Episode 21: Crumbl Went Viral… So Why Are Stores Closing?

0:00 But now we're seeing reports of declining store sales, fewer customer visits, and locations closing. Followers are not customers. Views are not revenue. And impressions are definitely not profit. Because excitement fades and the bills don't. Did Crumbl build a great business or did it build a great social media phenomenon? Every result has a price. Every goal requires a choice. Comfort keeps you where you are. Discipline takes you where you want to go. Welcome to Discipline Over Comfort with Bob Terrio.

0:33 Real world conversations on leadership, business, marketing, and execution. Let me ask you something. Have you ever seen a business become so popular so fast that you started wondering if it can possibly even last? Because that's exactly what I've been thinking about with Crumbl Cookies. You know Crumbl, the big cookies, the pink boxes, the weekly flavors, and those videos where somebody takes one bite of a cookie, closes their eyes, and acts like they've just discovered the greatest thing in human history.

1:04 Come on, you know what I'm talking about. And look, I'm not knocking the cookies. I'm not here to tell you whether they're good or bad. That's a matter of personal taste. What fascinates me is the business because Crumbl did something that thousands of companies spend millions of dollars trying to accomplish. They made their product go viral. They turned a cookie into an experience. They got people talking, sharing, reviewing, and standing in line. And for a while, it seemed like every time you turned around, there was another Crumbl opening somewhere.

1:39 But now we're seeing reports of declining store sales, fewer customer visits, and locations closing. And that brings me to a question I think every business owner should be asking. Did Crumbl build a great business or did it build a great social media phenomenon? Because those aren't necessarily the same thing. And I think that's where this story gets very interesting. Today, we're gonna talk about what Crumbl got right, what might have gone wrong, and why some of the smartest marketing in the world can't rescue a business if the fundamentals aren't working.

2:13 And I'm gonna challenge some of the thinking around growth, leadership, and customer loyalty because sometimes the most dangerous thing that can happen to a business is becoming successful before you're actually ready for it. Welcome to episode twenty-one of Discipline Over Comfort. Let's get into it. First, I wanna give Crumbl credit because I think it's important that we do that. Too often when businesses start struggling, everybody suddenly becomes an expert on everything the company did wrong.

2:41 That's easy to do after the fact. But let's remember what Crumbl accomplished. This company started in Utah back in two thousand and seventeen. Two cousins, Jason McGowen and Sawyer Hemsley, had an idea for a cookie business. Now cookies aren't exactly a new invention. We've had cookies for a pretty long time, and I'm fairly certain nobody was sitting around in two thousand seventeen saying, "You know what this country desperately needs? Another cookie store." But they didn't just sell cookies. They created a system that made people pay attention.

3:12 Every week, new flavors. Every week, a new reason to come back and see what's available. And then they package everything in those recognizable pink boxes. Think about how smart that was. If somebody walked into an office carrying that box, people knew what was in it. You didn't even need to see the logo. That's branding. And then social media took it to another level. People started reviewing the weekly flavors. They filmed themselves opening the box. They ranked the cookies. They'd argue over which flavor was the best.

3:43 Some people loved them. Some people thought they were overrated. But here's the beautiful thing from a marketing standpoint. People were talking, and a lot of the conversation wasn't being created by Crumbl's marketing department. It was being created by customers. Now as somebody who spent more than thirty years in marketing, I can tell you that that's something companies dream about. Getting customers to create content about your product, that's powerful. But Crumbl took it one step further. They made their product part of a weekly conversation, and that meant people weren't just buying a cookie.

4:17 They were participating in something. They wanted to know what everybody else was talking about. They wanted to try the new flavor. They wanted to have an opinion. That's not accidental. That's a very smart marketing strategy. And I don't think we should minimize what Crumbl accomplished. They understood something that a lot of traditional businesses still struggle with. Today, your product doesn't just compete on the shelf. It competes for attention, and Crumbl was exceptionally good at getting attention.

4:46 But here's where I wanna challenge the strategy. Getting attention is one thing. Keeping customers is completely another thing. And that brings us to the part of this story that should make every marketer a little bit uncomfortable. Let me ask you a question. Have you ever bought something simply because everybody was talking about it? Of course you have. We've all done it. Maybe it was a restaurant, maybe it was a pair of shoes, maybe it was some gadget you saw online. You saw enough people talking about it and eventually thought, "All right.

