro forma as adjusted net tangible book value of $2.30 per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value of $19.31 per share to new investors purchasing Class A common stock in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by investors purchasing Class A common stock in this offering. The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share			$	24.00
Historical net tangible book value per share as of September 26, 2021	$	(18.05)
Increase in net tangible book value per share attributable to the pro forma adjustments described above		20.44
Pro forma net tangible book value per share as of September 26, 2021		2.39
Increase in pro forma as adjusted net tangible book value per share attributable to new investors purchasing shares in this offering		2.30
Pro forma as adjusted net tangible book value per share after giving effect to this offering				4.69
Dilution per share to new investors purchasing shares in this offering			$	19.31

The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering. Each $1.00 increase (decrease) in the assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $0.11 per share and increase (decrease) the immediate dilution to new investors by $0.89 per share, in each case assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase of 1.0 million shares in the number of shares of Class A

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common stock offered by us would increase our pro forma as adjusted net tangible book value by approximately $0.17 per share and decrease the dilution to new investors by approximately $0.17 per share, and each decrease of 1.0 million shares in the number of shares of Class A common stock offered by us would decrease our pro forma as adjusted net tangible book value by approximately $0.17 per share and increase the dilution to new investors by approximately $0.17 per share, in each case assuming the assumed initial public offering price of $24.00 per share remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares of Class A common stock from us in full, our pro forma as adjusted net tangible book value as of September 26, 2021 would be $5.00 per share, and the immediate dilution in pro forma net tangible book value per share to new investors in this offering would be $19.00 per share assuming the assumed initial public offering price of $24.00 per share remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

The following table summarizes, as of September 26, 2021, on a pro forma as adjusted basis as described above, the number of shares of our capital stock, the total consideration and the average price per share (i) paid to us by existing stockholders and (ii) to be paid by new investors acquiring our Class A common stock in this offering at an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares Purchased				Total Consideration				Weighted- Average Price Per Share
	Number		Percent		Amount		Percent
Existing stockholders		93,811,529		88.2%	$	676,692,660		69.3%	$	7.21
New investors		12,500,000		11.8		300,000,000		30.7		24.00
Totals		106,311,529		100%	$	976,692,660		100%

Each $1.00 increase (decrease) in the assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by approximately $12.5 million, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and before deducting underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares of Class A common stock offered by us would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by $24.0 million, assuming the assumed initial public offering price of $24.00 per share remains the same, and before deducting underwriting discounts and commissions and estimated offering expenses payable by us. In addition, to the extent any outstanding options to purchase Class A common stock are exercised or restricted stock units are settled, new investors will experience further dilution.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’ option to purchase additional shares of Class A common stock. If the underwriters exercise their option to purchase additional shares of Class A common stock in full from us, our existing stockholders would own approximately 87% and our new investors would own approximately 13% of the total number of shares of our common stock outstanding upon the completion of this offering.

The number of shares of Class A common stock and Class B common stock that will be outstanding after this offering is based on 80,334,226 shares of our Class A common stock and

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13,477,303 shares of Class B common stock outstanding as of September 26, 2021, after giving effect to the Reclassification and Exchange and Spyce Conversion as if they had occurred as of September 26, 2021, and excludes:

• 6,015,384 shares of Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 under our 2009 Plan, with a weighted-average exercise price of $3.28 per share;

• 7,963,985 shares of our Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 under our 2019 Plan, with a weighted-average exercise price of $9.61 per share;

• 8,330,125 shares of our Class A common stock issuable upon the vesting and settlement of restricted stock units granted after September 26, 2021 under our 2019 Plan;

• 83,224 shares of our Class A common stock issuable upon the exercise of stock options outstanding as of September 26, 2021 assumed in connection with our acquisition of Spyce Food Co., with a weighted-average exercise price of $8.74 per share;

• 55,000 shares of our Class A common stock issuable upon the exercise of warrants to purchase shares of our common stock outstanding as of September 26, 2021;

• 235,000 shares of our Class A common stock issuable upon the exercise of the Series F Warrant outstanding as of September 26, 2021;

• 403,171 shares of our Class A common stock (based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus) issuable upon the vesting and settlement of restricted stock units to be granted under our 2021 Plan to certain employees in connection with the Spyce acquisition following the completion of this offering;

• up to 833,333 shares of our Class A common stock (based on an assumed initial public offering price of $24.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus) issuable to the former stockholders of Spyce upon the achievement of certain milestones;

• approximately 375,000 shares of our Class A common stock issuable upon the vesting and settlement of restricted stock units to be granted under our 2021 Plan following the completion of this offering;

• up to 35,166,753 shares of Class A common stock reserved under our 2021 Plan, which is the sum of (i) 11,500,000 new shares reserved for future issuance and (ii) 23,666,753 shares, which as of the date our board of directors approved the 2021 Plan was the sum of (x) the number of shares that remained available for grant of future awards under the 2019 Plan and will cease to be available for issuance under the 2019 Plan at the time our 2021 Plan becomes in connection with this offering and (y) the number of shares underlying outstanding awards granted under our 2009 Plan and 2019 Plan (which shares become available for issuance pursuant to the 2021 Plan to the extent that such shares expire, or are forfeited, cancelled, withheld, or reacquired), as well as any future increases in the number of shares of Class A common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans;” and

• 3,000,000 shares of Class A common stock reserved for issuance under our ESPP, which will become effective in connection with this offering, as well as any future increases in the number of shares of Class A common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans.”

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To the extent that any outstanding options are exercised or new options are issued under our stock-based compensation plans, or that we issue additional shares of capital stock in the future, there will be further dilution to investors participating in this offering. If all outstanding options under our 2009 Plan and 2019 Plan as of September 26, 2021 were exercised then our existing stockholders, including the holders of these options, would own approximately 90%, and our new investors would own approximately 10%, of the total number of shares of our capital stock outstanding following the completion of this offering.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth our selected consolidated financial and other data. The selected consolidated statements of operations data for the years ended December 27, 2020 and December 29, 2019 and the selected consolidated balance sheet data as of December 27, 2020 and December 29, 2019 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected statements of operations data for the thirteen and thirty-nine weeks ended September 26, 2021 and September 27, 2020 and the selected balance sheet data as of September 26, 2021 have been derived from our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. The unaudited interim condensed consolidated financial statements were prepared on a basis consistent with our audited financial statements and include, in management’s opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of the financial information set forth in those statements. The selected consolidated statements of operations data for the years ended December 30, 2018, December 31, 2017, December 25, 2016, December 27, 2015, and December 28, 2014 have been derived from our consolidated financial statements that are not included in this prospectus. Our historical results are not necessarily indicative of the results that may be expected for any period in the future and our interim results are not necessarily indicative of our expected results for the year ending December 26, 2021 or any other period. You should read the following selected financial and other data together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus. The selected financial data included in this section are not intended to replace the financial statements and are qualified in their entirety by our consolidated financial statements and the related notes included elsewhere in this prospectus.

