FOR SALE: 2 Crumbl Cookie Stores in Northern California (Fairfield & Vallejo)
LIST PRICE: $1,100,000
- Average Monthly Revenue: $153,822
- Average Monthly Net Profit: -$4,571*
- Profit Margin: Gross: 31.8% / Net: see listing
- Monthly Multiplier: See listing
- Business Created: Jun 2022
- Owner Hours Required: 40 hrs/week historically (can be passive)
This 2-store package includes the Crumbl stores in both Fairfield, CA and Vallejo, CA (northeast of San Francisco). The Fairfield store (which opened its doors on June 17, 2022) is located in the Green Valley Crossing shopping center at 5089 Business Center Dr, Fairfield, CA 94534 in a 1,500-square-foot corner pad. Notable retail stores and restaurants within 1/4 mile include Costco, Safeway, TJ Maxx, Sushi King and a Thai restaurant. The Fairfield location serves a population of over 230,000 people, including Fairfield (~120k), Napa (~79k) and Suisun City (~29k). Total build costs and start-up costs were approximately $708,000.
Over the past 12 months, the Fairfield store has averaged about $72,100 in monthly revenue. Due to managerial issues that resulted in excessive labor costs and food costs, profitability has been limited (see the 'P&L and Financial Information' section below). If the store were operated better and achieved Crumbl's average net profit margin of 15.5% (as stated in Crumbl's Franchise Disclosure Document, or FDD), monthly net profit (or EBITDA) would have been around $11,200 per month.
The 1,422-square-foot Vallejo store (located in Redwood Plaza at 764 Admiral Callaghan Ln, Vallejo, CA 94591) opened about 6 months later on January 20, 2023. It serves a population of over 175,000 people, including Vallejo (~125k), Benicia (~27k) and American Canyon (~22k). A Safeway store and In-N-Out Burger are both located with 1/4 mile of the store (with a Costco store coming on soon), and Six Flags Discovery Park is just a few miles away. Total build-out and start-up costs for this store totaled about $694,000.
The Vallejo store has averaged about $81,700 per month in revenue. Had this store achieved Crumbl's average net profit margin of 15.5% (as stated in Crumbl's Franchise Disclosure Document, or FDD), its average monthly net profit (or EBITDA) would have been around $12,700 per month.
The owners (husband and wife) are selling these stores because one of them had a serious health event this past summer and, at ages 71 and 69, they are ready to retire and focus on their health and family. Both stores are fully-staffed with well-trained employees and are in a turn-key state for a fast, seamless transfer to the new owner. The sellers are motivated to sell, which is why the asking price is less than the $1.4 million they paid to purchase the Crumbl franchise rights and build the two stores.
As you can see in the map below, these two Crumbl stores serve large geographic areas and are not "boxed in" by other Crumbl locations. The nearest Crumbl stores are Vacaville (16 miles away), Concord (17 miles away, with a toll bridge), Berkeley (24 miles away, also with a toll bridge) and Novato (25 miles away). Crumbl has not approved any other stores for development in the area, nor is it accepting new franchisees anywhere in California (or the United States).
Assets Included in the Sale
Due to managerial oversights related in part to the owner's health issues, both labor costs and food costs have been much higher than they should have been over the past year.
Over-scheduling employees has been an ongoing problem, resulting in labor costs of 43.9% and 37.9% (as a percentage of revenue) in the Fairfield and Vallejo stores, respectively. When compared with the 29.7% benchmark cost of labor percentage for other Crumbl stores we've brokered, it is estimated that the owners could have spent approximately $123.3k less in Fairfield over the past 12 months and $80.2k less in Vallejo.
Similarly, managerial oversights have led to problems with over-ordering food, a lot of which has ended up going to waste. Food costs (as a percentage of revenue) have averaged 23.0% and 26.5% in Fairfield and Vallejo, respectively, compared to the benchmark of 22.1%. Had the stores' food costs been in line with other Crumbl stores, the owners could have saved $7.4k in Fairfield over the past 12 months and $43.4k in Vallejo.
Getting labor costs and food costs more in line with the benchmark percentages of other Crumbl stores would result in a $254.3k annual increase in EBITA.
It's also very important to note that Crumbl's national ad spend has been significantly reduced over the past several months (beginning around April 2023) while corporate has been in the midst of a) installing a new professional marketing team and b) doing pilot testing of new marketing strategies and campaigns in only a few select stores/areas. According to Crumbl corporate, many of these new campaigns have been highly successful and will soon be "rolled out" nationwide. While that's all very exciting, the monthly revenues for virtually all stores nationwide have dropped pretty significantly over the past few months while national advertising has been curtailed.
Marketing & Traffic
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 five years ago, Crumbl has expanded to over 800+ bakeries in 50 states, making it the fastest-growing cookie company in the U.S. In 2023, we expanded internationally and have opened stores in Canada. No matter how big the brand becomes, Crumbl is a family-owned business and is proud to contribute to the livelihoods of its thousands of local franchise partners, managers and bakers. With each new bakery, Crumbl will strive harder than ever to fulfill its mission of bringing friends and family together over a box of the best cookies in the world."
Crumbl is in the process of rolling out several new menu items, new pricing tiers, a new loyalty/rewards program and more. Additionally, Crumbl will soon allow franchisees to sell cookies off-site at games and other events. Corporate's new-and-improved marketing initiatives will soon be rolling out as well. It's an exciting time to join the Crumbl family!
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 United States) is already "sold out", meaning there are no additional franchise opportunities. The only way to own a Crumbl franchise in California (or in any other state, for that matter) is to purchase an existing store, as you have the opportunity to do by purchasing this 2-store package.
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 about 2.8 million reviews in the Apple App Store. (The Android app has a 4.8-star rating with around 431k reviews.) Unlike most food & drink franchises 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 (together with a 3% national advertising fee, both of which are included in the P&Ls above under 'General & Administrative Expenses'). This fee 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.
As noted above, Crumbl store operators 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 (along with the 7%-of-revenue franchise fee) is included in the P&Ls above in 'General & Administrative Expenses'.
The P&Ls above also include additional advertising expenses the owner has incurred to do additional local marketing (which has been quite minimal).
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.
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 10- to 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 due diligence period, we'll work closely with you and the seller to help you complete due diligence and prepare to close.
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 Biz Sellers Marketplace.
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