I have been a loyal Crumbl customer since they entered the Richmond market a few years ago. As Starbucks did with coffee, Crumbl has successfully pushed the price point for a cookie to a premium level. Ever considered becoming a Crumbl franchise owner? Here are a few things worth considering:
On a positive note:
- Started in 2017 with a single location in Logan, Utah, Crumbl has quickly grown into the largest cookie franchise system in the nation, with over 850 franchises in the US and internationally and many more expected to open within the next year. They are currently dominating the so-called “Cookie Wars” in what is estimated to be a $24 billion a year industry.
- The business model is about as simple and straightforward as it gets.
- Crumbl has a very active social media presence, with millions of followers on TikTok and Instagram.
- Untapped revenue streams (e.g., packaged cookie dough) and efficiency (robotic mixing and baking equipment) may further enhance productivity and profitability in the future.
On the downside:
- Explosive growth creates its own risks, including new franchised locations cannibalizing existing ones, outgrowing existing management capacity to monitor franchisee performance and compliance with system standards, business focus shifting toward positioning for a sale/exit event rather than the financial health and well being of the franchise owners and the system as a whole.
- Same store revenues and profits appear to be trending downward after first 1-2 years of operations (i.e., the initial buzz wears off).
- A growing number of existing franchise owners reportedly are looking to sell and use the proceeds to open new locations, not necessarily a good sign for such a young franchise system.
- Negative publicity from recent labor law violations and fines imposed by the U.S. Department of Labor.
- Aggressive pursuit of lawsuits against competitors in an increasingly competitive industry. While sometimes litigation is necessary to enforce and protect a company’s rights and intellectual property, getting mired in lawsuits can be a significant distraction and expense for a franchise system and its management.
- The public health question. There’s no way to sugarcoat it, Crumbl cookies are a guilty pleasure with little to no nutritional value. A single milk chocolate chip cookie reportedly contains a full day’s worth of saturated fat (20 grams) and 28 grams of added sugar (equal to 6½ teaspoons) (https://www.cspinet.org/article/how-many-calories-are-crumbl-cookie).
Time will tell if Crumbl proves to be a sustainable business model or just a passing fad. Crumbl Franchising, LLC is registered to sell franchises in the Commonwealth of Virginia, so for more info about Crumbl and its franchise opportunities, visit https://crumblcookies.com/.