FOR SALE: 2 Crumbl Cookie Stores in Orange County California

Up for sale are 2 Crumbl cookie stores in Orange County California. The store located in Rancho Santa Margarita (RSM) opened in January 2021, so it is coming up on 2 years old. The other store is located in Foothill Ranch (FHR) and opened just a couple months ago (in late Aug 2022).

The RSM store (almost 2 years old) has averaged $113,583 in revenue and $22,577 in profit (i.e. EBITDA) over the most recent 12-month period (October 2021 - September 2022), as you can see in the P&L below. The initial build-out costs for the 1,400-square-foot RSM store were approximately $420,000. RSM is just shy of 2 years into its 5-year lease with an additional pre-negotiated 5-year lease extension available. The store is located at 22342 El Paseo, Rancho Santa Margarita, CA 92688.

The FHR store just opened in the last week of Aug 2022. FHR is about 150% the size of the RSM store, checking in at around 2,100 square feet. (RSM utilizes some of FHR's storage space since FHR is so much bigger.) The FHR store has a very appealing 10-year lease in place and is located at 26552 Towne Centre Drive, Lake Forest, CA 92610. The total build-out costs for FHR were approximately $550,000. In its first full month of operations (September 2022), FHR generated $61,244 in revenue and $16,964 in profit (i.e. EBITDA).

Taking RSM's average profit over the past 12 months ($22,577) and adding FHR's profit for its first full month of operations (Sep 2022 - $16,964), the two stores combine to generate $39,541 profit per month after all operating expenses.

The owners (who are primarily members of the same extended family) are selling these 2 stores due to some interpersonal conflicts that have arisen in conjunction with owning and operating the stores.

Key Information

• Niche: Baked gourmet cookies (and cookie dough)
• Store Model: In-store retail sales + online sales + DoorDash delivery 
• P&L Period: Trailing Twelve Months (TTM) of Oct 2021 - Sep 2022
• Business Age: ~2 years (RSM launched in Jan 2021)
• Avg. Monthly Gross Revenue: $210,066
• Avg. Monthly Net Profit: $39,541
• Net Profit Margin: 18.8% of revenue

Asking Price: $1,900,000

The seller's $1.9 million asking price was calculated as follows...

The sellers are looking to sell both stores together in a package deal. They are negotiable on the price, depending on the structure and terms of the offer.

Here is the RSM store's accrual-basis P&L Statement for the Trailing Twelve Month (TTM) period Oct 2021 - Sep 2022. Click on the image to see a larger version of the P&L in a new tab.

Following is the P&L for just the last week of August and the month of September for the FHR store. (Again, click the image to see a larger-size image of the P&L.)

Please note that the P&Ls above do not include any salaries/wages to the owner/manager of each store, as they are only compensated through distribution of profits.

The current owner will of course give the eventual buyer the opportunity to conduct extensive due diligence, including an in-depth review of the P&L statements, Balance Sheets and other reports. The seller will also provide access to bank statements, credit card reports, merchant accounts and all other necessary reports to verify and confirm all of the figures shown in the P&Ls above.

Crumbl as a corporation has been absolutely killing it. Here is an excerpt from Crumbl's Franchising page on their corporate website:

"Since opening its doors three years ago, Crumbl has expanded to over 600+ bakeries in 47 states nationwide, making it the fastest-growing cookie company in the nation."

Crumbl is widely known for their huge tasty cookies, weekly rotating menu, open-concept kitchens, large pink cookie boxes and their top-rated app (providing multiple ways to order cookies, including delivery, pickup, catering and shipping). The state of California (along with the entire western half of the United States) is already "sold out", meaning there are no additional franchise opportunities. The only way to own a Crumbl franchise in California is to purchase an existing store, as you have the opportunity to do by purchasing this business.

The RSM and FHR Crumbl stores are on the Southeastern edge of the greater Los Angeles metropolitan area, just to the East of Irvine, CA and nestled up against a beautiful mountain range. Here is a map that shows the geographic locations of the two stores (RSM is red, FHR is blue) along with other Crumbl stores in the area...