5:16 I've gotta see what this is about." That's human nature, and there's nothing wrong with that. But from a business perspective, there's a big difference between somebody trying your product and somebody deciding they can't live without it. Think about Crumbl's weekly flavors. It's a brilliant idea. New flavors create excitement. They create urgency. They give customers something to anticipate, but they also create a challenge. What happens when somebody stops caring about the new flavor? What happens when the excitement wears off?

5:45 What happens when a customer says, "You know what? I've tried enough of these cookies That's the question. Because if your business depends on constantly creating something new to get people through the door, you're putting an enormous amount of pressure on yourself. Every week has to be exciting. Every launch has to get attention. Every flavor has to give people a reason to talk. And eventually you have to ask, are we building loyalty, or are we just constantly trying to create another first impression?

6:13 Now, I want to be careful here. We don't have Crumbl's complete internal customer retention data, so I'm not going to sit here and tell you that I know exactly how often their customers return. I don't. But I do know this. The distinction between trial and repeat business is one of the most important things any company can understand, and I see businesses confuse the two all the time. They'll tell me how many people saw their advertisement, how many people liked their post, and how many followers they've gained.

6:43 And I'll say, "Okay, that's great, but how many of those people actually became customers?" And then I'll ask the next question, "How many of them came back?" Because that's where the real conversation begins. Followers are not customers. Views are not revenue. And impressions are definitely not profit. Now, don't misunderstand me. Those numbers matter. Awareness matters. Brand recognition matters. Social media matters. I make my living helping businesses understand and use those things. But they're not the finish line.

7:15 They're the beginning of the process. And if you don't connect them to an actual business result, you're just collecting impressive-looking numbers. That's not a strategy. That's a scoreboard without a game plan. And I think Crumbl's story gives us a great opportunity to talk about that because it appears the brand was very good at generating excitement. The question now is whether the business can generate enough consistent demand to support the footprint it created, and that's a much harder challenge.

7:44 Now, let's talk about some numbers, and I promise I'm not going to turn this into an accounting class. Uh, but these, these numbers matter. According to reporting based on Crumbl's franchise disclosures, the company had more than eleven hundred franchise stores at the end of twenty twenty-five. That's an extraordinary amount of growth for a business that started in twenty seventeen. But here's where things get very interesting. Average annual gross sales per store reportedly fell from approximately one point three five million in twenty twenty-four to about one point one four million in twenty twenty-five.

8:20 That's a decline of roughly sixteen percent. Now, let's be fair. A store generating more than a million dollars in annual sales is not automatically a bad business, not even close. But if you're a franchise owner and your sales are declining while your operating expenses remain high, you've got a problem you need to manage because your landlord doesn't give you a discount just because fewer customers came through the door. Your employees still need to get paid. You still got ingredients to purchase.

8:50 You still got equipment to maintain. You still got utilities, insurance, and all the costs of running a business, the fixed cost. And that's before we even get into franchise-related expenses. So when I hear somebody say, "The store does a million dollars in sales," my first question is pretty simple. How much does the owner actually keep? Because revenue is not profit, and this is something I think people forget when they look at franchise opportunities. They see a recognizable brand, they see the lines, they see the social media buzz, and they start imagining what the business could be worth.

9:25 But the real question isn't whether the brand is popular. The real question is whether the economics work. And I think that's where Crumbl deserves a serious examination. Not because every store is failing. That's not what the evidence says. But because declining sales and reported closures tell us that at least some of the locations are under pressure, and that should make anyone considering a franchise ask a lot more questions. How much does it cost to open? What are the ongoing fees? What's the typical operating margin?

9:57 How much does labor cost? How often do customers return? And what happens if sales fall another ten or fifteen percent? Because that's what a disciplined investor asks, not how many views did your last TikTok get, but show me how this business makes money. And if you're not willing to ask those questions before investing, you may find yourself asking them after it's too late. But here's where I think this story becomes a leadership conversation because rapid growth can be intoxicating, and I mean that.

10:27 When your business is growing, everybody wants more. More locations, more markets, more revenue, more headlines, more recognition. And the people around you are constantly telling you how successful you are. Think about how difficult it must be for a CEO to say, "You know what? Maybe we need to slow down," especially when franchisees want to open new locations, investors want growth, customers are excited, and your competitors are watching. Slowing down can feel like losing momentum. But sometimes slowing down is exactly what a business needs.

11:01 Let me put it this way. Imagine you got a restaurant that's doing extremely well. Every night there's a line out the door. People love the food. Everybody's talking about it. So you decide to open a second location and then a third and then a fourth. Pretty soon you're opening stores all over the place. But here's the problem. You haven't figured out whether the first location's success can be repeated everywhere. Maybe the original location had the perfect neighborhood. Maybe the customer demographics were ideal.

