Middle-school dropout Jason McGowan had no baking experience but cofounded a viral cookie company that now has more than 1,000 stores—and rumours of a $2 billion sale. Inside a financial sugar rush.
A pink promotional sign—filthy from standing outside the storefront in midtown Manhattan—is shoved against a wall inside a cramped Crumbl bakery, where a crowd of grimacing customers squeeze against each other in a semblance of a line.
For Crumbl, a line outside the door has been the norm since Jason McGowan, 44, and Sawyer Hemsley, 33, opened the first location in Logan, Utah in 2017. Since then, the company–known for its oversized treats—most notably the 4.25-inch ultra-sugary cookies that are nearly 1,000 calories each—expanded to 1,071 franchised locations across the United States and Canada. In 2023, Crumbl earned $122 million of revenue from franchise royalties. The systemwide sales of all the franchises? Just over $1 billion.
“My expectations were pretty low at the very beginning,” says McGowan, speaking to Forbes from Toronto, Canada, where he is meeting with the Jonas Brothers to discuss a brand partnership for an upcoming cookie lineup. “We did everything backwards. We got the building first, then we got the equipment—all before we even had our recipe.”
One thing they got right from the very start: Viral marketing. After all, giant cookies make for amazing Instagram fodder. Crumbl has an impressive 9.8 million followers on TikTok—more than Starbucks, Dunkin’ and Krispy Kreme combined. In total, more than 107 million TikTok videos mention Crumbl, several of which have clocked up hundreds of thousands of views.
Then in January, reports emerged saying Crumbl was considering a sale that would value the company at $2 billion. But analysts believe that amount is just a sugar rush. “None of us in the franchise business believes it’ll sell for that much,” says John Gordon, a restaurant franchise specialist and founder of the San Diego-based Pacific Management Consulting Group.
Another prominent franchise, Jersey Mike’s, just sold to Blackstone in November for 2.2 times its systemwide sales. Using that rule of thumb, Crumbl would be worth $2 billion. However, analysts say that Crumbl would not trade at that multiple given that the chain may have already peaked. Average same store sales, a key metric, tumbled from $1.8 million in 2022 to $1.2 million in 2023, the last year for which data is available.
“All restaurants have to survive the ever-changing whims of consumers, but it becomes much more difficult when you essentially only sell one thing,” says Kevin Schimpf, director of industry research at the Chicago-based food industry consulting firm Technomic.
McGowan, who owns more than 50% of Crumbl, invested $68,000 of his savings to start the company and since then the business has been self-funded. Hemsley owns most of the rest, and McGowan says one other person has just a few shares.
A father of seven, McGowan believes in the American Dream, albeit through a Canadian prism. Raised in Alberta within the Mormon Church, his father was a social worker and his mother worked at a bank. “A very modest home,” says McGowan, who dropped out of school after the 8th grade.
Crumbl Beginnings: Since 2017, the company has grown from one store in Logan, Utah, to 1,071 locations across every state.
CRUMBL
He came to the United States for the first time as a Mormon missionary to Las Vegas. McGowan moved to Utah a few years after that in 2003, living on friends’ floors for six months while he taught himself web development. He founded several dotcom companies, including a social networking site for Brigham Young University and a genealogy website acquired by Ancestry.com in 2011. He then stayed on to work for Ancestry as the company’s mobile product director.
Meanwhile, Hemsley—McGowan’s wife’s cousin—had launched a clothing company shortly after starting college at Utah State University in 2015 and approached McGowan as an investor. The business failed soon after, while Hemsley was still in school.
“It didn’t work out, and that’s kind of how it goes,” McGowan says. “But I just was just struck with [Hemsley’s] character. So I said, ‘We need to do a business together sometime.’”
Hemsley started seeing DoorDash advertising on his college campus at the start of his senior year in 2017. The then-nascent online food delivery company gave Hemsley the idea to start a business delivering warm cookies directly to the community in Logan, Utah. It wasn’t a novel idea: Insomnia Cookies started delivering to college campuses on the East Coast in 2003. But Insomnia had yet to break into Utah.
Neither McGowan nor Hemsley had any baking experience, but they were set on creating a cookie company.
“We knew that Utah was very bakery-driven—it’s the Mormon culture,” Hemsley says. “We have our fair share of vices, but they’re not necessarily drugs or alcohol. It’s sugar and soda. We’re used to sharing baked goods with our neighbors.”
McGowan and Hemsley decided to create one product—a chocolate chip cookie. They tested recipes in Hemsley’s parents’ kitchen, learning from YouTube tutorials and commercial and local bakers in Utah. Hemsley picked out the flagship store—a vacant crepe shop in Logan that was set to be demolished in six months.
They tested their early recipes on friends and family. Most were failures. “We used to throw away so much dough,” Hemsley recalls. “People used to think that we were throwing away dead bodies.” Eventually, in September 2017, the pair developed their signature giant milk chocolate chip cookie. “The cookies were always big from the very beginning,” McGowan says. “We thought that if we make our cookies large, then it’s meant to be shared.”
