---
title: "Why Crumbl won't last"
url: https://modern-mba.com/case/cookies
sector: "Food & beverage"
sector_url: https://modern-mba.com/sector/food-and-beverage
aired: 2024-11-30
published: 2026-08-27
updated: 2026-08-28
reading_time_minutes: 15
charts: 20
video: https://www.youtube.com/watch?v=Ha2oNXDZuSg
author: "Yishan Lin"
author_url: https://www.linkedin.com/in/yishanlin/
publisher: Modern MBA
license: "© Modern MBA, all rights reserved. Quote and cite with credit and a link; republishing needs written permission."
---

# Why Crumbl won't last

Mrs. Fields went from one store to 780 and then to a zombie; Famous Amos and David's Cookies retreated to grocery shelves. In 2018 a Crumbl franchise was more profitable than a McDonald's — a 30% store-level operating margin on $698,000 of sales. Five years later that margin is 10% and the average owner takes home about what a present-day Mrs. Fields owner does, while corporate went from $4 million to $152 million. This case study reads the franchise disclosures to explain the gap: the fee that doubled, the royalty that rose to 12%, the 12-cent-per-pound chocolate rebate, and the card fee Crumbl charges at 3% while paying 2.37%.

## Key figures

- **30% → 10%** — Crumbl store-level operating margin, 2018 to 2023
- **$4M → $152M** — Crumbl corporate revenue over the same five years
- **$32M** — Collected a year in supplier rebates and kickbacks

## The argument

Every cookie brand gets its moment and then loses it. Mrs. Fields went from one store in 1977 to 780 by 1993 and became a mall institution; today the average location grosses less in real terms than it did in 2000 and is usually run by one person, who is the franchisee. Famous Amos and David's Cookies rose in her wake and were crushed by the same recession, retreating to grocery shelves and wholesale, where they remain. The cookie never stops selling. The brand built on top of it always cools.

Crumbl is that story running faster. One store in 2017 to over 1,000 by 2024 on weekly rotating flavors lifted from fashion drops — and the fade has already started. Average store sales are down from $1.77 million to $1.1 million and store operating margin from 30% to 10%, which leaves the average franchisee taking home roughly what a present-day Mrs. Fields owner does.

The difference is who holds the bag this time. Mrs. Fields owned her stores and went down with them. Crumbl was built to franchise from day one: a $50,000 non-refundable fee, royalties raised from 10% to 12% in three years, a 2% admin fee, 12 cents a pound back on chocolate, and 3% on card transactions the processor charges Crumbl 2.37% for — about $32 million a year through an affiliate LLC. Corporate went from $4 million to $152 million while store margins collapsed. Taking fees that hard, that fast, is what a company does when it knows the hype is temporary. The franchisees are not the customers. They are the product.

## Charts

### Nothing in food and beverage has grown like this

Crumbl stores worldwide since founding. One location to over a thousand in seven years.

|  | Counts |
| --- | --- |
| 2017 | 1 |
| 2018 | 15 |
| 2019 | 55 |
| 2020 | 100 |
| 2021 | 327 |
| 2022 | 689 |
| 2023 | 970 |
| 2024 | 1,068 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-1 · Sources: https://modern-mba.com/case/cookies#sources

### Mrs. Fields had good margins from day one

Store-level operating margins around the time of founding. The format was never the problem.

|  | Percentages |
| --- | --- |
| McDonald's | 21% |
| Mrs. Fields | 20% |
| Taco Bell | 16% |
| Starbucks | 16% |
| Pizza Hut | 15% |
| KFC | 14% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-2 · Sources: https://modern-mba.com/case/cookies#sources

### You can only charge so much for one cookie

Average gross revenue per store by brand, 2000. Margin was never the constraint — ticket size was.

|  | US dollars |
| --- | --- |
| Starbucks | $1,600,000 |
| McDonald's | $1,393,388 |
| Subway | $944,000 |
| Baskin Robbins | $896,000 |
| KFC | $823,000 |
| Pizza Hut | $712,000 |
| Domino's | $533,617 |
| Mrs. Fields | $353,000 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-3 · Sources: https://modern-mba.com/case/cookies#sources

### Twenty-two years and no movement

Average revenue per Mrs. Fields store, not adjusted for inflation. It grosses less today in real terms than in 2000.

