Crumbl Cookies Franchise in 2024: Costs, Fee & FDD
Explore the costs, fees, and growth potential of owning a Crumbl Cookies franchise. Learn about their innovative rotating menu, impressive revenue, and extensive support, making it a compelling investment in the dessert franchise industry.
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Crumbl Cookies, founded in 2017 by cousins Jason McGowan and Sawyer Hemsley in Logan, Utah, has quickly made its mark in the dessert franchise industry. With a passion for bringing people together over delicious, freshly baked cookies, the duo set out to create a brand that stands out through quality, innovation, and a unique customer experience. Their commitment to perfecting the cookie-making process and offering a rotating menu has positioned Crumbl as a significant player in the competitive dessert market.
At the heart of Crumbl’s offerings are their gourmet cookies, known for their large size, soft centers, and creative flavors. Each week, Crumbl introduces a new lineup of cookie flavors, which keeps customers returning to try the latest creations. Besides their signature cookies, Crumbl also offers ice cream, catering services, and gift boxes, catering to a wide range of events and special occasions. Their core market includes families, young adults, and dessert enthusiasts who appreciate high-quality, inventive treats.
Since its inception, Crumbl Cookies has experienced remarkable growth. As of now, the franchise boasts over 900 locations across the United States, making it one of the fastest-growing cookie franchises in the country. This rapid expansion highlights the brand’s popularity and the high demand for its products. Crumbl serves thousands of customers daily, contributing to its status as a beloved destination for cookie lovers nationwide.
Crumbl provides extensive support to its franchisees, ensuring they are well-equipped for success. The franchise offers comprehensive training programs covering everything from baking techniques to customer service. Additionally, Crumbl is committed to community involvement, often partnering with local charities and organizations to give back. This dedication to support and community engagement helps foster a strong, loyal customer base and a positive brand reputation.
Crumbl Cookies Franchise Insights
- Crumbl’s impressive 587% three-year growth rate, with over 200 new units added annually from 2021 to 2023, showcases the franchise’s rapid expansion and increasing popularity. This growth trajectory highlights a robust market demand and a successful franchise model, making it an attractive investment opportunity.
- With Crumbl’s median gross sales exceeding $1.1 million in 2023, it sets a high benchmark for the dessert-focused franchise sector. Crumbl Cookies’ competitive edge lies in its unique product offering and customer experience, which could potentially rival these impressive figures.
- The Restaurant and Food industry, including Crumbl Cookies, has been significantly impacted by inflation in recent years, affecting both operational costs and consumer spending habits. However, Crumbl’s unique product appeal and innovative marketing strategies can help mitigate these challenges by maintaining strong customer loyalty and demand.
- Owning a Crumbl Cookies franchise is particularly appealing due to its weekly rotating menu and robust social media presence, which effectively drive continuous customer engagement and repeat business. This dynamic approach not only keeps the brand fresh and exciting but also supports sustained revenue growth.
Crumbl Cookies Franchise Key indicators
Growth YOY (%)
41%
vs industry 3%
3-year Growth (%)
587%
vs industry 3%
Total U.S. Franchised Units
968
3-year Failure Rate
1%
vs industry 11%
How much does it cost to open a Crumbl Cookies franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Crumbl franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Crumbl franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). you can see a breakdown of the costs to open a Crumbl’s below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial franchise fee | $50,000 | $50,000 |
| Opening Tech Equipment Package | $9,000 | $15,000 |
| Opening General Equipment Package | $170,000 | $180,000 |
| Opening Box and Ingredient Package | $9,000 | $12,000 |
| Initial training fees, and travel, lodging, food, and other expenses while training | $20,000 | $30,000 |
| Real estate and improvements | $75,000 | $640,000 |
| Rent - 3 months | $16,666 | $83,333 |
| Professional fees | $8,000 | $53,000 |
| Equipment, furniture, fixtures, decor, and supplies | $75,000 | $100,000 |
| POS system, computer hardware, and software | $3,500 | $15,000 |
| Signs | $6,500 | $32,000 |
| Misc. opening costs | $2,500 | $30,000 |
| Opening inventory | $5,000 | $16,000 |
| Additional funds - 3 months | $10,000 | $10,000 |
| Total | $460,166 | $1,266,333 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Crumbl Cookies franchise, the required capital involves both the initial investment costs and a net worth requirement set by Crumbl Cookies. Let’s take a closer look below:
- Initial Investment As shown above, the total estimated initial investment ranges from $460,166 to $1,266,333. This includes all the startup costs such as the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for initial operating expenses.-
- Liquid Assets and Net Worth Requirement Franchisees are usually expected to have at least $150,000 in liquid assets and a net worth of around $500,000. These figures are estimates based on industry standards and Crumbl’s typical financial requirements for franchisees. For the most accurate and up-to-date information, it’s advisable to contact Crumbl Cookies directly or consult their official franchise documentation.
