How Much Does It Cost to Start a Crumbl Cookie franchise?
March 4, 2023 | Last Updated on: March 11, 2023
March 4, 2023 | Last Updated on: March 11, 2023
Are you a person who enjoys eating cookies? If this is the case, you are going to really like Crumbl Cookies. This dessert brand is relatively young, but it has already set itself apart from the competition by developing a method of preparation and presentation that is unique. In just six years, Crumbl Cookie has become one of the fastest-growing franchises in the nation, making it a leading franchise opportunity.
Crumbl Cookies is rapidly gaining more and more customers because of the key features that make the concept unique, including their weekly rotating menu that keeps options fresh and exciting, open-concept kitchens that allow customers to see their cookies being made, and their “famous pink box” that make their product particularly shareable from a social media standpoint.
Crumbl Cookie helps its franchisees by providing a smooth onboarding process, which includes all of the required training, assistance with launching your bakery, and assistance with running the company. If you are searching for a franchise opportunity that is both satisfying and lucrative, Crumbl Cookies is an excellent choice to take into consideration. In this post, we’ll cover the ins and outs of owning a running a Crumbl Cookie franchise so that you can begin the process of determining whether or not this might be a good opportunity for you.
Starting a Crumbl Cookie franchise is not cheap; however, compared to many other franchise options, it is relatively inexpensive. Additionally, the average store revenues and profits are quite high in comparison to the start-up costs. New franchisees can expect to pay between $228,000 and $600,000 as a projected initial investment needed to open a Crumbl Cookie location. Franchisees will also need to be able to pay a $25,000 franchise fee upfront.
Here is a breakdown of what prospective franchisees can expect:
The financial requirements that Crumbl Cookie places on prospective franchisees are also quite low. They only require owners to have a minimum liquidity (i.e., assets that can be converted into cash) of $150,000. This is much lower than many other franchises require, which can often reach into the $500,000+ range.
After you pay the initial investment and franchise fee, there are ongoing costs associated with maintaining your franchise. The national franchise has to have a way to make money in the long term from its locations. As such, the national Crumbl Cookie brand charges franchisees a royalty fee equal to 8% of total sales (monthly). This charge contributes toward covering the expenses of the many services and assistance that Crumbl Cookies offers its franchisees as part of its business model. In addition, franchisees must pay Crumbl Cookie an additional 2% of their gross sales for marketing fees and public relations as part of their ad royalty fee. Here is a breakdown of the two ongoing fees:
Jason McGowan and Sawyer Hemsley established Crumbl in 2017 as a side project for themselves. Fascinatingly, none of the company’s founders had any experience in the baking industry.
In fact, they used the A/B testing in an exceptional manner to refine their cookie recipe. McGowan, who had a background in the IT industry, believed that doing A/B testing to find the ideal cookie recipe was the most effective strategy.
Not long after that, they started introducing additional tastes, ultimately leading to their changing menu concept.
Each week features new and exciting flavors for the Crumbl cookie line-up, which are rotated out to keep the menu items fresh and customers coming back to try new flavors. Each week, the selection is made by taking into account the customers’ past preferences, the availability of the ingredients, the visual presentation, and the variety in the tastes. While the first Crumbl product was an extremely delicious chocolate chip cookie, the company has now evolved to over 170 varieties, including themed cookie lineups like morning cookies such as berry crunch and waffle cookies.
Since it was first established, the gourmet cookie company has accomplished remarkable growth, expanding to more than 400 locations. In 2021, it was the fourth fastest-growing franchise in the nation. Indeed, their locations generate, on average, $1.7 million in sales annually and more than $350,000 in net profit.
These are the steps that need to be taken in order to get your own Crumbl Cookies franchise off the ground. In particular, Crumbl Cookie lists a 7-step process on their website that you must follow to open a location. The steps are as follows:
First, you will want to be sure that you get yourself familiar with Crumbl Cookie and its brand. You don’t want to go into the Crumbl Cookie franchise process knowing little about the product or the business model. The company is looking for franchisees they think are committed to the brand and will be able to run a successful and profitable location in the long term. So, you will need to do your research and dive deep into understanding Crumbl Cookie. Develop clear reasons as to why you are interested in running a Crumbl Cookie franchise and why you think you would be a good fit as a franchisee.