11:31 Maybe the novelty was driving demand. Maybe the operating team was exceptional. And now you're trying to replicate the success in markets that don't necessarily behave the same way. That's a risk, and it's one that every expanding business needs to understand. Now, I'm not saying that's exactly what happened at Crumbl. We need much more location-level data to prove that, but I think that's a fair question to ask. Did the company expand faster than long-term demand could support? Because once you open a franchise location, you're making a commitment.

12:03 You're committing to a lease. You're committing to employees. You're committing to a community. And in many cases, you're asking somebody to invest a substantial amount of money. That's not something you should do simply because your brand is trending. And here's the uncomfortable part. Growth is not always evidence of strength. Sometimes growth exposes weaknesses that were already there, and when the excitement starts fading, those weaknesses become a lot harder to ignore. You know who I keep thinking about in this story?

12:34 The franchise owner. Not the people on TikTok reviewing the cookies, not the people arguing about whether one flavor is better than the other. I'm thinking about the person who invested their money to open one of these stores. Maybe they had a successful career and wanted to become an entrepreneur. Maybe they saved for years. Maybe they borrowed money. Maybe they believed they were getting into a growing business with an incredible brand. And let's be fair, there are risks with every franchise. Nobody guarantees you're gonna make money, and franchise owners are responsible for running their business effectively.

13:09 But I think we have to acknowledge the responsibility of the company selling the franchise opportunity because when you're promoting a business model to potential investors, you have an obligation to be transparent about the risk. You need to help them understand what they're getting into, and you need to be careful about expanding into markets that may not support the concept. Now, I want to make something very clear. I'm not accusing Crumbl of misleading franchisees. I haven't seen evidence that would justify making those accusations.

13:40 But I do think that reported closures and declining sales raise important questions about the long-term economics of the model, and that's worth discussing because here's something I believe strongly. Leadership isn't just about making decisions that benefit the company at the top. It's also about understanding how those decisions affect the people who trusted you enough to invest in their business. And that brings me to a question. When a franchise system struggles, who carries the greater responsibility, the franchise owner who operates the location or the corporate leadership that designed and expanded that system?

14:17 I think the answer is probably both, but I also think corporate leadership has an enormous responsibility to make sure that the model is something more sustainable than excitement because excitement fades, and the bills don't. But here's another part of this story that caught my attention. Crumbl experimented with dirty sodas, and if you're not familiar with that, we're talking about sodas mixed with things like flavored syrups and cream. It became a popular category in certain markets. And on the surface, I understand the idea.

14:47 You're selling cookies. You want customers to buy a drink with their cookies. That can increase the average transaction. It can give people another reason to visit. It makes sense to at least explore. But reports suggest Crumbl's dirty soda promotion didn't deliver what leadership hoped that it would. And that brings me to another question. When your core business is facing pressures, should you be chasing the next trend, or should you be focused on strengthening what made you successful in the first place?

15:18 Now, I'm not against innovation. Quite the opposite. Businesses have to innovate. They have to adapt. They have to understand changing consumer preferences. But innovation and distraction are two very different things, and sometimes companies confuse them. They think that because something is popular somewhere else, they need to add it to their business. But every new product creates complexity, new ingredients, new equipment, new training, new operating procedures, and potentially new problems.

15:48 Before you add something, you've got to ask whether it's really going to improve the business or whether you're just hoping to create another moment of excitement because here's something I've learned. You can't fix a weak foundation by adding another floor, and sometimes the most disciplined decisions a business can make is to stop adding things and start getting better at what it already does. Now, one of the most interesting developments in this entire story involves Crumbl's leadership. According to recent reporting, CEO Jason Macowan told franchisees that the company's current difficulties were his fault.

16:25 And I want to give him credit for that because I respect a leader who's willing to take responsibility, especially publicly. It's not easy. It's much easier to blame the economy, blame the customer, blame the competition, blame the franchise owners, blame anybody except yourself. So when a leader stands up and says, "This is on me," I think that deserves recognition. But here's why I want to challenge that thinking. Taking responsibility is not the same thing as fixing the problem. It's just the beginning, not the end.

16:58 And I think that's something every leader needs to understand. It's one thing to say, "I made a mistake." It's another thing to explain what you're gonna do differently. What decisions are going to change? What are you gonna stop doing? What are you going to prioritize? How are people going to help the people who are affected? Because accountability without action doesn't accomplish very much. And this isn't just about Crumbl. This applies to every business. I've worked with leaders who are very good at acknowledging problems.

