For all potential investors interested in launching the Crumbl franchise, we have composed an in-depth breakdown of the initial investment cost and profit/salary these cookie stores deliver to their owners per year.
Key Takeaways:
- Sawyer Hemsley and Jason McGowan founded Crumble Cookie in 2017, and since then, they have supervised the opening more than 400 franchised locations in the U.S.
- In 2021 this brand opened 185 new franchised locations, which makes this company the highest growing cookie brand in the world.
- Starting a new Crumbl franchise has an initial investment cost between $347,666 and $691,783 with a $50,000 Initial Fee.
- The owners of these cookie stores are obligated to pay 10% of all gross sales for the costs associated with ongoing franchisor royalties.
- An average earning Crumbl franchise makes approximately $1,700,000 in gross sales per year with a 15% profit margin.
- Crumbl franchise owner that is operating an average gross earning location can expect to make approximately $250,000 in salary per year.
How Much Does The Crumbl Franchise Cost
The launching new Crumbl franchise has an initial investment cost between $347,666 and $691,783 with included Initial Fee, which is currently $50,000 per store.
The most significant outlay that every investor will need to bear are costs associated with leasehold improvement of the store location; the range of investment will be between $75,000 and $250,000. The actual outlay depends on the store’s size (square feet).
Also, we must mention expenses associated with Initial Tech and Equipment package, which are between $23,300 and $167,650 per store. This package includes all necessary working equipment these stores must have on-premise to start a business.
Table of initial costs:
- Initial Fee: $50,000
- Initial Tech and other Equipment Package: $23,300 – $167,650
- Initial training fee + other expenses during training: $20,000 – $30,000
- Real Estate Improvements: $75,000 – $250,000
- Rent: $16,666 – $83,333 – for first 3 months
- Professional fees: $8,000 – $15,000 – architects, engineers, accountants fees
- Equipment, furniture, fixtures, décor, and supplies: $75,000 – $100,000
- POS, computer hardware, and software systems: $3,500 – $8,000
- Signs: $6,500 – $15,000
- Misc. opening costs: $2,500 – $5,000
- Opening inventory: $5,000 – $10,000
- Additional funds: $10,000 – working capital for the first three months
- ESTIMATED TOTAL INVESTMENT COST: $347,666 – $691,783
Options To Fund Crumbl Franchise Initial Investment Cost
As a company, the franchisor does not offer direct or indirect financing nor guarantee a note, lease, or obligation for acquiring funding. So investors will need to search for a third-party financing option, such as the SBA franchise loan program.
Crumbl Franchise Fees
Initial Fees
All Crumbl franchisees are required before signing a franchise agreement to pay $50,000 of the Initial Fee, $10,650 to $12,650 for the Tech Equipment Package Fee, and an Initial Training fee of $8,000
This franchisor before has charged for Initial Fee price of only $25,000; however, since mid-2022, they have doubled this sum, so the new cost is $50,000.
Initial Tech Equipment Package Fee includes the cost of purchasing iPads, televisions, and other technological equipment required to operate a cookie business.
Besides paying the Initial Training Fee of $8,000, investors will need to pay also all travel, lodging, food, and other expenses that its attendees will have; this adds a few thousand dollars to the costs associated with training.
Ongoing Fees
Franchisor royalties
The Crumbl franchisees are obligated to pay 10% of all gross sales that stores make for the operating costs associated with franchisor royalties. It is an ongoing expense that must be paid every month during the whole duration of the agreement.
The Royalty Fee is 8%, and the Marketing Fee is 2% of gross revenue; these two fees are 10% of gross sales!
Also, franchisees are obligated to pay and costs associated with the so-called” Technology Fee” which this franchisor currently charges $500 per month.
Rent Fee
Crumbl franchises usually operate in a leasehold between 1,400 and 2,000 square feet, so franchise owners can expect to pay between $4,000 to $10,000 per month to the landlord for store space!
The precise rent price depends on where the business’s location will be, so it is best for every investor that this expense count according to the condition of leasing real estate in its desired geo area.
How Much Is Crumbl Franchise Profit
To determine the overall profit potential of owning the Crumble franchise, we will reveal the average gross sales these cookie stores make per year per location. Also, we will display how much expected profit margin the owner of this brand store can expect.
Crumbl Store Average Gross Revenue Per Year
Crumble franchises produce high sales; on average, these cookie stores make approximately $1,700,000 to their owners in gross sales per year per location.
However, potential franchisees must know that this is an average that this franchising concept delivers if we combine all their franchise’s gross revenue and split it with a number of locations!
We have data that the highest earning Crumble franchise location has $3,639,139, and the lowest earning has made $734,278 in gross sales in 2021. These are excellent results, especially if we know that this young brand still makes its name in the franchising industry.
Crumbl Franchise Profit Margin
Crumble franchises can deliver at least 15% of the profit margin from all stores’ sales annually. This brand sells cookies and ice creams, which are high-margin products!
Usually, franchisees in the food franchising industry can expect to make between 6% to 9% of profit margin, which means that this brand, with a 15% margin that the owner can expect to make, has exceeded the industry average.
How Much is Crumbl Franchise Owner Salary
The Crumbl franchise owner that is operating an average gross earning location can expect to make approximately $250,000 in salary per year.
However, if we apply data that we have collected about the lowest and highest earning Crumbl store, we can estimate that this cookie brand franchise owner’s salary will be between $110,000 and $545,000 per year!