	Fiscal Year Ended																					Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	Dec. 27, 2020			Dec. 29, 2019			Dec. 30, 2018			Dec. 31, 2017			Dec. 25, 2016			Dec. 27, 2015			Dec. 28, 2014			Sept. 26, 2021			Sept. 27, 2020			Sept. 26, 2021			Sept. 27, 2020
																									(unaudited)
	(in thousands)
Consolidated Statements of Operations Data:
Revenue	$	220,615		$	274,151		$	220,494		$	170,500		$	113,208		$	62,284		$	42,107		$	95,844		$	55,549		$	243,448		$	161,435
Restaurant operating costs (exclusive of depreciation and amortization presented separately below):
Food, beverage and packaging		66,154			83,966			66,088			55,227			36,625			20,221			13,628			26,701			16,939			67,125			48,857
Labor and related expenses		83,691			86,547			65,373			53,276			34,494			17,382			11,854			30,316			22,727			79,343			61,348
Occupancy and related expenses		43,775			37,050			32,334			24,159			14,781			7,854			5,388			14,053			11,301			35,919			32,268
Other restaurant operating costs		35,697			22,613			16,617			13,677			10,488			5,567			3,246			11,640			9,288			33,001			25,306
Total restaurant operating costs		229,317			230,176			180,412			146,339			96,388			51,024			34,116			82,710			60,255			215,388			167,779
Operating expenses:
General and administrative		99,142			88,818			49,585			39,072			24,979			17,616			9,179			28,944			23,335			78,395			72,168
Depreciation and amortization		26,851			19,416			16,775			12,194			6,635			4,123			2,500			9,303			6,624			25,558			18,831
Pre-opening costs		4,551			5,405			1,839			4,612			6,214			2,499			737			2,789			1,741			6,256			3,592
Impairment of long-lived assets		1,456			-			-			-			-			115			239			4,415			-			4,415			-
Loss on disposal of property and equipment		891			409			313			387			271			197			41			-			441			56			586
Total operating expenses		132,891			114,048			68,512			56,265			38,099			24,550			12,696			45,451			32,141			114,680			95,177
Loss from operations		(141,593	)		(70,073	)		(28,430	)		(32,104	)		(21,279	)		(13,290	)		(4,705	)		(32,317	)		(36,847	)		(86,620	)		(101,521	)
Interest income		(1,018	)		(2,724	)		(500	)		(32	)		(77	)		(85	)		(48	)		(78	)		(128	)		(299	)		(940	)
Interest expense		404			88			3,200			976			18			111			176			23			140			65			306
Other expense		245			480			-			-			-			-			111			(2,196	)		-			608			(731	)
Net loss before income taxes		(141,224	)		(67,917	)		(31,130	)		(33,048	)		(21,220	)		(13,316	)		(4,944	)		(30,066	)		(36,859	)		(86,994	)		(100,156	)
Income tax provision		-			-			-			-			-			-			-			-			-			-			-
Net loss	$	(141,224	)	$	(67,917	)	$	(31,130	)	$	(33,048	)	$	(21,220	)	$	(13,316	)	$	(4,944	)	$	(30,066	)	$	(36,859	)	$	(86,994	)	$	(100,156	)

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	As of						As of
	Dec. 27, 2020			Dec. 29, 2019			Sept. 26, 2021
							(unaudited)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	102,640		$	249,257		$	137,031
Working capital(1)		79,541			228,664			113,581
Total assets		265,683			386,420			406,000
Total liabilities		67,407			53,977			118,721
Preferred stock		505,638			505,638			614,496
Total stockholders’ (deficit)		(307,362	)		(173,195	)		(327,217	)

(1) Working capital is defined as current assets less current liabilities. See our consolidated financial statements and the related notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities.

	Fiscal Year Ended																					Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	Dec. 27, 2020			Dec. 29, 2019			Dec. 30, 2018			Dec. 31, 2017			Dec. 25, 2016			Dec. 27, 2015			Dec. 28, 2014			Sept. 26, 2021			Sept. 27, 2020			Sept. 26, 2021			Sept. 27, 2020
	(dollar amounts in thousands)
Other Financial Data:
Restaurant-Level Profit(1)	$	(8,702	)	$	43,975		$	40,082		$	24,161		$	16,820		$	11,260		$	7,991		$	13,134		$	(4,706	)	$	28,060		$	(6,344	)
Restaurant-Level Profit Margin (%)(1)		(4%	)		16	%		18	%		14	%		15	%		18	%		19	%		14	%		(8%	)		12	%		(4%	)
Adjusted EBITDA(1)	$	(107,483	)	$	(46,344	)	$	(7,500	)	$	(18,371	)	$	(13,436	)	$	(8,222	)	$	(1,543	)	$	(14,085	)	$	(28,408	)	$	(48,928	)	$	(78,472	)
Adjusted EBITDA Margin (%)(1)		(49%	)		(17%	)		(3%	)		(11%	)		(12%	)		(13%	)		(4%	)		(15%	)		(51%	)		(20%	)		(49%	)

(1) Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin are financial measures that are not calculated in accordance with GAAP. See “—Non-GAAP Financial Measures” below for more information, including the limitations of such measures, and a reconciliation of each of these measures to the most directly comparable financial measure stated in accordance with GAAP.

Non-GAAP Financial Measures

In addition to our consolidated financial statements, which are presented in accordance with GAAP, we present certain non-GAAP financial measures, including Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin. We believe these measures are useful to investors and others in evaluating our performance because these measures:

• facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or NOL), and the age and book depreciation of facilities and equipment (affecting relative depreciation expense);

• are widely used by analysts, investors, and competitors to measure a company’s operating performance; are used by our management and board of directors for various purposes, including as measures of performance, as a basis for strategic planning and forecasting; and

• are used internally for a number of benchmarks including to compare our performance to that of our competitors.

We define Restaurant-Level Profit as income (loss) from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, impairment of long-lived

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assets, and loss on disposal of property and equipment. Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue. As it excludes general and administrative expense, which is primarily attributable to our sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.

We define Adjusted EBITDA as net loss adjusted to exclude interest income, interest expense, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation expense, loss (gain) on disposal of property and equipment, impairment of long-lived assets, Spyce acquisition costs, and other expense. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.

Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, Restaurant-Level Profit and Adjusted EBITDA should not be viewed as substitutes for, or superior to, loss from operations or net loss prepared in accordance with GAAP as a measure of profitability. Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Restaurant-Level Profit and Adjusted EBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• Restaurant-Level Profit and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

• Restaurant-Level Profit and Adjusted EBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;

• Restaurant-Level Profit and Adjusted EBITDA do not consider the potentially dilutive impact of stock-based compensation;

• Restaurant-Level Profit is not indicative of overall results of the Company and does not accrue directly to the benefit of stockholders, as corporate-level expenses are excluded;

• Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as stock-based compensation, loss on disposal of property and equipment, impairment of long-lived assets, Spyce acquisition costs, and certain other expenses; and

• other companies, including those in our industry, may calculate Restaurant-Level Profit and Adjusted EBITDA differently, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, loss from operations, net loss, and our other GAAP results.

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The following table sets forth a reconciliation of our loss from operations to Restaurant-Level Profit, as well as the calculation of loss from operations margin and Restaurant-Level Profit Margin for each of the periods indicated:

	Fiscal Year Ended
	December 27, 2020			December 29, 2019			December 30, 2018			December 31, 2017			December 25, 2016			December 27, 2015			December 28, 2014
	(dollar amounts in thousands)
Loss from operations	$	(141,593	)	$	(70,073	)	$	(28,430	)	$	(32,104	)	$	(21,279	)	$	(13,290	)	$	(4,705	)
Add back:
General and administrative		99,142			88,818			49,585			39,072			24,979			17,616			9,179
Depreciation and amortization		26,851			19,416			16,775			12,194			6,635			4,123			2,500
Pre-opening costs		4,551			5,405			1,839			4,612			6,214			2,499			737
Impairment of long-lived assets		1,456			-			-			-			-			115			239
Loss on disposal of property and equipment		891			409			313			387			271			196			41
Restaurant-Level Profit	$	(8,702	)	$	43,975		$	40,082		$	24,161		$	16,820		$	11,260		$	7,991
Loss from operations margin		(64	%)		(26	%)		(13	%)		(19	%)		(19	%)		(21	%)		(11	%)
Restaurant-Level Profit Margin		(4	%)		16	%		18	%		14	%		15	%		18	%		19	%

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	September 26, 2021			September 27, 2020			September 26, 2021			September 27, 2020
	(dollar amounts in thousands)
Loss from operations	$	(32,317	)	$	(36,847	)	$	(86,620	)	$	(101,521	)
Add back:
General and administrative		28,944			23,335			78,395			72,168
Depreciation and amortization		9,303			6,624			25,558			18,831
Pre-opening costs		2,789			1,741			6,256			3,592
Impairment of long-lived assets		4,415			-			4,415			-
Loss on disposal of property and equipment		-			441			56			586
Restaurant-Level Profit	$	13,134		$	(4,706	)	$	28,060		$	(6,344	)
Loss from operations margin		(34	%)		(66	%)		(36	%)		(63	%)
Restaurant-Level Profit Margin		14	%		(8	%)		12	%		(4	%)

The following table sets forth a reconciliation of our net loss to Adjusted EBITDA, as well as the calculation of net loss margin and Adjusted EBITDA Margin for each of the periods indicated:

	Fiscal Year Ended
	December 27, 2020			December 29, 2019			December 30, 2018			December 31, 2017			December 25, 2016			December 27, 2015			December 28, 2014
	(dollar amounts in thousands)
Net loss	$	(141,224	)	$	(67,917	)	$	(31,130	)	$	(33,048	)	$	(21,220	)	$	(13,316	)	$	(4,945	)
Non-GAAP adjustments:
Interest income		(1,018	)		(2,724	)		(500	)		(32	)		(77	)		(85	)		(48	)
Interest expense		404			88			3,200			976			18			111			176
Depreciation and amortization		26,851			19,416			16,775			12,194			6,635			4,123			2,500
Stock-based compensation(1)		4,912			3,904			3,842			1,152			937			633			382
Loss on disposal of property and equipment(2)		891			409			313			387			271			197			41
Impairment of long-lived assets(3)		1,456			-			-			-			-			115			239

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	Fiscal Year Ended
	December 27, 2020			December 29, 2019			December 30, 2018			December 31, 2017			December 25, 2016			December 27, 2015			December 28, 2014
		(dollar amounts in thousands)
Other expense(4)		245			480			-			-			-			-			111
Adjusted EBITDA	$	(107,483	)	$	(46,344	)	$	(7,500	)	$	(18,371	)	$	(13,436	)	$	(8,222	)	$	(1,543	)
Net loss margin		(64	%)		(25	%)		(14	%)		(19	%)		(19	%)		(21	%)		(12	%)
Adjusted EBITDA Margin		(49	%)		(17	%)		(3	%)		(11	%)		(12	%)		(13	%)		(4	%)

(1) Includes non-cash, stock-based compensation.

(2) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.

(3) Includes costs related to impairment of long-lived assets. Based on our review of long-lived assets for impairment, we recorded a non-cash impairment charges of $1.5 million for fiscal year 2020.

(4) Other expense includes the change in fair value of the warrant liability. See Notes 1 and 3 to our audited consolidated financial statements included elsewhere in this prospectus for further details.

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	September 26, 2021			September 27, 2020			September 26, 2021			September 27, 2020
	(dollar amounts in thousands)
Net loss	$	(30,066)		$	(36,859	)	$	(86,994)		$	(100,156	)
Non-GAAP adjustments:
Interest income		(78	)		(128	)		(299	)		(940	)
Interest expense		23			140			65			306
Depreciation and amortization		9,303			6,624			25,558			18,831
Stock-based compensation(1)		3,008			1,374			6,104			3,632
Loss on disposal of property and equipment(2)		-			441			56			586
Impairment of long-lived assets(3)		4,415			-			4,415			-
Other (income) expense(4)		(2,196	)		-			608			(731	)
Spyce acquisition costs(5)		1,506			-			1,559			-
Adjusted EBITDA	$	(14,085	)	$	(28,408	)	$	(48,928	)	$	(78,472	)
Net loss margin		(31	%)		(66	%)		(36	%)		(62	%)
Adjusted EBITDA Margin		(15	%)		(51	%)		(20	%)		(49	%)

(1) Includes non-cash, stock-based compensation.

(2) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.

(3) Includes costs related to impairment of long-lived assets. Based on our review of long-lived assets for impairment, we recorded a non-cash impairment charges of $4.4 million for the thirty-nine weeks ended September 26, 2021.