|  | US dollars |
| --- | --- |
| 2000 | $353K |
| 2001 | $357K |
| 2002 | $321K |
| 2015 | $283K |
| 2016 | $319K |
| 2018 | $342K |
| 2022 | $361K |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-4 · Sources: https://modern-mba.com/case/cookies#sources

### And the reported figure flatters it

True profit per Mrs. Fields store before labor, after rent, supplies, and royalties. There is nothing left for payroll.

|  | US dollars |
| --- | --- |
| Reported gross | $361,497 |
| After royalties & supplies | $220,513 |
| After rent | $160,513 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-5 · Sources: https://modern-mba.com/case/cookies#sources

### Two completely different businesses, one brand

Mrs. Fields operating margins, selling cookies against franchising them. This is why the company stopped doing the first.

|  | Retail & gift | Franchising |
| --- | --- | --- |
| 1995 | 11% | 0% |
| 2005 | 6% | 69% |
| 2007 | 12% | 62% |
| 2018 | 14% | 78% |
| 2019 | 11% | 81% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-6 · Sources: https://modern-mba.com/case/cookies#sources

### The two who solved ticket size

Price of a single cookie, 2024. Levain turned a 2-ounce flat cookie into a 6-ounce softball and priced accordingly.

|  | US dollars |
| --- | --- |
| Levain | $5.77 |
| Crumbl | $4.50 |
| Insomnia | $3.75 |
| Mrs. Fields | $3.49 |
| Chick-fil-A | $2.15 |
| Subway | $1.29 |
| Wendy's | $1.20 |
| McDonald's | $1.19 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-7 · Sources: https://modern-mba.com/case/cookies#sources

### Which produces real revenue per store

Average revenue per store. Levain has only 17 locations and does not franchise; Insomnia reached 300.

|  | US dollars |
| --- | --- |
| Levain | $1,200,000 |
| Insomnia | $769,231 |
| Auntie Anne's | $768,780 |
| Cinnabon | $663,157 |
| Subway | $420,000 |
| Mrs. Fields | $361,497 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-8 · Sources: https://modern-mba.com/case/cookies#sources

### Crumbl's first years were extraordinary

Average revenue per Crumbl store. Weekly rotating flavors turned a cookie shop into a destination.

|  | US dollars |
| --- | --- |
| 2018 | $698,000 |
| 2019 | $1,316,002 |
| 2021 | $1,582,090 |
| 2022 | $1,769,339 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-9 · Sources: https://modern-mba.com/case/cookies#sources

### Better than running a McDonald's

Store-level operating margins, 2018. This is the number that recruited a thousand franchisees.

|  | Percentages |
| --- | --- |
| Crumbl | 30% |
| Mrs. Fields | 26% |
| Taco Bell | 24% |
| Popeyes | 23% |
| Burger King | 21% |
| McDonald's | 16% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-10 · Sources: https://modern-mba.com/case/cookies#sources

### Then the terms tightened

Non-refundable upfront payment required to operate. Crumbl's doubled from $25,000 to $50,000 in two years.

|  | US dollars |
| --- | --- |
| Crumbl | $50,000 |
| Burger King | $50,000 |
| Popeyes | $50,000 |
| McDonald's | $45,000 |
| Taco Bell | $45,000 |
| Mrs. Fields | $35,000 |
| Pizza Hut | $25,000 |
| Subway | $15,000 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-11 · Sources: https://modern-mba.com/case/cookies#sources

### And the royalty went to the top of the industry

Percentage of sales paid to the franchisor as royalties and marketing fees. Crumbl went from 10% to 12% in two years.

|  | Percentages |
| --- | --- |
| Subway | 12.5% |
| Crumbl | 12.0% |
| Popeyes | 11.0% |
| Pizza Hut | 10.8% |
| Taco Bell | 9.8% |
| McDonald's | 9.3% |
| Mrs. Fields | 9.0% |
| Burger King | 8.5% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-12 · Sources: https://modern-mba.com/case/cookies#sources

### Sales came back down

Average annual revenue per Crumbl store. Saturation arrived within five years of the first franchise.

|  | US dollars |
| --- | --- |
| 2018 | $698,000 |
| 2019 | $1,316,002 |
| 2021 | $1,582,090 |
| 2022 | $1,769,339 |
| 2023 | $1,100,536 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-13 · Sources: https://modern-mba.com/case/cookies#sources

