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Crumbl Cookies, a popular cookie chain known for its rapid growth, has quietly closed several stores for the first time since it opened in 2017. The company shut down seven locations last year and plans to close more stores in 2024 due to a slowdown in business.
Crumbl Cookies Shuts Stores Amid Financial Dips
According to QSR, Crumbl Cookies, a chain known for its delicious offerings, has seen a significant drop in revenue and profits over the past year. This downturn has led to strategic changes at the executive level and the closure of several locations, marking the first time the company has had to shut down stores since its inception in 2017.
In 2023, Crumbl Cookies closed four stores in California, one each in Florida, Georgia, and Utah, as detailed in its franchise disclosure document. As reported by Williamson Source, more closures followed in 2024, including a store in Bellevue, Tennessee.
Additionally, the company closed its Victorville, California shop in February due to underperformance, per Victor Valley News Group. This location has only been open since July 2022.
Despite these closures, Crumbl Cookies reached a milestone by opening its 1,000th store in Burbank, California, the same month some closures took place.
Crumbl Cookies operated 970 stores across the United States in 2023. Despite closing several locations, the company plans to open 122 new stores in 2024, according to its Franchise
Disclosure Document (FDD). This number marks its lowest annual increase since 2020, showing a significant slowdown from the 184 stores opened in 2023 and 363 in 2022.
As part of its strategic adjustments, Crumbl purchased a franchised location in California, turning it into the company's second store.
To boost sales, Crumbl has diversified its menu this year to include desserts like Cinnamon Squares, Tres Leches Cake, and Carrot Cake.
Also Read: Chipotle and Starbucks Menu Shock: Prices Surge Up to 8% Over Legal Changes
Crumbl Cookies Plans Strategic Global Expansion
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According to Crumbl's CEO, Jason McGowen, the store closures are part of a deliberate plan. Speaking with QSR in 2023, McGowen described the move as a planned slowdown to "take a breather," aiming to attract more customers and lay the groundwork for expansion into international markets, including Canada and the U.K.
"It's an interesting strategy, and we think it'll pay off," McGowen said, highlighting the company's strategic pivot towards sustainability and growth on a global scale.
McGowenis is targeting expanding the company's presence in international markets such as the United Kingdom and Canada, where it currently has 10 locations. This strategic shift comes as the company experiences a significant downturn in financial performance.
In 2023, 571 Crumbl stores reported an average revenue of $1.16 million and an average net profit of $122,955 per location. These figures represent a sharp decline from 2022 when 324 stores averaged $1.84 million in revenue and $298,319 in net profit.
This downturn translates to a 37% decrease in average income and a 59% drop in average net profit, highlighting the challenges faced by the company in maintaining its previous growth trajectory.
McGowen acknowledged that while their expansion strategy is not flawless, significant progress has been made. "We don't think it's going to be perfect. There may be a mistake on a store location or that sort of thing," McGowen said.
He expressed confidence in the company's initial phase of strategy, believing they have "nailed" it. Moving forward, the company plans to be more deliberate in choosing locations and timing for new stores. "So now it's going to be a little bit more strategic about where we place locations and the timing," he explained.
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