How much does a Crumbl Cookies franchise owner make?
Calculating the salary of a Crumbl Cookies franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Crumbl Cookies franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Crumbl Cookies Revenue & Gross Sales
In 2023, Crumbl Cookies franchises achieved a median gross sales of $1,100,536, reflecting a sizable (39%) decrease from the previous year. This weak financial performance indicates that there may be some potential issues with the Crumbl Cookies franchise business model that potential franchisees should be aware of. Additionally, the decrease may be partly attributable to the very high number of new stores that have opened in a short amount of time, which typically decreases the median gross sales calculation in the short term.
Which key factors impact the average revenue performance of Crumbl Cookies franchisees?
The decline in U.S. franchisee median gross sales revenue for Crumbl Cookies from 2022 to 2023 could be attributed to several factors. Rapid expansion with hundreds of new units opening might have led to market saturation, diluting individual store sales. Additionally, economic changes such as inflation and increased operational costs could have impacted consumer spending and profitability. Strategic initiatives, if not well-executed, might have also strained resources and affected sales performance. Understanding these factors is crucial for prospective franchisees to anticipate and mitigate potential challenges.
Crumbl Cookies Franchise Operational Costs
Operational costs for a franchise like Crumbl are the ongoing expenses required to run the day-to-day operations of the business. These costs are essential for maintaining the business’s functionality and ensuring smooth operations. For a Crumbl franchise, operational costs include:
- Real Estate Leasing or purchasing a suitable location, along with property taxes.
- Equipment Purchasing baking equipment, furniture, and fixtures.
- Inventory Initial and ongoing costs for ingredients and packaging materials.
- Labor Wages for employees, including bakers and customer service staff.
- Utilities Costs for electricity, water, and other utilities.
- Marketing Local advertising and marketing expenses.
- Insurance Coverage for the business, including liability and property insurance.
- Technology Point-of-sale systems and other necessary technology infrastructure.
- Miscellaneous Expenses Additional costs such as licenses, permits, and professional services (e.g., accounting).
Careful planning and budgeting for these operational costs are crucial for the financial health and success of your Crumbl franchise.
Crumbl Cookies franchise fees
Owning a Crumbl Cookies franchise is different from owning an independent, non-franchised business. All franchises tend to charge ongoing fees that franchisees are required to pay to operate. Crumbl Cookies requires their franchisees to pay the below fees:
- Royalty Fee This is a monthly fee paid to Crumbl Cookies, typically calculated as a percentage of gross sales. For Crumbl Cookies, this fee is usually 8% of a location’s monthly gross sales.
- Advertising and Marketing Fees Franchisees are required to contribute to both national and local advertising funds. The national advertising contribution is 2% of gross sales.
- Additional Fees There are additional fees for training programs, technology, and other items provided by Crumbl that may be applied.
These ongoing fees are essential to consider when planning the financial aspects of owning and operating a Crumbl Cookies franchise. They cover the costs of brand support, advertising, and ongoing operational assistance provided by Crumbl Cookies.
Crumbl Cookies franchise earnings
The earnings of a Crumbl Cookies franchise owner can vary significantly based on a variety of factors including location, sales volume, operational efficiency, and cost management. However, on average, Crumbl Cookies franchise owners can expect to earn a significant income.
Crumbl Cookies franchisees have a median gross sales of $1,100,536. Based off of the median gross sales, we can estimate a Crumbl Cookies franchisee makes $165,080 in estimated earnings (EBITDA) per year, assuming that the franchisee is an owner-operator in the location. This means that you can consider the salary of a Crumbl Cookies franchise owner to be roughly $165,080 before interest, taxes, depreciation, and amortization (EBITDA).