(4) Other expense includes the change in fair value of the warrant liability. See Notes 1 and 3 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus for further details.

(5) Spyce acquisition costs include one-time costs we incurred in order to acquire Spyce, including severance payments, retention bonuses, and valuation and legal expenses. See Note 6 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus for further details.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes that are included elsewhere in this prospectus. This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the sections titled “Risk Factors” and “Special Note Regarding Forward- Looking Statements” and in other parts of this prospectus. Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” or “sweetgreen” refer to Sweetgreen, Inc. and its subsidiaries.

Our fiscal year is a 52- or 53-week period that ends on the Sunday closest to the last day of December. Fiscal year 2020 was a 52-week period that ended December 27, 2020, and fiscal year 2019 was a 52-week period that ended December 29, 2019. In a 52-week fiscal year, each fiscal quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second, and third fiscal quarters each include 13 weeks of operations, and the fourth fiscal quarter includes 14 weeks of operations.

2020 and 2021 results for AUV and Same-Store Sales Change have been adjusted. See the subsections titled “—Key Performance Metrics” and “—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, AUV and Same-Store Sales Change for the periods presented.

Overview

We are building the next generation restaurant and lifestyle brand that serves healthy food at scale. Our core values guide our actions and we aim to empower our customers, team members, and partners to be a positive force on the food system. sweetgreen is one of the fastest-growing restaurant companies in the United States by revenue.

Over the last 15 years, we have been leading a movement to re-imagine fast food for a new era. There is a powerful shift happening in consumer behavior. Every day, more people want to eat healthier food and care about the impact their choices have on the environment. This is becoming the new normal, and we believe sweetgreen is well positioned to be a category-defining food brand for the future.

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As of September 26, 2021, we owned and operated 140 restaurants in 13 states and Washington, D.C., and employed over 5,000 team members. We grew our restaurant count from 29 restaurants as of the end of fiscal year 2014 to 119 restaurants as of the end of fiscal year 2020, representing a 27% compound annual growth rate (“CAGR”). Our AUV also expanded from $1.6 million as of the end of fiscal year 2014 to $3.0 million as of the end of fiscal year 2019, representing a 12% CAGR. In parallel, our revenue also grew from $42 million to $274 million between fiscal year 2014 and fiscal year 2019, representing a 46% CAGR. In fiscal year 2020, our AUV declined 26% to $2.2 million and our revenue fell 20% to $221 million, primarily due to business disruptions associated with the COVID-19 pandemic and ongoing social unrest.

For our fiscal year to date through September 26, 2021, we experienced positive momentum across all of our channels, as COVID-19 vaccines became widely available and customers started to return to offices, resulting in AUV of $2.5 million as of September 26, 2021. While we continued to see an increase in revenue in each completed fiscal quarter of 2021, as the Delta variant spread widely in the third fiscal quarter of 2021, our positive momentum slowed, as many jurisdictions imposed new or more stringent mask and vaccination mandates and many employers and employees have delayed their returns to offices. Our Same-Store Sales Change increased to 43% for the thirteen weeks ended September 26, 2021 compared to (34%) for the thirteen weeks ended September 27, 2020, and to 21% for our fiscal year to date through September 26, 2021 compared to (26%) for our fiscal year to date through September 27, 2020. Additionally, our revenue for the thirteen weeks ended September 26, 2021 increased to $95.8 million, a 73% increase from the $55.5 million for the thirteen weeks ended September 27, 2020, and our revenue for our fiscal year to date through September 26, 2021 increased to $243.4 million, a 51% increase from the $161.4 million for our fiscal year to date through September 27, 2020. Our revenue for the fifty-two weeks ended September 26, 2021 was $303 million.

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We reported a (26%) loss from operations margin for fiscal year 2019, which increased to (64%) for fiscal year 2020, and our loss from operations increased from $(70) million in fiscal year 2019 to $(142) million in fiscal year 2020. Our loss from operations margin improved to (34%) and (36%) for the thirteen weeks ended and our fiscal year to date through September 26, 2021, respectively, driven by loss from operations of $(32) million and $(87) million, respectively, for the corresponding periods. This was an increase from (66%) and (63%) for the thirteen weeks ended and our fiscal year to date through September 27, 2020, respectively, driven by loss from operations of $(37) million and $(102) million, respectively, for the corresponding periods.

We believe we have demonstrated strong unit economics during our sustained rapid growth from fiscal year 2014 to fiscal year 2019. We reported a 16% Restaurant-Level Profit Margin for fiscal year 2019, in addition to a $3.0 million AUV as of the end of fiscal year 2019. Our fiscal year 2020 AUV was negatively impacted by the COVID-19 pandemic and civil disturbances. In parallel, our Restaurant-Level Profit Margin declined in fiscal year 2020 to (4%) as we implemented numerous measures in our restaurants to protect the health and safety of our customers and team members, and provided voluntary COVID-19-related paid leave and temporary salary increases to our team members. As a result, our Restaurant-Level Profit fell to $(9) million in fiscal year 2020 from $44 million for fiscal year 2019. Driven by Restaurant-Level Profit of $13 million and $28 million for the thirteen weeks ended and our fiscal year to date through September 26, 2021, respectively, our Restaurant-Level Profit Margin improved to 14% and 12%, respectively, for the corresponding periods. This was an increase from our Restaurant-Level Profit Margin of (8%) and (4%) for the thirteen weeks ended and our fiscal year to date through September 27, 2020, respectively, driven by Restaurant-Level Profit of $(5) million and $(6) million, respectively, for the corresponding periods.

Additionally, we had average year two Cash-on-Cash Returns for our restaurants opened from 2014 through 2017 of 40%. Year two Cash-on-Cash Returns for restaurants opened in 2018 were 25%, which is a result of the significant impact of the COVID-19 pandemic on performance in 2020, and as a result, we believe are not representative of our historical or targeted future performance. We are confident that our compelling restaurant-level economics will continue to work across geographies and market types. We plan to target:

• Year two Cash-on-Cash Returns of 42% to 50%;

• AUV of $2.8 million to $3.0 million;

• Restaurant-Level Profit Margins of 18% to 20%; and

• An average investment of approximately $1.2 million per new restaurant.

We also believe we have significantly enhanced the productivity of our restaurants by supporting multiple channels so that we can meet our customers where they are. Sales through our Owned Digital

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Channels contributed 43% and 56% of our fiscal year 2019 and fiscal year 2020 revenue, respectively. When including orders placed on our Marketplace Channel, this digital share increases to 50% and 75% of our fiscal year 2019 and fiscal year 2020 revenue, respectively. For our fiscal year to date through September 26, 2021, our digital share has remained strong, with a Total Digital Revenue Percentage of 68% and an Owned Digital Revenue Percentage of 47%, even as revenue from our In-Store Channel improved.

