Maybe the reason for Crumbl Cookies’ seemingly overnight success is the pink box, which stands out amid the company’s black-and-white stores and gets people excited even before they open it. Maybe it’s the revolving menu, which changes weekly and makes this seemingly simple concept a lot more difficult to copy than you think. Perhaps it’s the employees, who appear enthusiastic even late at night. Or maybe it’s the massive social media following. Or the fact that the brand gets its cookie ideas from the customers themselves.
But as we search for explanations as to why Crumbl Cookies went from having just one location in 2017 to more than 300 by the end of last year and 400 right now, with strong unit volumes and profits, all without spending a dime to advertise the franchise, we keep falling back to a story from Patrick and Katie Moradkhani.
The couple opened their Crumbl franchise in Bakersfield, Calif., in August 2020. It was the third in California. And it had some last-minute challenges. The store couldn’t get chocolate chips, for instance, and on the night before opening its connection to DoorDash wouldn’t work. Delivery is a big deal for Crumbl, and those orders were important to get the location off the ground.
But the people who helped the Moradkhanis through this included the CEO himself, Jason McGowan, and the chain’s chief technology officer, Bryce Redd, who spoke with the couple late into the night to help solve the problem. “We’re just one store,” Patrick Moradkhani said. “They had over 200-something locations at the time, but there they were, on the phone with us at 1 a.m.
“They’re just very in it. They care. They got it figured out.”
The store opened at 8 a.m. the next day. By 9 a.m., the Crumbl location in Bakersfield had 240 cookie orders from DoorDash.
From 0 to 400
Crumbl sells mostly large-sized cookies and some ice cream. It has a simple menu of six cookies that changes weekly and has a flourishing delivery business, using both its own drivers and third-party providers. Its inline stores are simple, with a massive cookie baking operation visible from the lobby. Customers can order from its app or from kiosks.
The past couple of years have been particularly good to Crumbl. System sales at the chain have grown 463% since 2019, according to data from the Technomic Top 500 Chain Restaurant Report. The company went from far outside the Top 500 to the 241st-largest chain in the U.S. over that time. Only Dave’s Hot Chicken has grown faster over that period.
This is not empty growth. The brand last year averaged nearly $1.7 million in sales per location, meaning it does as much business per unit as Denny’s. Selling cookies.
It also averaged a net profit of $357,512, according to Crumbl’s latest franchise disclosure document. While many companies will report sales data on their franchise documents, profitability data is remarkably rare. But the cost of opening one of these ranges from about $350,000 to $692,000. That means a Crumbl franchisee can get their investment back within just two years.
The more impressive numbers can be found on the chain’s social media feeds. Cookies, apparently, perform quite well on social. Crumbl has 5.2 million followers on TikTok, for instance. That’s as many as McDonald’s (2.1 million), Starbucks (1.8 million) and Wendy’s (1.3 million) combined.
Crumbl has 2.2 million Instagram followers (Wendy’s has 1 million), 411,000 Twitter followers (OK, Wendy’s has them beat with 3.8 million) and 538,000 YouTube subscribers (Wendy’s, 132,000). Suffice it to say, social has been huge for Crumbl.
Then again, social media has been a part of the Crumbl fabric from the very beginning.
Crumbl by the numbers
The crowdsourced cookie
Crumbl Cookies might not even be here had a landlord not agreed to a reduced rent.
Jason McGowan had worked in the technology industry, with companies such as Hangtime, i.TV and Ancestry. His cousin, Sawyer Hemsley, was a college student. Hemsley wanted to be an entrepreneur, and the two ultimately decided that a cookie concept would be a great idea. McGowan liked the idea of fusing his technology background into a concept, particularly around delivery.
Hemsley, now the chief operating officer, frequently drove around Utah, looking for potential sites. He came across one location in Logan with a wood exterior that seemed perfect—the building was about to be shut down if it didn’t work. “At the time they were asking for $1,200, and the building was going to be shut down in three or four months,” said McGowan. “But in my mind, I was like, ‘Oh, this is cool. We can just test it out and if it fails, it doesn’t really matter. Right. But I’m like, $1,200, that seems like a lot.”
He told Hemsley that if the landlord agreed to cut the rent to $900, they would do it. The landlord agreed. “I often think about that moment,” McGowan said. “What if he would have said no? Would there even be a Crumbl today?”
They got everything they needed to start their business, including the equipment, and started making cookies. They were missing one thing: A recipe.
“We did it a little bit different,” McGowan said. “We tried to start off that way, where we came here like, ‘Oh let’s just start making some cookies.’ How hard could this be? So, we launched some cookies and started experimenting with them and we’re like, ‘This is horrible.’”
Apparently, you cannot fake a cookie recipe. But rather than try the cookies on their own, McGowan and Hemsley decided to crowdsource it. They tested a chocolate chip cookie recipe on different people to see if they’d like them. After what McGowan says was “thousands” of iterations, they came across a recipe they felt was perfect.
“We realized very early on that social media is a huge part of the brand,” McGowan said.
So they opened the restaurant, with the one chocolate chip cookie recipe.
The right shade of pink
The crowdsourced cookies sold plenty. Crumbl then came up with other recipes in similar fashion, using ideas from customers through social channels to develop new varieties.
“My partner, he does the amazing job of coming up with ideas and also engaging social media in the audience,” McGowan said. “So if someone on social media said we should do a cornbread cookie, or that you should come up with a cookie that has Oreos in it to this and that, we actually take that feedback and give it a try.”