17:30 They say all the right things. They hold meetings. They make promises. And then six months later, nothing had changed. That's not accountability. That's a conversation. Real accountability requires action. And sometimes those actions are uncomfortable. Maybe you have to slow expansion. Maybe you have to rethink your product strategy. Maybe you have to make changes to the leadership team. Maybe you have to admit that something you believed in isn't working anymore. Those are difficult decisions, but that's what leadership requires.

18:02 And that's why I always come back to the same principle, discipline over comfort. Because comfort tells you to protect your ego, discipline tells you to confront reality. Let me put my marketing executive hat on for a minute. If I were sitting in a leadership meeting at Crumbl, here's where I'd wanna focus. And again, this is based on publicly reported information. I don't have access to their internal financial statements or customer data. So these are the questions I'd ask, not claims that the company isn't already working on them.

18:35 First, I'd wanna understand the customer, not just how many people are buying cookies. I wanna know how often they're coming back. I can't stress this enough. Are we losing customers? Are they visiting less frequently? Are they spending less per visit? Are certain flavors driving repeat business? Are some locations performing dramatically better than others? And if they are, why? Because until you understand what's happening with your customers, you're just guessing. And I don't like guessing when we're talking about business decisions.

19:07 Second, I'd want to understand the franchise economics. Which stores are profitable? Which stores are struggling? What do the best-performing locations have in common? Are there markets where we've opened too many stores? Are our operating costs creating unnecessary pressure? Because if franchise owners aren't making money, the system has a problem. And third, I'd wanna rethink how we measure marketing success. Yes, keep creating great content. Yes, keep generating excitement. Yes, keep using social media.

19:40 That's one of Crumbl's biggest strengths. But I want every marketing campaign connected to a business objective. Are we bringing back customers who haven't visited in a while? Are we increasing purchase frequency? Are we improving customer satisfaction? Are we generating profitable sales? That's what marketing should ultimately help accomplish. And here's one more thing I'd say in that meeting. We don't need to be the most talked about cookie company every single week. We need to be a cookie company that customers still wanna visit five years from now.

20:15 That's a very different mindset, and I think it's the mindset that separates brands that experience a moment from brands that build a legacy. So what can we learn from all of this? I think there are three big lessons, and whether you're running a franchise, a small business, or a major corporation, these apply to you. Number one, attention is not loyalty. You can have millions of views and still struggle to build a sustainable business. The question isn't how many people know about you. It's about how many people value what you offer enough to keep coming back.

20:52 That's the real test. Number two, growth without discipline can become dangerous. Opening more stores doesn't automatically make your business stronger. Sometimes the smartest thing you can do is slow down, evaluate what you've built, and make sure the fundamentals are solid before expanding again. And I know that's not always exciting. It's not the kind of thing that gets everybody cheering in a boardroom, but sometimes it's exactly what needs to happen. Number three, leadership is tested when the excitement disappears.

21:27 Anybody can look like a great leader when sales are growing, customers are lining up, and everybody's celebrating. The real test comes when the numbers start moving in the wrong direction. That's when you find out whether a leader has the discipline to make difficult decisions, and that's when accountability actually matters. Let me finish with this. I'm not rooting for Crumbl to fail. I wanna make that very clear. I hope the company succeeds. I hope the franchise owners succeed. And I hope the people who work at those stores continue to have opportunities.

22:00 Because when a business struggles, there are real people affected. But I also think Crumbl's story is an important reminder of something we don't talk about enough. In today's world, it's incredibly easy to confuse attention with success. We celebrate followers, we celebrate views, we celebrate expansion and headlines, and sometimes we forget to ask the most important question. Is the business actually getting stronger? Because popularity can change overnight. Trends come and go, customers move on, and the very thing that made you famous can eventually become something people take for granted.

22:38 That's why I believe the businesses that last aren't necessarily the ones that make the most noise. They're the ones that build real value. They understand their customers. They pay attention to the numbers. They take care of the people who depend on them, and they have the discipline to make uncomfortable decisions when something isn't working. So here's my question for you. Did Crumbl grow too fast? Did the social media hype finally wear off? Or is this simply what happens when a trendy product has to become a sustainable business?

23:11 I'd really like to hear what you think. Drop your thoughts in the comments. And if you're a business owner, a marketer, or somebody who's ever thought about buying a franchise, I'd especially love to hear your perspective. If you enjoyed this episode, give it a like, subscribe to the channel. It helps us grow and reach more people. And share it with somebody who might find this conversation interesting. I'm Bob Cero. And remember, discipline over comfort every time. Until next time. Bye-bye.