Our goal is to be capital efficient, profitable, and sustainable at scale.

To date, we have not achieved profitability in any fiscal period, in large part because we have consciously invested in our operating and technology foundation. We believe this foundation has positioned us to achieve the above growth strategies, while also implementing restaurant-level efficiencies (such as enhanced labor management, automation and optimal store layouts) and economies of scale in our supply chain. We expect strategic investments in these key areas to result in strong AUV growth and an expansion of our Restaurant-Level Profit Margin.

As we accelerate our growth in the coming years, we expect to be able to do so efficiently, without significantly increasing our general and administrative costs. We are confident that this will enable topline growth and operational leverage, resulting in improved Adjusted EBITDA Margins.

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Factors Affecting Our Business

Expanding Restaurant Footprint

Opening new restaurants is an important driver of our revenue growth. In 2020, we had 15 Net New Restaurant Openings, and for our fiscal year to date through September 26, 2021, we had 21 Net New Restaurant Openings, bringing our total count as of September 26, 2021 to 140 restaurants in 13 states and Washington, D.C.

We are still in the very nascent stages of our journey, and one of our greatest immediate opportunities is to grow our footprint in both existing and new U.S. markets and, over time, internationally. From the end of fiscal year 2014 through the end of fiscal year 2020, we had 90 Net New Restaurant Openings and no permanent performance-related restaurant closures. We plan to open at least 30 domestic, company-owned restaurants in 2021 and to approximately double our current footprint of restaurants over the next three to five years.

Real Estate Selection

We utilize a rigorous, data-driven real estate selection process to identify new restaurant sites with both high anticipated foot traffic and proximity to workplaces and residences that support our multi-channel approach.

As we have opened new restaurants in the same geographic market, we have not historically experienced cannibalization of our existing restaurants. In the markets in which we operated at the beginning of fiscal year 2014, we more than tripled our restaurant count from fiscal year 2014 to fiscal year 2019, and in parallel our AUV grew in those markets by approximately 85% over the same period. Although we continued to open new restaurants in those markets in fiscal year 2020, AUV in those markets decreased from fiscal year 2019 by 36% as a result of the impact of the COVID-19 pandemic.

Macroeconomic Conditions

Consumer spending on food outside the home fluctuates with macroeconomic conditions. Consumers tend to allocate higher spending to food outside the home when macroeconomic conditions are stronger, and rationalize spending on food outside the home during weaker economies. As a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods. Throughout our 15-year history,

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our customers have demonstrated a willingness to pay a premium for a craveable, convenient, and healthier alternative to traditional fast-food and fast-casual offerings.

While we have been able to partially offset inflation and other increases, such as wage increases, in the costs of core operating resources by gradually increasing menu prices, coupled with more efficient purchasing practices, productivity improvements, and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future. In particular, macroeconomic conditions could make additional menu price increases imprudent. There can be no assurance that future cost increases can be offset by increased menu prices or that increased menu prices will be fully absorbed by our customers without any resulting change to their visit frequencies or purchasing patterns.

Seasonality

Our revenue fluctuates as a result of seasonal factors. Historically, our revenue is lower in the first and fourth quarters of the year due, in part, to the holiday season and the fact that fewer people eat out during periods of inclement weather (the winter months) than during periods of mild to warm weather (the spring, summer, and fall months). In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months.

Sales Channel Mix

Our revenue is derived from sales of food and beverage to customers through our five sales channels. There have been historical fluctuations in the mix of sales between our various channels. For example, during the COVID-19 pandemic, we have experienced a significant increased percentage of sales through our Owned Digital and Marketplace Channels. Due to the fact that our Native Delivery, Outpost, and Marketplace Channels require the payment of third-party fees in order to fulfill deliveries, sales through these channels have historically negatively impacted our margins. Additionally, historically, orders on our Native Delivery, Outpost and Marketplace Channels have resulted in a higher rate of refunds and credits than our In-Store and Pick-Up Channels, which has a negative impact on revenue on these channels. We have also historically prioritized promotions and discounts on our Owned Digital Channels, which also reduces revenue on these channels. If we continue to see a more permanent shift in sales through these channels, our margins may continue to decrease. In fiscal years 2019 and 2020, and the thirty-nine weeks ended September 26, 2021, our third-party delivery fees for our Native Delivery Channel, which are based on a combination of a flat fee per order and a percentage commission on each order, were a total of $8,000 (as our Native Delivery Channel was in a pilot phase), $7.4 million, and $7.2 million, respectively, and our third-party delivery fees for our Marketplace Channel, which are based on a percentage commission on each order, were a total of $1.7 million, $4.5 million, and $6.2 million, respectively. However, over time, we expect that as we scale our Native Delivery, Outpost, and Marketplace Channels, we will be successful in negotiating lower third-party delivery fees, and our relative margins will improve. As a result of higher third-party delivery fees for our Native Delivery Channel and significant delivery fee promotions offered to customers in the first year after we launched our Native Delivery Channel, our margins from sales through our Native Delivery Channel in fiscal year 2020 and the thirty-nine weeks ended September 26, 2021 were lower than margins from sales through our Marketplace Channel. However, we have negotiated lower third party delivery fees for our Native Delivery Channel on a fixed fee per order basis based on the geographic market and mileage for each order (such fees to take effect beginning in the fourth fiscal quarter of 2021), and, combined with the reduction of delivery fee promotions, we expect our margins from sales through our Native Delivery Channel to improve significantly in the future.

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The COVID-19 Pandemic

As a result of the COVID-19 pandemic in the United States, many jurisdictions implemented measures to combat the COVID-19 outbreak, including travel bans, shelter-in-place orders, and restrictions on restaurant operations. We took several actions in fiscal year 2020 in response to these measures, including: reducing the operations of our restaurants, including shifting to a digital pick-up and delivery operating model in many locations and temporarily closing certain sweetgreen locations as needed; deferring rent payments on the majority of our leased properties for the months of April, May and June; undergoing a cost restructuring plan that included a temporary furlough of approximately 2,000 of our restaurant employees for up to 90 days and terminating approximately 100 employees at our sweetgreen Support Center; implementing strict sanitation and safety standards across our restaurants to protect our customers and team members; and providing up to 14 days of voluntary paid wellness leave for COVID-19-related circumstances for our team members as well as $1 per hour of supplemental “Hero Pay” during the summer.