If the franchisee is semi-absentee, then earnings will be significantly lower based off of the costs of having a hired manager.
How to open a Crumbl franchise
Becoming a Crumbl franchisee is a rigorous process that involves financial scrutiny, extensive training, and thorough evaluation. However, it offers the potential for a lucrative business opportunity backed by a globally recognized brand and comprehensive support system.
The full process for how to open a Crumbl franchise is outlined below:
1. Initial Inquiry
a. Research: Learn about Crumbl Cookies and review their franchise information.
2. Franchise Application
a. Application Form: Fill out and submit the franchise application form provided by Crumbl Cookies.
b. Financial Disclosure: Provide detailed financial information to demonstrate your ability to meet the investment requirements.
3. Pre-Qualification
a. Initial Screening: Crumbl’s team reviews your application and financial status.
b. Pre-Qualification Approval: If you meet the initial criteria, you’ll be invited to move forward in the process.
4. Franchise Disclosure Document (FDD)
a. Receive FDD: Crumbl provides the Franchise Disclosure Document, which outlines all terms, fees, and obligations.
b. Review Period: Take at least 14 days to thoroughly review the FDD, preferably with legal and financial advisors.
5. Discovery Day
a. Invitation: Attend a Discovery Day at Crumbl’s headquarters.
b. Meeting the Team: Engage with the corporate team, ask questions, and get a deeper understanding of the business operations and culture.
6. Franchise Agreement
a. Agreement Signing: If both parties agree to move forward, sign the franchise agreement.
b. Initial Fee Payment: Pay the initial franchise fee as specified in the agreement.
7. Site Selection and Approval
a. Location Search: Work with Crumbl to identify and secure a suitable store location.
b. Approval: The chosen site is subject to approval by Crumbl’s real estate team.
8. Training Program
a. Comprehensive Training: Attend Crumbl’s extensive training program covering baking, customer service, and business management.
b. On-Site Training: Participate in hands-on training at an existing Crumbl location.
9. Store Construction and Setup
a. Design and Build: Collaborate with Crumbl’s design team to build out the store according to brand standards.
b. Equipment Installation: Purchase and install necessary baking and point-of-sale equipment.
10. Pre-Opening Preparation
a. Hiring: Recruit and train staff.
b. Inventory: Order initial inventory and supplies.
c. Marketing Plan: Implement pre-opening marketing and advertising strategies.
11. Grand Opening
a. Soft Launch: Conduct a soft opening to test operations and make adjustments.
b. Grand Opening Event: Officially open your Crumbl Cookies store with a grand opening event to attract customers and generate buzz.
12. Ongoing Operations
a. Operational Support: Continue to receive support from Crumbl’s corporate team in areas such as marketing, operations, and product development.
b. Continuous Improvement: Regularly review and refine business practices to ensure continued success and growth.
By following these steps, you’ll be well-prepared to launch and operate a successful Crumbl Cookies franchise.
Pros and Cons
Pros:
Strong Brand Recognition: Crumbl Cookies has quickly become a well-known and beloved brand, attracting a loyal customer base with its unique weekly rotating menu.
High Demand: The innovative and high-quality product offerings generate consistent demand and repeat business.
Comprehensive Support: Franchisees receive extensive training and ongoing support from the franchisor, including marketing, operations, and product development.
Proven Business Model: The franchise has a successful track record of rapid expansion and profitability.
Social Media Savvy: Crumbl’s strong presence on social media platforms helps drive brand awareness and customer engagement.
Community Engagement: The brand’s commitment to local community involvement helps build strong local customer relationships and positive brand reputation.
Cons:
High Initial Investment: The required capital investment, including franchise fees, construction costs, and equipment, can be substantial.
Market Saturation: Rapid expansion could lead to market saturation in some areas, potentially impacting individual store sales.
Economic Sensitivity: The restaurant and food industry can be heavily impacted by economic fluctuations and inflation, affecting profitability.
Ongoing Fees: Franchisees must pay ongoing royalty and marketing fees, which can reduce overall profit margins.
Operational Complexity: Running a Crumbl franchise requires managing various aspects, including staff, inventory, and customer service, which can be challenging for new business owners.
Compliance with Franchise Standards: Strict adherence to Crumbl’s operational guidelines and standards is mandatory, limiting operational flexibility.
