Cookie Franchises Crumble as Chip City Closes Every Store

In 2019, opening a Crumbl cost between $129,000 and $252,000. The brand's 2026 franchise disclosure document puts the range at $848,566 to $1.47 million. Average unit volume went the other way.

That gap is the cleanest way to read what Franchise Times reported Oct. 16: the cookie category is shedding stores, and some of the casualties are brands investors were funding two years ago.

Start with Chip City Cookies. Backed by $17.5 million from Danny Meyer's Enlightened Hospitality Investments, it had 45 locations in nine states a year ago. This month it closed the rest, blaming “significant macro-economic headwinds.” Five days earlier, former CEO Peter Phillips had sued the company and Enlightened Hospitality over his separation terms.

Crumbl is the bigger tell. It grew from 690 franchised units at the start of 2023 to 1,101 at the end of 2025, but net additions fell from 281 in 2023 to 42 last year. At least 57 stores have closed in 2026, and the company laid off much of its franchise support staff, according to Restaurant Business reporting cited by Franchise Times. AUV fell 37 percent in 2023 to $1.16 million and slipped again last year to $1.14 million.

Co-founder and CEO Jason McGowan reportedly told franchisees in September that “the buck stops with me. It's my fault where we are today.”

Here is what that looks like at the store level. Emily and Richard Diamond's entity, Red Sheep St. Matthews, filed for Chapter 7 on Oct. 1 for a single Kentucky Crumbl that opened in February 2024. It grossed $128,143 that year and $84,313 in 2025, against $352,780 in liabilities. Republic Bank holds a $269,108 secured claim on cooking equipment. The equipment note is more than three times the store's 2025 sales.

Franchisee profit is the same pressure point Domino's cited when it cut its U.S. store outlook last week. In cookies it is showing up faster, because the ticket is small and the visit is optional.

“Economics can have a huge impact on them, as sweet treats are the first and easiest thing to be cut when people are trying to save money,” Maeve Webster, president of Menu Matters, told Franchise Times. She also said each brand's problems may be its own.

The counterexamples are real. Insomnia Cookies, which does not franchise, now has more than 360 stores. Crave Cookies had 15 locations at the end of 2024 and now lists more than 60, and its first franchise resale in Renton, Wash., went for nearly 33 percent above asking. Meanwhile Dirty Dough has fallen from 58 brick-and-mortar stores to fewer than 40, and owner Craveworthy Brands is not seeking new franchisees while it licenses the product to bakeries and hotels.

For anyone holding a cookie development agreement, the question is which curve their store sits on: the one where a buyer pays a third over asking, or the one where the equipment loan outlives the store.