By the time the company had three stores, however, McGowan and Hemsley realized they could not make all the cookies, all the time. And they came up with the idea of a rotating menu that changes every Sunday. Employees get a preview of the new cookie recipes that come in. And the idea creates “scarcity,” McGowan said, while giving customers everywhere the opportunity to try new cookies at the same time.
That alone is not easy to do. Imagine if a cookie sells really well that week. Many brands would be tempted to keep it. Crumbl keeps true to its rotating menu. “It takes a lot of control to do that,” Patrick Moradkhani said. “You have to be committed to the brand to not cheat on it. You have to be true to your business commitments and your standards, even if the numbers tell us otherwise.”
The brand also started with delivery right off the bat, building the business into its model from the get-go. The service quickly proved popular with customers and the company largely managed its own delivery. At first, McGowan managed the whole process, working through weekends to manage delivery routes himself. Eventually, he cried uncle. “Our first corporate hire was a senior engineer at Facebook,” he said. “I can’t be staying up on Saturdays trying to manage delivery routes. We need to automate this.” It would provide the impetus for the technology that underpins the entire system.
Delivery orders come in and are sent to drivers, which some stores handle, or they are sent to a third party depending on the stress in the system, the size of the order and the number of drivers available.
Another element that sets the brand apart, the Moradkhanis said, is the box.
Walk into a Crumbl location and one thing that becomes clear is the color scheme, or lack thereof. Everything about it is plain. The walls are white. The sign under the self-order tablets is in a plain font, Mazzard Soft H Extra Bold. The boldest color is on the “open” sign on the front door.
And then the employee hands you the box. It’s pink. The box itself is trademarked and you can see why. The pink box against such a plainly designed space stands out. “It’s like a Tiffany’s box,” Patrick Moradkhani said. “It was those little things they did right. Sawyer really nailed it. Even on the exact hue of pink. It’s the perfect pink in a box.”
Fastest-growing chains since 2019
Source: Technomic
Cookie-loving franchisees
The brand began franchising, McGowan said, because they had relatives who wanted to open one. Much like the cousins had done so throughout the process, they realized that franchising makes sense, and so they decided to do it. When that worked, they sold more.
“We started franchising a couple of more stores and it struck, like, ‘Oh this is a thing, people actually really want to do this,’” McGowan said.
The company faced some doubters, notably those that, oddly enough, didn’t think people liked sweets as much as people do in Utah. Crumbl also had to overcome questions about the track record of single-item treat chains, notably cupcake businesses.
But it kept growing, adding new franchisees, entirely through organic means.
“We decided not to really publicize our company at all,” McGowan said. “We don’t have a Wikipedia page right now, and we’ve got 400 stores.”
The business all comes through social media word of mouth. And franchisees mostly come from people who’ve tried the cookies. That’s exactly how they want it. They want people to love the cookie before they sell it.
“We want franchise partners who love their community,” McGowan said. “We want franchise partners who love baking and going to the store. If it becomes a thing where it’s so much out there, and you only have people that all they care about is we can make money opening a Crumbl, then we miss an opportunity to really build a strong franchise base.”
“We have never advertised it once for a franchise partner, ever,” he added.
It appears to be working. Much of the U.S. territory is sold out. “I think a huge part of our success is because we’ve picked some franchise partners who are awesome,” McGowan said.
Expansion, competition and the future
McGowan said that once Crumbl realized it had an opportunity to get big, the company began setting in place processes that would help that happen. The company quickly devised strategies that would help it address problems at a much larger scale early on. That included strategies for technology, training, quality control, marketing and other areas. That has allowed the company to grow quickly.
“I think the mindset that we had in all the objectives that we had as a company were like, scale and build the systems and build technologies, build our marketing calendars, do all those things so that they scale,” McGowan said.
Still, the franchise world is littered with fad concepts that grew quickly based on a single item, then faded away. Frozen yogurt, for instance, is in a marked decline after exploding onto the scene a decade ago. Cupcakes also came and went.
Yet such comparisons aren’t always on point. Crumbl’s unit volumes alone are several times the typical frozen yogurt concept, even in their heyday. And the brand is not easily mimicked. Its massive social media presence alone provides a moat against potential competitors. Its rotating menu of 200 recipes also provides a major challenge. The brand is somewhat difficult to operate for such a simple menu, and that itself is a defensive mechanism.
At the same time, treat concepts are thriving right now. According to Technomic data, the typical fast-food “other” treat concept has grown by about 15% since the outset of the pandemic.
The older and larger Nothing Bundt Cakes, for instance, has grown by 26% since 2019, according to Technomic data. Insomnia Cookies, Crumbl’s biggest rival and a pioneer in the late-night-cookie delivery business, has grown by 18%. Krispy Kreme, whose explosive growth in the early 2000s may be most like Crumbl’s (albeit with a far less financially viable model at the time) has grown by 32%.
When times are difficult, treats can provide something of relief. The Moradkhanis discovered this when they opened their location during the pandemic.
“Everyone was on lockdown,” Katie Moradkhani said. “It was an escape for people to get a cookie. It was their happy place. Whatever hard time they were going through, it was a place they could come to, experience, you walk in and you’re welcome.”
Or, as McGowan says, “everyone loves cookies.”
And the sales keep coming. “I did more sales on Valentine’s Day, a year-and-a-half after opening, than I did my entire opening week, and we had one of the largest openings,” Patrick Moradkhani said.
For now, the brand has hundreds more locations coming as it works to become a national brand, though with units in 40 states it is nearly there. Crumbl may then look at international markets. Perhaps by then it’ll have a Wikipedia page. “Maybe when we have 1,000 locations,” McGowan said.