The COVID-19 pandemic had a significant impact on our results of operations for fiscal years 2020 and 2021 and the interim periods presented. In particular, our In-Store and Outpost Channels have been materially and adversely impacted due to shelter-in-place orders, legal and health restrictions on businesses and gatherings, and the decline in foot traffic and lower office occupancy, particularly in large urban centers like New York City. In addition, in certain locations, we had temporary restaurant closures due to other factors such as civil disturbances and inclement weather. This negative impact was partially offset by a surge in activity across our Owned Digital and Marketplace Channels, which contributed 56% and 18%, respectively, of our revenue in fiscal year 2020 compared to 43% and 7%, respectively, of our revenue in fiscal year 2019. In part due to the strength of our multiple digital channels, we were able to maintain over 80% of our fiscal year 2019 revenue in fiscal year 2020. In the thirty-nine weeks ended September 26, 2021, our digital share has remained strong, with a Total Digital Revenue Percentage of 68% and an Owned Digital Revenue Percentage of 47%, even as revenue from our In-Store Channel improved. We expect that many of our customers that converted to transacting via our Owned Digital Channels during this period will continue this behavior going forward as we believe our Owned Digital Channels provide the best ordering experience for our customers.

We have entered into agreements with certain landlords with respect to a majority of our leased properties affected by the rent deferrals. We recorded $5.1 million of rent deferrals within accrued expenses in fiscal year 2020. Rent abatements are recorded within general and administrative expenses within the consolidated statement of operations and our recognition of rent abatements did not have a material impact on our consolidated financial statements for fiscal year 2020. We are continuing to negotiate with certain of our landlords for rent concessions and abatements, but we do not expect any future negotiated deferrals or abatements to have a material impact on our consolidated financial results. We did not permanently close any restaurants in response to the COVID-19 pandemic, and as of December 27, 2020 all of our restaurants had reopened. We also had 15 Net New Restaurant Openings across existing and new markets during 2020 and 21 Net New Restaurant Openings across existing and new markets in the thirty-nine weeks ended September 26, 2021.

Due to the rapid development and fluidity of this situation, we cannot determine the ultimate impact that the COVID-19 pandemic will have on our consolidated financial condition, liquidity, and future results of operations. Please see the section titled “Risk Factors” for more information regarding risks associated with the COVID-19 pandemic.

For our fiscal year to date through September 26, 2021, we experienced positive momentum across all of our channels, as COVID-19 vaccines became widely available and customers started to return to offices. While we continued to see an increase in revenue in each completed fiscal quarter of 2021, as the Delta variant spread widely in the third fiscal quarter of 2021, our positive momentum

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slowed, as many jurisdictions imposed new or more stringent mask and vaccination mandates and many employers and employees have delayed their returns to offices. This had a negative impact on our assumptions for future near-term restaurant-level cash flows and results of operations. Employer vaccination mandates and vaccination mandates for restaurants operating indoor dining that are currently in effect or contemplated in the markets in which we operate, including New York City, Los Angeles and San Francisco, may require us to make significant changes to how we operate, increase our costs, and adversely affect our business, financial condition, and results of operations for the remainder of fiscal year 2021 and beyond.

Key Performance Metrics

We track the following key business metrics and non-GAAP financial measures to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions. We believe that these key business metrics, which includes certain non-GAAP financial measures, provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled metrics or measures presented by other companies. See the section titled “Selected Consolidated Financial and Other Data—Non-GAAP Financial Measures” for a reconciliation of Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable financial measures stated in accordance with GAAP.

	Fiscal Year Ended				Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(dollar amounts in thousands)	December 27, 2020		December 29, 2019		September 26, 2021		September 27, 2020		September 26, 2021		September 27, 2020
Net New Restaurant Openings		15		15		11		7		21		11
Average Unit Volume (as adjusted)(1)	$	2,194	$	2,967	$	2,459	$	2,313	$	2,459	$	2,313
Same-Store Sales Change (as adjusted) (%)(2)		(26%)		15%		43%		(34%)		21%		(26%)
Restaurant-Level Profit	$	(8,702)	$	43,975	$	13,134	$	(4,706)	$	28,060	$	(6,344)
Restaurant-Level Profit Margin (%)		(4%)		16%		14%		(8%)		12%		(4%)
Adjusted EBITDA	$	(107,483)	$	(46,344)	$	(14,085)	$	(28,408)	$	(48,928)	$	(78,472)
Adjusted EBITDA Margin (%)		(49%)		(17%)		(15%)		(51%)		(20%)		(49%)
Total Digital Revenue Percentage		75%		50%		63%		79%		68%		74%
Owned Digital Revenue Percentage		56%		43%		43%		58%		47%		57%

(1) Our results for the fiscal year ended December 27, 2020 have been adjusted to reflect the material, temporary closures of 19 restaurants in the second and third fiscal quarters of fiscal year 2020 due to the COVID-19 pandemic by excluding such restaurants from the Comparable Restaurant Base. Without these adjustments, AUV would have been $2.0 million as of December 27, 2020.

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(2) Our results for all periods presented other than the fiscal year ended December 29, 2019 have been adjusted to reflect the temporary closures of 19 restaurants in the second and third fiscal quarters of fiscal year 2020 due to the COVID-19 pandemic and the temporary closures of 56 restaurants due to civil disturbances that occurred during one week in the second fiscal quarter of fiscal year 2020. With respect to the 56 temporary closures due to civil disturbances, because excluding an entire fiscal month for these restaurants, which represented a significant portion of our restaurant fleet, would result in a Same-Store Sales Change figure that is not representative of our business as a whole, we excluded only one week from the calculation of Same-Store Sales Change for these restaurants. Therefore, Same-Store Sales Change for the fiscal year ended December 27, 2020 and the interim periods presented in fiscal years 2020 and 2021 is not comparable to prior periods. Without these adjustments, Same-Store Sales Change would have been (32%) for the fiscal year ended December 27, 2020, 48% and (37%) for the thirteen weeks ended September 26, 2021 and September 27, 2020, respectively, and 27% and (34%) for the thirty-nine weeks ended September 26, 2021 and September 27, 2020, respectively.

Net New Restaurant Openings

Net New Restaurant Openings reflect the number of new sweetgreen restaurant openings during a given reporting period, net of any permanent sweetgreen restaurant closures during the same given period. Before we open new restaurants, we incur pre-opening costs, as further described below.