Crumbl considers itself a "cookie tech company", priding itself not only on their gourmet cookies but also on using technology (including the Crumbl Cookies app) to gather consumer data, syndicate information and streamline the ordering process for customers. The Crumbl Cookies app has a 4.9-star rating with over 2.1 million reviews in the Apple App Store. (The Android app has a 4.8-star rating with around 302k reviews.) Unlike most food & drink shops that struggle mightily to get their customers to download and use their app, Crumbl has been wildly successful in that endeavor.

The rotating weekly menu plays a key role in generating excitement about new (and returning) recipes, which continually bring past customers back in to the store (or purchasing cookies online for delivery).

All Crumbl operators pay a 7%-of-revenue royalty fee (included in the P&L above), which entitles operators to use Crumbl's brand name and intellectual property, technology and software (including the app), website, recipes, Crumbl-branded boxes and specialty ingredients, and corporate direction, training and support.

In addition to the 7%-of-revenue royalty fee, Crumbl store operators also pay a 3%-of-revenue national marketing fee, which the Crumbl corporation uses for national marketing campaigns. These general advertising campaigns strengthen the brand image and increase brand awareness, benefiting each individual store. This cost is shown on the P&Ls above on the 'Crumbl National Advertising Fees' line item. 

The 'Local Advertising Costs' line item in the P&Ls above show additional advertising expenses the owners have incurred to do additional marketing locally.

As discussed above, the Crumbl app is incredibly beneficial to Crumbl store operators. Notifications about the new cookies available each week are automatically sent to every customer with the app, generating excitement and, more importantly, orders.

While other cookie shops may open in the area and compete with the Crumbl stores, Crumbl franchises have continued to do remarkably well largely because of their superior technology, social buzz and national marketing campaigns.

Store Operations

The Crumbl corporation provides extensive direction, training and support with day-to-day store operations. In fact, the buyer will need to complete a 1-week introductory training course before he/she is able to take over operations of the stores.

Most of the ingredients for the cookies (along with certain paper goods and general kitchen supplies) are ordered from Sysco. Speciality ingredients (along with Crumbl-branded boxes, emulsions and tech equipment) are purchased directly from Crumbl. Brand-name candies and other ingredients are purchased from a third supplier (which will be disclosed during the due diligence phase).

As discussed above, the Crumbl corporation handles all of the stores' technology, updates, websites, menu and recipes, and national marketing campaigns. This allows the owner to focus on day-to-day logistics and operations.

Currently, the owners spend approximately 20-30 hours per week in the store. (It is worth noting, however, that Crumbl does not require its owners to work any specific number of hours per week.) Owner/manager tasks include preparing the schedule, ordering, hiring/training/managing employees, handling catering quotes, and financial analysis.

Each store currently has a manager, quality specialist, several shift leaders and around 25 bankers/general employees. Hourly wages range from $17-18 per hour down to around $14 per hour.

The sale includes all of the following...

• Existing leases (RSM has just over 3 years remaining on its lease with a pre-negotiated 5-year extension available; FHR just began its 10-year lease term)
  
  
• All leasehold improvements, cooking/kitchen equipment, computer equipment and other fixed assets (as noted above, the RSM build-out cost around $420,000 and the FHR build-out cost around $550,000)
  
  
• All employment contracts
  
  
• All social media accounts (Facebook, Instagram, Twitter, etc.)
  
  
• All contracts and relationships with existing distributors and suppliers
  
  
• 30 days of support to train you/your team on how to run the stores (in addition to the mandatory 1-week training the new owner must complete with the Crumbl corporation)

You can make an offer for this business here. We will immediately present your offer to the sellers. If they accept your offer, we'll notify you immediately and update this page to let other interested parties know that an offer has been accepted.

Once your offer is accepted, a 30-day due diligence period will begin (during which time other interested parties may place a "back-up offer" in case the sale falls through for whatever reason). During this 30-day due diligence period, we'll work closely with you and the seller to help you complete due diligence.

Once the Asset Purchase Agreement (APA) is signed and the sale is completed, we will update this page to let other interested parties know that the sale has been finalized and remove this listing from the Store Coach Marketplace.