### The squeeze, line by line

Average Crumbl gross margin against store-level operating margin. Staff are on minimum wage, so this is markups on supplies.

|  | Gross margin | Operating margin |
| --- | --- | --- |
| 2018 | 60% | 30% |
| 2019 | 45% | 22% |
| 2021 | 45% | 18% |
| 2022 | 42% | 14% |
| 2023 | 39% | 10% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-14 · Sources: https://modern-mba.com/case/cookies#sources

### Back where Mrs. Fields already was

Average net profit take-home per store after rent, supplies, and labor.

|  | US dollars |
| --- | --- |
| Burger King | $205,000 |
| Mrs. Fields | $160,513 |
| McDonald's | $150,000 |
| Crumbl | $114,549 |
| Subway | $65,000 |
| Cinnabon | $47,554 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-15 · Sources: https://modern-mba.com/case/cookies#sources

### While corporate went the other way

Crumbl corporate operating margin against the average store's. The franchisees are not the customers of this business.

|  | Corporate margin | Store-level margin |
| --- | --- | --- |
| 2019 | 6% | 30% |
| 2020 | 20% | 22% |
| 2021 | 48% | 18% |
| 2022 | 48% | 14% |
| 2023 | 34% | 10% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-16 · Sources: https://modern-mba.com/case/cookies#sources

### The copycats charge the same money

Non-refundable upfront franchise fee by brand. Comparable fees for far fewer locations and weaker brands.

|  | US dollars |
| --- | --- |
| Bang Cookies | $55,000 |
| Crumbl | $50,000 |
| Dirty Dough | $49,500 |
| Chip City | $40,000 |
| Mrs. Fields | $35,000 |
| Crave | $29,500 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-17 · Sources: https://modern-mba.com/case/cookies#sources

### And none of them reach Crumbl's volume

Average revenue per store based on the most recent franchise disclosures.

|  | US dollars |
| --- | --- |
| Crumbl | $1,100,536 |
| Chip City | $875,000 |
| Crave | $855,964 |
| Bang Cookies | $612,754 |
| Dirty Dough | $461,564 |
| Mrs. Fields | $361,497 |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-18 · Sources: https://modern-mba.com/case/cookies#sources

### Rent is what kills a cookie business

Cookie Good operating margin from home kitchen to rented kitchen to storefront. Margins are highest baking at home.

|  | Percentages |
| --- | --- |
| 2008 at home | 20% |
| 2009 | 58% |
| 2010 | 53% |
| 2011 rental | 14% |
| 2012 | 14% |
| 2014 storefront | 17% |
| 2017 | 12% |
| 2019 | 18% |
| 2021 | 13% |
| 2023 | −1% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-19 · Sources: https://modern-mba.com/case/cookies#sources

### So one of them refused a lease entirely

Bake Some Noise operating margin, home kitchen to Volkswagen bus. Four classic cookies, no storefront, no rotation.

|  | Percentages |
| --- | --- |
| 2021 online launch | 30% |
| 2022 pivot from drops | 25% |
| 2023 | 20% |
| 2024 bus launch | 35% |

Source: Modern MBA, “Why Crumbl won't last”, aired November 2024. Chart: https://modern-mba.com/case/cookies#chart-20 · Sources: https://modern-mba.com/case/cookies#sources