Before opening the first store, Hemsley promoted it on social media—particularly Crumbl’s social media-friendly pink boxes—but even he was overwhelmed by the early response. “We were so slammed those first few weeks,” he says. “I used to have to call my parents to come in because we couldn’t keep up. They would just call it date night to come help.”
Crumbl was profitable in its first month, and within a few months Hemsley’s parents opened the first franchise location in nearby Bountiful. When this second store opened, Hemsley and McGowan launched a menu of weekly flavors announced online on Sundays—the one day Crumbl is closed every week.
“Our first franchise location was in Bountiful, and it was very nerve-racking,” McGowan recalls. “I was so nervous that the franchisees were going to lose money that I was in there with the hammer and nails building the counter because I’m, like, ‘I can’t have them lose money.’”
Throughout 2018, Crumbl began offering new franchises–but only within Utah. They resisted expanding out-of-state until a couple from Nevada approached McGowan asking to open a store in Las Vegas.
“Critics told us ‘Oh, only people in Utah will eat sugar,’ or ‘The cookies are warm, so no one’s going to buy them in the heat.’,” McGowan says. “And everyone said ‘You cannot go outside of Utah and close on Sunday.’”
The Las Vegas store proved just as successful as the Utah locations. “That’s when we knew we had to go and win the market, and we started answering these inbound calls to open stores,” Hemsley says.
In 2018, their first full year, Crumbl had revenue of $600,000 from its 16 locations, most of which came from its 8% royalties on store sales. The next year, the company expanded to 55 locations and earned $4.3 million. By 2021, Crumbl had opened 326 locations and was pulling in $47 million in revenue. It was part of a larger sugar boom. During a similar period, Insomnia Cookies grew from 130 locations with $97 million in systemwide sales to 210, with $158 million. Specialty cake shop Nothing Bundt Cakes expanded from 240 with systemwide sales of $265 million to 424 with $544 million.
The Covid-19 pandemic and the subsequent rise of TikTok turned Crumbl from a buzzy new cookie brand into a viral sensation. Whether people viewed eating the giant cookies on camera with delight or disgust, followers were unable to look away. Crumbl more than doubled its number of locations in 2022, expanding to 689 locations and bringing in $110 million in revenue.
“It’s pretty remarkable, I can’t think of any other chains that have grown so rapidly,” says Schimpf. “And when you just do one thing—selling cookies—it can always be a little bit more precarious of a business model. It’s based a lot more on novelty than anything else.”
The danger, of course, is that the novelty wears off. Crumbl ended 2023 with 970 locations but also closed stores for the first time. Seven franchises shuttered, something McGowan attributes to opening new locations in cities with smaller populations. “So many towns that just had one Crumbl now maybe have three, and that caused a pretty big drop-off in their average store sales,” says Schimpf.
To stem the bleeding, Crumbl introduced non-cookie desserts for the first time in early 2024, including cakes, pies and puddings. The company also slowed expansion, finishing the year with 1,071 locations.
“Now that we’re in every state and all over the nation, we’re going to take a little bit more measured approach,” McGowan says. “So instead of growing 300 or 400 units a year, which is not sustainable, we’re going to go to a hundred units. But we do think that the opportunity to do what we did in the United States is still available to us overseas.”
Last September, a TikTok account advertising a Crumbl pop-up in Australia surfaced. @CrumblSydney quickly generated enough hype that hundreds of Aussies lined up for the chance to buy Crumbl cookies for $17.50 ($12 in the U.S.). When people began filming their reactions, many complained about the stale taste and misshapen appearance of the cookies.
It was soon discovered that @CrumblSydney was not actually affiliated with the company—and the people behind it had in fact traveled to Hawaii to purchase several suitcases worth of Crumbl products, flown overseas with the cookies in their luggage and sold the cookies six days after the initial purchase. More than anything, Hemsley and McGowan view the bootleg cookies as proof of unmet demand.
“[The Australian sellers] were our fans that just love Crumbl, and they wanted people to have Crumbl too, as well… So we love that. The concern for us was product quality.”
Jason McGowan
For now, Crumbl plans to expand into the U.K., Australia and Mexico (another country where fake Crumbl stores have popped up). When asked about that possible $2 billion sale of the company, Hemsley says the company is open to offers. “We know the demand is there, and we want to bring on a partner if we find one that’s right to help us internationally expand.”
“I don’t know if we would necessarily step away from the business,” he continues. Hemsley now works as the company’s Chief Brand Officer, after spending his early years as Chief Operating Officer. Part of his job now is deciding on the weekly flavors and taste-testing desserts every other day.
In the last few years, Crumbl launched plenty brand partnerships, ranging from Kim Kardashian to Dove. McGowan says his goal is for Crumbl to “conquer” the U.S., Canada and eventually the world—whether or not it’s with cookies. 2025 is about expanding Crumbl’s dessert profile.
“We think a brand is either trying new things, or they’re dying,” McGowan says. “The next phase of growth for us is more than just cookies.”
—Additional reporting by Jemima McEvoy.
This story was originally published on forbes.com and all figures are in USD.
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