SALT LAKE CITY — The CEO of Utah-based Crumbl is taking the blame after a business downturn that has led to dozens of store closures and layoffs, according to a report.
During a presentation to franchisees last month, CEO Jason McGowan said things had been "painful" and admitted that "I'm the CEO and the buck stops with me. It's my fault where we are today," Restaurant Business reported.
The report claimed traffic at Crumbl's locations in August fell 32% from the previous year, and franchisees shared that it was the worst month in company history.
While the cookie maker still has more than 1,000 locations, 57 stores have closed this year, and at least 55 franchises are up for sale. The report added that the company had laid off employees at its Lindon headquarters last month.
Restaurant Business said business at Crumbl stores began to crumble after McGowan introduced dirty sodas within the chain. Although popular in Utah, dirty sodas failed to connect with customers, and franchisees were angered over having to pay thousands for new equipment to produce the drinks.
McGowan started Crumbl in 2017, and it quickly became a sensation, spawning other cookie stores that exploded after the pandemic. According to Restaurant Business, the average Crumbl store profit margins "exceeded 21% every year from 2019 through 2021."
The report claims many of the chain's troubles also fall on its rotating menu, which has forced franchises to quickly learn new recipes and search for little-used ingredients.
Local owners were also reportedly upset about changes to the company's "Sunday Rule" that prohibited stores from opening on Sunday. Over the years, the rule has been enforced, relaxed, and then enforced multiple times again.