## Takeaways

1. **Mrs. Fields** built the format and then proved its ceiling. It went from **1** store in 1977 to **780** by 1993 — and store-level margins at founding were genuinely good, **20%** against **21%** at **McDonald's**, **16%** at **Taco Bell** and **Starbucks**, **15%** at **Pizza Hut**, and **14%** at **KFC**.
2. The problem was never margin, it was ticket size. The average **Mrs. Fields** grossed **$353,000** in 2000 against **$1,600,000** at **Starbucks**, **$1,393,388** at **McDonald's**, **$944,000** at **Subway**, and **$823,000** at **KFC**. You can only charge so much for one cookie.
3. Twenty-two years later that number has not moved: **$353K**, **$357K**, **$321K**, **$283K**, **$319K**, **$342K**, **$361K**. The average **Mrs. Fields** grosses less today in real terms than it did at the turn of the century.
4. And the reported figure flatters it. On **$361,497** of gross, an owner keeps **$220,513** after royalties and dough costs, then **$160,513** after rent — before any payroll. Which is why a Mrs. Fields today is usually staffed by one person, and that person is the franchisee.
5. So the company stopped selling cookies and started selling franchises. Under private equity it bought **Pretzel Time**, **Hot Sam's**, and **TCBY**, and profits went from **−$3M** and **−$5M** to **$36M**, **$32M**, and **$29M** — earnings shrank while profits quadrupled, because the customer became the franchisee.
6. The margin split says it outright. Selling cookies at retail and by gift tin runs **6%** to **14%**. Franchising the same product runs **69%**, **62%**, **78%**, and **81%**. These are two completely different businesses wearing one brand.
7. **Levain** solved the ticket-size problem instead, by changing the product. It turned a 2-ounce flat cookie into a 6-ounce softball and now charges **$5.77** — the highest in the category — grossing roughly **$1.2 million** per store. But it has only **17** locations, does not franchise, and expanded slowly on purpose to avoid diluting the brand.
8. **Insomnia** solved it with occasion and location — late-night delivery from college campuses — reaching **300** stores and **$769,231** per store. Between them the two proved the format could support a real number, which is the opening Crumbl walked into.
9. **Crumbl** took both lessons and added a third. Oversized photogenic cookies like Levain, campus first like Insomnia, and then weekly rotating flavors — a page from fashion, where scarcity beats consistency. Limited-time flavors create urgency and repeat visits, and turn a cookie shop into a destination rather than a pit stop.
10. It worked spectacularly at first. Average store revenue went **$698,000**, **$1,316,002**, **$1,582,090**, **$1,769,339** — and store-level operating margin hit **30%**, higher than **Mrs. Fields** at **26%**, **Taco Bell** at **24%**, **Popeyes** at **23%**, **Burger King** at **21%**, and **McDonald's** at **16%**.
11. That performance is what recruited the franchisees: **1**, **15**, **55**, **327**, **689**, **970**, **1,068** stores. Running a Crumbl was cheaper, easier, and more profitable than running a McDonald's — and the whole expansion was funded by operators, not by corporate.
12. Then the terms tightened. The non-refundable upfront fee went from **$25,000** to **$50,000** in two years, level with **Burger King**, **Popeyes**, and **McDonald's** and more than triple **Subway's** **$15,000**. Royalties went from **10%** to **12.0%** — above **McDonald's** at **9.3%**, **Mrs. Fields** at **9.0%**, and **Burger King** at **8.5%**.
13. The rebates are where it gets specific. Crumbl's own disclosures describe a **2%** administrative fee on everything franchisees buy, roughly **12 cents** a pound back on chocolate, **$4.29** per case rebates, **50 cents** a case on cereal, and a **1–2%** cut on primary food supply — about **$32 million** a year, collected through an affiliate LLC. Franchisees also pay **3%** on card transactions where the processor charges Crumbl **2.37%**.
14. The squeeze is visible in the accounts. Average store sales fell from **$1,769,339** to **$1,100,536**, gross margin from **60%** to **45%**, **42%**, and **39%**, and store operating margin from **30%** to **22%**, **18%**, **14%**, and **10%**. Since most stores run on minimum-wage staff, that drop is markups on supplies rather than overhiring.
15. Which lands the average franchisee back where **Mrs. Fields** owners already are: net take-home per store of **$114,549** at **Crumbl** against **$160,513** at **Mrs. Fields**, **$150,000** at **McDonald's**, **$205,000** at **Burger King**, and **$47,554** at **Cinnabon**. Meanwhile corporate revenue went **$4M**, **$13M**, **$47M**, **$140M**, **$152M**, with company margins above **30%** while store margins fell to **10%**.
16. The independents are the control group. **Cookie Good** in Santa Monica has run crazy rotating flavors since 2008 — Crumbl before Crumbl — and grew from **$26,608** at home to **$1,067,791**, but its margin fell from **58%** baking at home to **−1%** last year, because rent is what kills this business rather than ingredients or labor. **Bake Some Noise** answered that by refusing a lease entirely: four classic cookies sold out of a 1972 Volkswagen bus, **$210,000** a year at a **35%** margin — the same margin Crumbl earns as a franchisor.