For starters, you should definitely plan on visiting a Crumbl Cookie location. You should also consider talking to current Crumbl Cookie franchise owners who might be able and willing to share some details with you as to what it is like to run a Crumbl Cookie location.
Before moving forward, you must also ensure you meet all the requirements for opening a Crumbl Cookie. You will need to be able to meet their minimum liquidity requirement and live in an area where Crumbl Cookie franchises can still be opened. Crumbl Cookie does not want owners who are running their location as a side gig or a side hustle. They want dedicated owners who view their store or stores as their primary business.
Additionally, you will want to start thinking about a potential location or location that might be good for a new Crumbl Cookie location. This will be pivotal in the process. Make sure to look at the website to know what markets are still available for Crumbl Cookie franchises, as many of the markets across the United States are now sold out. As part of your research, be sure to take a look at Crumbl Cookie’s franchise disclosure document (FDD).
Once you have submitted an inquiry into starting the process of opening a Crumbl Cookie franchise, you will have to go through an interview process. The franchise will take this as an opportunity to get to know you better, learn about why you are interested in starting a Crumbl Cookie franchise, and determine whether they think you would be a good fit for them.
If the interview goes well and the franchise decides to move forward with your application, this is when you will propose a specific location within the region you have inquired about. You will want to think long and hard about the location you propose. As part of this, you should do some market research to confirm that there is indeed demand for a Crumbl Cookie location within the area.
Consider things like the population (i.e., are there enough potential customers), the demographics (do locals have enough discretionary income to spend money on high-end, relatively expensive cookies), and more. Check where other Crumbl Cookie franchises are located to ensure you won’t infringe on their territory. Also, consider what other competition may be in the area. Are there a lot of long-standing local bakeries that are popular and specialize in cookies? Because it may be hard to compete with a local favorite with a long track record of success. These are the sorts of other businesses you will want to survey the area for so that you can be confident you are opening in a market that is advantageous for your business.
Crumbl Cookie can help advise you and provide you with guidance in choosing a location as well. They know what works based on their track record with other franchises.
Once you have chosen a location and Crumbl Cookie approves it, you will complete your purchase of the franchise. This will include paying the franchise fee of $25,000 and beginning to pay the initial fees to open your location. During this time, you can start considering financing options to help you afford all the different components that go into opening a brand-new storefront.
Now that you are in the process of opening your own storefront, Crumbl Cookie will have you go through their onboarding process. This is when you will learn the ins and outs of actually running the day-to-day operations of a Crumbl Cookie franchise. During this time, you will receive training on making the products, running the store, and more. That way, you will be fully prepared to run your franchise once the doors open.
This is the part where you will actually build your brand-new storefront. You must obtain permits and hire contractors to make your plans a reality. The Crumbl Cookie national franchise will help you with this process.
This is the final and most exciting step of the process! Your store’s grand opening! The Crumbl Cookie national franchise will assist you in making plans for your launch in order to generate the most local publicity and attention possible. That way, you can get started on the right foot and lay the foundation for a successful and long-running business.
As previously noted, Crumbl Cookie franchises generate, on average, around $1.7 million in sales annually and more than $350,000 in net profit. That said, the amount of net profit that a Crumbl Cookies franchise owner may earn is variable and is based on a number of factors, including the location and size of the restaurant, as well as the owner’s management skills and level of dedication to the business’s success. Obviously, some franchise owners are able to generate more sales than others, which generates more downstream profits in the long run. That said, Crumbl Cookie franchises generate extraordinarily high average net profits, given their startup costs and the nature of their line of business.
Consider the following scenario: we do the math and determine that the initial investment ranges from $228,000 to $600,000 and that the average yearly profits of the franchise owner are $350,000. In such a scenario, the total investment will be recovered anywhere between 0.76 and 2.0 years.
However, we are not taking into account the resale value of the full Crumbl Cookies franchise company, which would drastically cut down on time needed to break even.
Before opening a Crumbl Cookie franchise, you should generate a business plan (which will be required by the national franchise) that outlines, among other things, some rough calculations that help determine the profit margin and total revenue of your new store.