Average Unit Volume

AUV is defined as the average trailing revenue for the prior four fiscal quarters for all restaurants in the Comparable Restaurant Base. The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our restaurants. Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement period, other than any restaurants that had a material, temporary closure during the relevant measurement period. As a result of material, temporary closures in the second and third fiscal quarters of fiscal year 2020 due to the COVID-19 pandemic, 19 restaurants were excluded from our Comparable Restaurant Base as of the end of (i) the second and third fiscal quarters of fiscal year 2020, (ii) fiscal year 2020, and (iii) the first and second fiscal quarters of fiscal year 2021. No restaurants were excluded from the Comparable Restaurant Base in fiscal year 2019 or in the third fiscal quarter of fiscal year 2021.

Same-Store Sales Change

Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period; provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant. As a result of temporary closures of 19 restaurants due to the COVID-19 pandemic during the second and third fiscal quarters of fiscal year 2020, Same-Store Sales Change has been adjusted for (i) fiscal year and (ii) all interim periods in fiscal years 2020 and 2021 (other than the thirteen weeks ended March 29, 2020, the thirteen weeks ended December 28, 2020, and the thirteen weeks ended March 28, 2021). Additionally, as a result of temporary closures of 56 restaurants due to civil disturbances that occurred during one week in the second fiscal quarter of fiscal year 2020 we excluded only one week from the calculation of Same-Store Sales Change for the impacted periods (and we excluded the corresponding week from the corresponding fiscal periods in the prior fiscal year). This is because excluding an entire fiscal month for these restaurants which represented a significant portion of our restaurant fleet, would result in a Same-Store Sales Change figure that is not representative of our business as a whole. This exclusion impacted the calculation of Same-Store Sales Change for these restaurants for (i) fiscal year 2020 and (ii) the thirteen weeks ended June 28, 2020, the thirteen weeks ended June 27, 2021, the thirty-nine weeks ended September 27, 2020, and the thirty-nine weeks ended September 26, 2021. Therefore, Same-Store Sales Change for fiscal year 2020 and certain of the interim periods presented in fiscal years 2020 and 2021 is not comparable to prior financial periods. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and closures.

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Restaurant-Level Profit and Restaurant-Level Profit Margin

We define Restaurant-Level Profit as income (loss) from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, impairment of long-lived assets, and loss on disposal of property and equipment. Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue.

As it excludes general and administrative expense, which is primarily attributable to our sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA as net loss adjusted to exclude interest income, interest expense, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation expense, loss (gain) on disposal of property and equipment, impairment of long-lived assets, Spyce acquisition costs, and other expense. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.

Total Digital Revenue Percentage and Owned Digital Revenue Percentage

Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Total Digital Channels. Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels.

Components of Results of Operations

Revenue

We recognize food and beverage revenue, net of discounts and incentives, when payment is tendered at the point of sale as the performance obligation has been satisfied, through our three disaggregated revenue channels: Owned Digital Channels, In-Store-Channel (Non-Digital component), and Marketplace Channel. Provisions for discounts are provided for in the same period the related sales are recorded. Sales taxes and other taxes collected from customers and remitted to governmental authorities are presented on a net basis, and as such, are excluded from revenue. We expect revenue to increase as we focus on opening additional restaurants, as well as investments in our Owned Digital Channels to attract new customers and increase order frequency in our existing customers.

Gift Cards.    We also sell gift cards that do not have an expiration date. Upon sale, gift cards are recorded as unearned revenue and included within gift card liability in the accompanying consolidated balance sheets. The revenue from gift cards is recognized when redeemed by customers. Because we do not track addresses of gift card purchasers, the relevant jurisdiction related to the requirement for escheatment, the legal obligation to remit unclaimed assets to the state, is our state of incorporation, which is Delaware. The state of Delaware requires escheatment after five years from issuance. We do not recognize breakage income because of our requirements to escheat unredeemed gift card balances.

Sweetgreen Rewards.    Through the first quarter of 2021, we had a loyalty program whereby customers accumulate loyalty rewards for digital purchases made through our Owned Digital Channels. Previously, a sweetgreen rewards customer had 120 days to accumulate the necessary amount of purchases for a reward, and the reward expired after 120 days. During the first quarter of 2020, we changed our redemption policy such that a customer now had 30 days to accumulate the necessary amount of purchases for a reward and the reward expires after 30 days. The loyalty points represent a material right. We defer revenue associated with the relative estimated standalone selling price of the loyalty points, which is estimated as the value of the loyalty reward, net of loyalty related purchases not expected to be redeemed. We estimate loyalty purchases not expected to be redeemed

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based on historical company-specific data. Revenue is recognized when the reward is redeemed or expires. In the first quarter of 2021, we ended our loyalty program.

Delivery.    All of our restaurant locations offer a delivery option. Delivery services are fulfilled by third-party service providers whether delivery is ordered through our Native Delivery Channel or Marketplace Channel. With respect to Native Delivery Channel sales, we control the delivery services and recognize revenue, including delivery revenue, when the delivery partner transfers food or beverage to the customer. For these sales, we receive payment directly from the customer at the time of sale. With respect to Marketplace Channel sales, we recognize revenue, excluding delivery fees collected by the delivery partner as we do not control the delivery service, when control of the food or beverage is delivered to the end customer. We receive payment from the delivery partner subsequent to the transfer of food and the payment terms are short-term in nature. For all delivery sales, we are considered the principal and recognize the revenue on a gross basis. Although our margins from sales through our Native Delivery Channel in fiscal year 2020 and the thirteen and thirty-nine weeks ended September 26, 2021 were lower than margins from sales through our Marketplace Channel, we expect our margins from sales through our Native Delivery Channel to improve significantly in the future. For a more detailed discussion of our third-party delivery fees and our expectations regarding our margins, see the section titled “—Sales Channel Mix” above.

Restaurant Operating Costs, Exclusive of Depreciation and Amortization

Food, Beverage, and Packaging

Food, beverage, and packaging costs include the direct costs associated with food, beverage, and packaging of our menu items. We anticipate food, beverage and packaging costs on an absolute dollar basis will increase for the foreseeable future to the extent we experience additional in-store orders as restrictions related to the COVID-19 pandemic ease, as we open additional restaurants, and as a result our revenue grows. However, food, beverage, and packaging costs as a percentage of revenue may vary, as these costs are impacted by menu mix and fluctuations in commodity costs, as well as geographic scale and proximity.

Labor and Related Expenses

Labor and related expenses include salaries, benefits, payroll taxes, workers compensation expenses, and other expenses related to our restaurant employees. As with other variable expense items, we expect labor costs to grow as our revenue grows. Factors that influence labor costs include minimum wage and payroll tax legislation, health care costs, and size and location of our restaurants.