This is one of the most profitable franchises currently available on the market. Consider that owners in the franchising industry usually can make approximately a salary of $60,000 per year!
How We Estimate Crumbl Franchise Owner Salary Per Year
We have collected all financial data regarding Crumbl franchise profitability from this brand Franchise Disclosure Document. This brand has revealed in this document the average Gross Sales, Gross Profit, and Net Profit that the location produces.
Let’s see what Crumbl FDD(2022) has revealed to us by breaking down the statistic from this company’s financial data!
Financial data regarding 140 locations:
- Average gross sales: $1,687,731
- Highest earning unit: $3,639,139
- Lowest earning unit: $734,278
Data regarding operating costs:
- The average sales level was $1,687,731
- Gross Profit: $749,555 (after deducting the cost of making products)
- Net Profit: $357,512 (Gross profit – payroll costs, tax, etc)
Franchisor has stated that they have collected this financial data on 140 of their locations that operated continuously for the 2021 calendar year; 48 locations (approx. 34%) met or surpassed the average total gross revenue!
Is it Profitable to Own Crumbl Franchise?
It is very profitable to own Crumbl franchises because these stores produce high gross sales with a good profit margin. With an estimated salary of $170,000, these brand store owners can make three times more than the average Profit for the franchising industry is.
Also, with the expected Return Of Investment (ROI ) time being between 3 to five years, this franchising opportunity represents one of the better investment choices if we see how much initial costs are and how much Profit can be made after opening.
What Are Crumbl Franchise Requirements
Capital requirement
The franchise applicants must have in cash(liquid assets) at least $150,000 available for investing if they want to be approved as a new owner by this franchisor.
Owner participation in business requirement
The new franchise owner must personally participate in the direct operation and supervision of his Crumble cookie store full-time for at least the first 60 days of operation. After that, it is possible to hire an operating manager to run daily in-store operational tasks.
If the franchise owner opts to outsource his store’s managing position, the manager must be certified by the franchisor; that is, he must take initial training!
Also, store managers must have at least a 5% profit-sharing interest in franchise business upon hiring.
The franchisor has this requirement because this will secure that the manager works at his full capacity. After all, the store’s better performance will bring the manager more Profit!
However, this doesn’t mean that you, as a franchisee, don’t need to work anything! The franchise owner must supervise the store manager regularly to be able to make changes at a time if some bigger business operating problem occurs.
Working hours Requieremnt
Franchisees must have their Crumbl stores open for min. of six days per week from 8:00 a.m. until midnight throughout the year.
Every investor must be aware of this requirement because it will be necessary to hire an appropriate number of employees to fulfill the minimum working hours that this franchisor demand!
Minimum sales requirement
Every franchise location must make a minimum of $100,000 in annual gross sales. For owners who fail to meet this requirement, the franchisor will help by creating a sales performance plan, and it will give a specific period in which the franchisee must increase sales.
This is an essential requirement because if you, that is, your franchise, don’t meet the minimum gross sales per year, it is very likely that the franchisor will terminate the franchise agreement!
Franchisee Training
The franchise owner and manager(if it is hired) are required to complete the initial training program, which is consisted of the online self-guided training course, in-person training conducted by franchisor trainers in class, and in-person training conducted by field trainer at the store for around 7 to 10 days.
The initial training lasts approximately 100 hours, split between classroom and on-the-job training!
How Much Is Crumbl Franchise Agreement Duration
The Crumbl franchise agreement lasts five years; after that, franchisees, if they meet all franchisor requirements, can renew it for another five years for free!
Possibilities to Terminate Franchise Agreement
If the franchisee wants to terminate the agreement before the term expires, it will need to pay a certain sum of money to the franchisor.
- Franchisees who want to terminate the franchise agreement in the first or second year after signing must pay the franchisor $25,000 of the release fee.
- Franchisees who want to terminate the franchise agreement after two years of operating must pay the franchisor $15,000 of the release fee.
After the termination of the franchise agreement is closed, the former owner can’t operate a competing similar cookie business for three years within 25 miles of his former territory or within 25 miles of any other Crumbl® franchise.
Are All Crumbl’s Franchises
This franchisor only has one company-own store; all other Crumbl stores are franchises that are owned and operated by franchisees!
Who Owns Crumbl
Jason McGowan and Sawyer Hemsley, entrepreneurs from Utah, are founders and owners of the Crumble.
This brand currently operates and offers franchise opportunities to interested investors thru they company Crumbl Franchising, LLC, where McGowan is the CEO and Hemsley is the COO of this business entity.
Who is Sawyer Hemsley
Sawyer Hemsley is an entrepreneur from Utah who is a Founder and CEO of Crumble. He and Jason McGowan opened the first cookie store in 2017, and since 2018, they have started expanding this brand thru franchising.
Hemsley developed Crumbl franchising system from the ground up when he was actively involved with the day-to-day operation of a company-owned location in Logan, Utah. Also, he is currently the executive officer in charge of franchisees’ training, which means that he is still very active in operating his business.
Sawyer is actively involved in the training of his franchisees, which means that franchise applicants learn about this system of business firsthand, that is, from its owner!
Summary
When we compare Crumbl franchise cost and the potential Profit these stores deliver, we can see why this brand has started expanding rapidly in the U.S market.
This will be an ideal franchising opportunity for investors who want to try their luck in the bakery business and benefit from the high-profit margins that baked goods make.