There is no question that the initial investment for a Crumbl Cookie business is fairly significant. But it can still be a great decision if the opportunity is right for you. Here are a number of benefits you can consider when determining if opening a Crumbl Cookie franchise is right for you:
In spite of the fact that it was just established in 2017, Crumbl has already managed to become a market leader because of the originality and high quality of its goods. Many industry observers have been impressed by the explosive growth that the franchise has experienced in just a short period of time. And just a few markets are still left for sale, as many individuals interested in starting their own small businesses have recognized the strong opportunity that Crumbl Cookie franchises are.
One of the core reasons people tend to forget about fast-food restaurants is the redundancy of their flavors and the fact that their products don’t change very often. The fact that the menu at Crumbl is refreshed every week is one of the ways the brand is breaking this trend and generating excitement about its products. Customers won’t experience the same level of monotony in flavor, and the variety and change keep customers coming back for new experiences each week.
As noted at the post’s opening, Crumbl has developed into an incredibly popular brand, making waves all over the place. People don’t only purchase Crumbl because of its flavor; they also do it for the experience. Advertisements and postings relating to Crumbl cookies may be found on a variety of social media sites, such as Tiktok and Instagram. People are excited to share in the experience. By opening a Crumbl location, you are tapping into this brand recognition and the excitement they are currently generating surrounding their products and offerings.
Compared to the franchise fees required by other franchises that generate similar levels of average sales and net profits, Crumbl Cookie is a very cheap franchise to open. The initial investment is quite low, and the franchise fee is only $25,000. Additionally, they only require franchisees to have $150,000 in liquidity. This makes the franchise accessible to a wide range of individuals with varying income levels.
While there are competitor franchises that could take away business from your Crumbl Cookie location, it is actually a relatively unique franchise concept. As such, the competition faced by Crumbl Cookie franchises is not as steep as the competition faced by, for example, burger fast food franchises. This can make a real difference, especially if you think you have found a market where there might be considerable demand for the franchise.
Before submitting your franchise application, it is important that Crumbl Cookie franchisees be aware of the potential drawbacks associated with owning a Crumbl shop. We have developed a list of some of the difficulties entrepreneurs might anticipate encountering to help you decide whether or not it is worth investing in this business:
Altering the menu on a weekly basis may provide some logistical issues. Having a menu that changes means your operation must change a little daily. You must ensure you have the right ingredients for each cookie, etc. Fortunately, all cookies use most of the same ingredients, with just a few changes to make them different. So, this isn’t a huge logistical nightmare by any means, and Crumbl Cookie franchises nationwide are doing it every day with great success.
In addition to this, you need to devote more effort to marketing and posting the menu on various social media platforms. You want to ensure you keep customers up-to-date on what cookies are being featured and offered each week. This is what makes the changing menu beneficial since it draws customers back in. If you are not updating them on social media and via other advertising platforms and methods, the concept won’t be as powerful.
As the owner of Crumbl, one of the operational issues you may confront is ensuring the products you put out are consistently high quality. However, there is a risk that product quality will suffer as a result of frequent menu changes. You will need to ensure that you are keeping your employees on track and that they are prepared to create not only one type of cookie but many different types.
While Crumbl Cookie has seen explosive growth since it began in 2017, it still doesn’t have the kind of track record that many other long-standing franchises have. As such, there is always a possibility that the novelty of Crumbl Cookie and its offerings will wear off. While there is no indication that that will happen, opening a Crumbl Cookie is not the same thing as opening, for example, a McDonald’s.
Starting a Crumbl Cookie, like any franchise, is not an easy process. It takes time and dedication, as well as a great deal of research and planning. However, with the right approach and the proper effort, it could be an incredible opportunity for a small business owner interested in starting their own small business.
Plus, while there are no guarantees, Crumbl Cookie franchises have seen incredible success over the past few years, making them an exciting and appealing opportunity. Their corporate support team and the dedication the national brand has to its franchisees are evident, and they appear to be primed for future growth moving forward.
As with any business venture, though, the key is research. The more time you put into investigating the franchise opportunity, as well as other potential franchise options, the lower the risk of failure will be. So, take this article as a good launching pad for diving deeper into the subject of Crumbl Cookie franchises and franchises in general. With this basis, you can start to really explore what your options are and determine what makes the most sense for you individually. And be sure to check out our many other posts on other franchise opportunities available to you! So, get set, get ready, and start researching!
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