Occupancy and Related Expenses

Occupancy and related expenses consist of restaurant-level occupancy expenses (including rent, common area expenses and certain local taxes), maintenance and utilities, and exclude occupancy expenses associated with unopened restaurants, which are recorded separately in pre-opening costs. We anticipate occupancy and related expenses on an absolute dollar basis will increase for the foreseeable future to the extent we continue to open new restaurants and revenue grows. Occupancy and related expenses as a percentage of revenue are impacted by geographic location, type of restaurant build, and revenue increases.

Other Restaurant Operating Costs

Other restaurant operating costs include other operating expenses incidental to operating our restaurants, such as third-party delivery fees, non-perishable supplies, repairs and maintenance, restaurant-level marketing, credit card fees and property insurance. We expect that other restaurant operating costs will increase on an absolute dollar basis for the foreseeable future to the extent we

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continue to open new restaurants and our revenue grows. Other restaurant operating costs as a percentage of revenue are expected to increase in line with growth in our Native Delivery, Outpost, and Marketplace Channels, as these channels are impacted by third-party delivery fees. However, as revenue increases, we expect that other restaurant operating costs, such as repairs and maintenance and property insurance, as a percentage of revenue will decline.

Operating Expenses

General and Administrative

General and administrative expenses consist primarily of operations, finance, legal, human resources, administrative personnel, and other personnel costs that support restaurant development and operations, as well as stock-based compensation expense, brand-related marketing, and Spyce acquisition costs. We expect that general and administrative expenses will increase on an absolute dollar basis and vary from period to period as a percentage of revenue for the foreseeable future as we focus on processes, systems, and controls to enable our internal support functions to scale with the growth of our business. We expect to incur additional expenses as a result of operating as a public company, including expenses to comply with the rules and regulations applicable to companies listed on a national securities exchange, expenses related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general liability and director and officer insurance, investor relations, and professional services. While we expect that our general and administrative expenses will increase in absolute dollars as our business grows, as a percentage of revenue, we expect these expenses to vary from period to period and decrease over time.

Depreciation and Amortization

Depreciation and amortization include the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of external costs and certain internal costs directly associated with developing computer software applications for internal use. We expect that depreciation and amortization expenses will increase on an absolute dollar basis as we continue to build new restaurants and make investments in our digital platform.

Pre-Opening Costs

Pre-opening costs primarily consist of rent, wages, travel for training and restaurant opening teams, food, marketing, and other restaurant costs that we incur prior to the opening of a restaurant. These expenses will increase in proportion to the increase of our new restaurant openings. These costs are expensed as incurred. We expect that pre-opening costs will increase on an absolute dollar basis as we continue to build new restaurants and enter new markets.

Impairment of Long-Lived Assets

Impairment of long-lived assets includes impairment charges related to our long-lived assets, which include property and equipment.

Loss on Disposal of Property and Equipment

Loss on disposal of property and equipment includes the net book value of assets that have been retired and consists primarily of furniture, equipment and fixtures that were replaced in the normal course of business.

Interest Income and Interest Expense

Interest income consists of interest earned on our cash and cash equivalents. Interest expense includes mainly the interest incurred on our outstanding indebtedness, as well as amortization of deferred financing costs, mainly debt origination and commitment fees.

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Other Expense

Other expenses consist primarily of changes in the fair value of our preferred warrant liability. We expect to remeasure the liability associated with our outstanding warrants each quarter until they are exercised. In connection with our initial public offering, all outstanding warrants for our preferred stock will be either automatically exercised for no consideration or converted to warrants for our common stock and, as a result, we do not expect to incur these expenses as a public company.

Income Tax Provision

Our income tax provision consists primarily of federal and state income taxes. We have a net deferred tax asset position prior to valuation allowance considerations, consisting primarily of net operating loss carryforwards. For additional discussion, see Note 13 to our audited consolidated financial statements and Note 12 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

Results of Operations

Comparison of the Thirteen Weeks and Thirty-Nine Weeks Ended September 26, 2021 and September 27, 2020

The following table summarizes our results of operations for the thirteen weeks ended September 26, 2021 and September 27, 2020:

	Thirteen Weeks Ended						Dollar Change			Percentage Change
(dollar amounts in thousands)	September 26, 2021			September 27, 2020
Revenue	$	95,844		$	55,549		$	40,295			73	%
Restaurant operating costs (exclusive of depreciation and amortization presented separately below):
Food, beverage, and packaging		26,701			16,939			9,762			58	%
Labor and related expenses		30,316			22,727			7,589			33	%
Occupancy and related expenses		14,053			11,301			2,752			24	%
Other restaurant operating costs		11,640			9,288			2,352			25	%
Total cost of restaurant operations		82,710			60,255			22,455			37	%
Operating expenses:
General and administrative		28,944			23,335			5,609			24	%
Depreciation and amortization		9,303			6,624			2,679			40	%
Pre-opening costs		2,789			1,741			1,048			60	%
Impairment of long-lived assets		4,415			-			4,415			*
Loss on disposal of property and equipment		-			441			(441	)		*
Total operating expenses		45,451			32,141			13,310			41	%
Loss from operations		(32,317	)		(36,847	)		4,530			(12	%)
Interest income		(78	)		(128	)		50			(39	%)
Interest expense		23			140			(117	)		(84	%)
Other income		(2,196	)		-			(2,196	)		*
Net loss before income taxes		(30,066	)		(36,859	)		6,793			(18	%)
Income tax provision		-			-			-			*
Net loss	$	(30,066	)	$	(36,859	)	$	6,793			(18	%)

* Not meaningful

105

The following table summarizes our results of operations for the thirty-nine weeks ended September 26, 2021 and September 27, 2020:

	Thirty-Nine Weeks Ended				Dollar Change			Percentage Change
(dollar amounts in thousands)	September 26, 2021		September 27, 2020
Revenue	$	243,448	$	161,435	$	82,013			51	%
Restaurant operating costs (exclusive of depreciation and amortization presented separately below):
Food, beverage, and packaging		67,125		48,857		18,268			37	%
Labor and related expenses		79,343		61,348		17,995			29	%
Occupancy and related expenses		35,919		32,268		3,651			11	%
Other restaurant operating costs		33,001		25,306		7,695			30	%
Total cost of restaurant operations		215,388		167,779		47,609			28	%
Operating expenses:
General and administrative		78,395		72,168		6,227			9	%
Depreciation and amortization		25,558		18,831		6,727			36	%
Pre-opening costs		6,256		3,592		2,664			74	%
Impairment of long-lived assets		4,415		-		4,415			100	%
Loss on disposal of property and equipment		56		586		(530	)		(90	%)