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Crumbl has built a brand on constant innovation, a cult following, and an ever-shifting menu. But its mercurial nature might be its undoing.
Known for its pink boxes, Crumbl’s business model relies on a menu that changes weekly, making every product a limited-edition drop. This drop culture playbook works well for Stanley cups, Bogg bags, and sneakers. And it was once an innovative approach to the bakery model, driving $1.2 billion in sales for Crumbl in 2024, and helping the cookie brand, expand to all 50 states (and internationally) in just six years.
But a recent Bloomberg Businessweek article revealed cracks in the Logan, Utah-based desserts business. As the brand has expanded, hitting the 1,000 franchisee mark in 2024, it’s encountered some growing pains. For one—Crumbl’s overreliance on offering new products every week is proving costly for franchise owners, and difficult for employees.
One of the major benefits to becoming a franchisee of a popular brand is the predictability factor, as menus, recipes, and operations are set by the franchise brand. Plus, it is easier to forecast costs (and keep them lower) when ingredients remain the same week-to-week.
But Crumbl’s ever-shifting recipe model removes the predictability factor. And on top of that, Crumbl charges an unusually high franchising fee. According to the Businessweek report, Crumbl franchise owners must put up as much as $1.3 million in startup costs and fees, in addition to an 8 percent royalty fee.
“There’s just so much operational complexity in this brand that when someone’s saying, ‘Oh look at the numbers, they’re great,’ I’m like, ‘Yeah, but there’s a lot more that goes into the numbers than your traditional QSR [quick service restaurant],’” one Utah-based franchisee told Businessweek.
Franchise owners are often at the whim of unpredictable demand: one week a popular cookie might overwhelm employees with lines around the block, versus another week where less demand leads to product wasted. “It’s really hard to run operationally efficient and have solid KPIs [key performance indicators] when you’re getting whiplash. Most brands week over week would be dead if they were having to fluctuate 10 percent to 20 percent per week,” they added.
But it’s not only the business owners feeling the heat, as young employees are tasked with learning and mastering new complex recipes and designs on a weekly basis. The report notes employee burnout and high turnover amongst shift workers.
“We aren’t hiring pastry chefs. Many of the staff, it’s their first job, or first food-service industry job, and have no clue how to be,” an anonymous general manager told Businessweek.
For example, a recent Crumbl decision to expand beyond cookies and into desserts is elevating the pressure for frontline workers. It may also be affecting quality, says Businessweek. For example, a Dubai chocolate inspired dessert drop earlier this year saw claims of inconsistency and raw products shared to social media.
Following the Bloomberg report, photos of Crumbl’s logo removed from its HQ circulated online with rumors of the company’s closure emerging. The company’s CEO took to social media to deny the rumors. “I’m here to clear up the rumors that people think Crumbl is closing. That is absolutely not true,” CEO and co-founder Sawyer Hemsley said on TikTok. “We’re actually moving offices for reasons such as updating our Crumbl Test Kitchen. This space was simply too small, and we have big ideas in the future.”
In 2023, Crumbl laid off “dozens” of corporate employees. Then earlier this year, the company conducted more layoffs, cutting 10 percent of its 300-person corporate workforce.
“Even if Crumbl can get its house in order, it still needs to figure out the paradox of its premise,” Businessweek wrote. “How can a business balance perpetual novelty and infinite growth?”
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María José Gutierrez Chavez
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