## Common questions

### How does Crumbl make money?

Not from cookies. Corporate revenue comes from franchisees: a $50,000 non-refundable upfront fee, 12% of sales in royalties and marketing, and a large layer of supplier rebates. Crumbl's own franchise disclosures describe a 2% administrative fee on everything franchisees purchase, roughly 12 cents per pound back on chocolate, $4.29 case rebates, 50 cents per case of cereal, and a 1–2% cut on primary food supply — about $32 million a year collected through an affiliate LLC. Franchisees also pay 3% on every card transaction while the processor charges Crumbl 2.37%. Corporate revenue went from $4 million in 2019 to $152 million in 2023.

### Is owning a Crumbl franchise profitable?

Much less than it was. In 2018 the average store grossed $698,000 at a 30% store-level operating margin — better than McDonald's, Burger King, or Taco Bell. By 2023 average sales had fallen to $1,100,536 from a peak of $1,769,339, gross margin had gone from 60% to 39%, and store operating margin from 30% to 10%. Net take-home per store is now about $114,549, against $160,513 for a present-day Mrs. Fields, $150,000 for a McDonald's, and $205,000 for a Burger King. The franchisee is going backwards while the franchisor surges.

### What happened to Mrs. Fields?

It hit the ceiling every cookie shop hits and then changed business model. It grew from one store in 1977 to 780 by 1993 with genuinely healthy 20% store margins, but the average store only grossed $353,000 — a third of a Starbucks — because you can only charge so much for a single cookie. After a 1990s cash crunch it was taken over by private equity, which bought Pretzel Time, Hot Sam's, and TCBY and shifted the company from selling cookies to selling dough and collecting royalties. Earnings shrank and profits quadrupled. Today the average store grosses about $361,000, less in real terms than in 2000, and store count has fallen to roughly 125.

### Why do cookie shops struggle to scale?

Because order sizes are small and rent is fixed. Margins are highest baking at home in small batches — Cookie Good ran 58% that way in 2009 and −1% last year with a storefront — and it is the overhead of brick-and-mortar rather than ingredients or labor that kills the economics. That is why bootstrapped mom-and-pops rarely get past one store, why Levain has only 17 locations and does not franchise, and why real profit at scale in this category only ever comes from franchising other people rather than from selling cookies yourself.

### How is Crumbl different from Levain or Insomnia?

It combined both and added rotation. Levain changed the product — a 6-ounce cookie that supports a $5.77 price and roughly $1.2 million per store — but stayed at 17 locations to protect the brand. Insomnia changed the occasion, going late-night from college campuses to 300 stores at $769,231 each. Crumbl took the oversized photogenic cookie, the campus start, and then added weekly rotating flavors borrowed from fashion, where scarcity drives retention better than consistency. That turned the shop into a destination rather than a pit stop — and it was designed from day one to franchise.

### Are Crumbl's competitors any different?

No, and their fees say so. Chip City, Bang, Dirty Dough, and Crave charge upfront franchise fees of $40,000, $55,000, $49,500, and $29,500 against Crumbl's $50,000 — comparable money for significantly fewer locations and weaker brands. They all run weekly rotations, cross-sell whatever fits the space, use drops to drive footfall, and push mobile apps. Like Crumbl, they want franchisees buying marked-up ingredients week after week rather than simply paying royalties.

## Discussion

- Mrs. Fields went from one store to 780 and became a mall institution; today the average location grosses less in real terms than in 2000. Famous Amos and David's retreated to grocery shelves. Why does the cookie keep selling while every brand on top of it cools?
- Crumbl ran the same arc faster — one store in 2017 to over 1,000 by 2024 on weekly rotating flavors. Does speed make the ending more likely, or just sooner?
- Weekly rotating flavors lifted from fashion drops create urgency. What happens to a business when novelty is the product and novelty is the thing that wears out?
- If the pattern is this reliable, why does capital keep funding the next cookie brand? What is being bought?
- You own a Crumbl franchise today. What is your exit, and when?

## Sources

Store counts, revenue per store, gross and operating margins, franchise fees, and royalty rates from Crumbl, Mrs. Fields, Insomnia, Chip City, Bang, Dirty Dough, and Crave Franchise Disclosure Documents and filings for the years shown; supplier rebate and credit card processing terms quoted from Crumbl's own FDD; store-level revenue and margins disclosed on camera by the owners of Cookie Good and Bake Some Noise; Levain figures are estimates

---

From [Modern MBA](https://modern-mba.com/). Read this case in full at [https://modern-mba.com/case/cookies](https://modern-mba.com/case/cookies), or watch the episode at https://www.youtube.com/watch?v=Ha2oNXDZuSg.