Wall Street Wants In on Crumbl’s Oversized Sugary Cookies

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An ecosystem of fan-made content exists in parallel.

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On TikTok, customers post unboxings, showing off each item to the camera before biting in. On Reddit, devotees campaign for their favorite flavors like “Mallow Sandwich Cookie” or “Caramel Toffee Butter Cake” to garner votes at their local stores. (Rewards members who spend over $50 annually can vote on Crumbl’s app for items to be added to their local franchise as a one-day special.)

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These contests have spurred an unofficial barter system on social media in which fans trade votes across locations to boost their preferred flavor. One fan active on the r/CrumblCookies Reddit forum this month pleaded:

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“please please please can you guys vote for nilla bean cupcake or chocolate covered strawberry at West Brighton location? the first place is s’mores cookie BUT WE’RE GETTING THAT NEXT WEEK!!! i have 4 votes left,” to which another replied,

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“If you can vote for double fudge brownie in Dalton, Ga I’ll vote for yours!”

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By putting out fresh flavors so regularly, Crumbl has given itself a leg up, said Clifford Hudson, former CEO of Sonic Corp. and the founder and director of DIA Equity Partners. “It’s a more extreme position than what we used to think of as new product news,” he said. “They’re taking it to a different level.”

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Crumbl began in Utah, the project of Jason McGowan and Sawyer Hemsley, co-founders and cousins. The pair opened their first store in Logan, Utah, in 2017. By 2022, there were 691 locations around the US. The business’ growth has generated standout paper gains for its co-founders. Based on an analysis of the company’s financials and the trading multiples of publicly traded peers, Hemsley and McGowan’s founding stakes were worth close to $400 million each before the TSG deal, according to the Bloomberg Billionaires Index. 

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A Crumbl spokesperson confirmed the pair previously owned the company outright, and said McGowan had been the sole capital provider.

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Crumbl finished 2024 with earnings before interest, taxes, depreciation and amortization of about $91 million, according to calculations based on a firm disclosure. The company declined to comment further on its finances. 

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“I would be surprised if there’s not a pretty good margin in a $5 cookie,” said DIA Equity Partners’ Hudson, who has no affiliation with the company or its franchisees.

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Investor interest in Crumbl comes at an otherwise tricky time for sweets. By volume, sales of “better-for-you” snacks ticked up in 2024, while more indulgent categories all declined, according to market research firm Circana. And weight-loss drugs like Ozempic and Zepbound are proliferating further – while the federal government scrutinizes synthetic food dyes common in treats, including some of Crumbl’s desserts.

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But Americans tend to eat healthier at home and look for indulgences when they go out, said David Portalatin, senior vice president and industry advisor for food and foodservice at Circana. That was visible in quick-service restaurant traffic in the first quarter: Overall, the sector saw less traffic than it did the year before, Portalatin said. But visits for “snack occasions” in the afternoon and evening were up.

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And while Gen Z is more focused on protein and “functional beverages” than other generations, 28% of their restaurant visits are for snacks, Portalatin said. That’s a higher proportion than all other consumers.“Some occasions treat my physical wellbeing, others treat my mental and emotional wellbeing, and they’re viewed as being part of the same overall goal,” Portalatin said.

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A business like Crumbl also offers a degree of certainty around an exit strategy, as opposed to businesses that face more volatility, said Donna Hitscherich, co-director of Columbia Business School’s Private Equity Program. The owners of the cookie brand were previously said to be exploring a sale that would value the company at nearly $2 billion, Reuters reported in January. 

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“At the end of the day, people like their cookies,” she said.

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—With assistance from Dylan Sloan, Olivia Fishlow and Crystal Tse.

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