Franchise Business Plan
By: Sunny Chen and Krish Gupta
Moravian Academy Upper School
4313 Green Pond Rd
Bethlehem, PA 18020
April 24, 2022
Table of Contents
I. EXECUTIVE SUMMARY ........................................................................................................ 1
II. BUSINESS HISTORY, BACKGROUND AND OBJECTIVES ......................................................... 4
A. Describe the company for you wish to purchase franchise rights............................................................... 4
B. List your short-term and long-term objectives ............................................................................................ 4
C. Describe the company’s major successes and achievements to date .......................................................... 5
D. Describe the company’s challenges and obstacles ..................................................................................... 5
E. Describe the requirements to franchise ....................................................................................................... 5
III. BUSINESS ENVIRONMENT ................................................................................................. 6
IV. PRODUCTS AND/OR SERVICES .......................................................................................... 7
A. List and describe the products and/or services offered ............................................................................... 7
V. PRESENT MARKET.............................................................................................................. 7
A. Describe the present market ....................................................................................................................... 7
B. Describe the growth potential in your market ............................................................................................. 8
C. Describe the current pricing policy ............................................................................................................. 9
D. If the business is seasonal, explain how the company adjusts to seasonal factors ...................................... 9
VI. COMPETITION .................................................................................................................. 9
A. List the company’s primary competitors in your market. ........................................................................... 9
B. List the advantages the company has compared to its primary competitors ............................................. 10
C. List the disadvantages the company has compared to its primary competitors ........................................ 10
VII. MARKETING PLAN ......................................................................................................... 11
A. Describe the company’s existing marketing techniques, strategies, and tools ......................................... 11
B. Describe the marketing techniques, strategies, and tools to promote the business ................................... 11
VIII. MANAGEMENT AND ORGANIZATION ............................................................................ 12
A. Describe your management team and its strengths and weaknesses ........................................................ 12
B. Describe your plan to further develop your management team ................................................................ 12
C. Describe your management succession plan ............................................................................................. 13
D. Describe additional management personnel based on present and projected sales................................... 13
IX. BUSINESS RESOURCES .................................................................................................... 14
A. List the major operating equipment that you will purchase or lease ........................................................ 14
B. List major suppliers, location, and payment terms ................................................................................... 14
C. Identify other outside resources used or needed to fulfill customer requirements .................................... 14
D. Describe quality control procedures ......................................................................................................... 15
E. Describe the availability of skilled labor to meet your company needs .................................................... 15
F. Describe the necessary training required to upgrade the employees and the estimated cost ..................... 15
G. Projected number of full-time and part-time employees .......................................................................... 16
H. Organizational chart………………………………………………………………………………...……16
X. FINANCIAL PLAN AND DATA ............................................................................................ 16
A. Describe the company’s sales and profit trends........................................................................................ 16
B. Outline your strategy and timing for obtaining capital ............................................................................. 17
C. Two-year projected operating statement ................................................................................................... 17
D. One-year projected cash flow statement ................................................................................................... 18
XI. CONCLUSION .................................................................................................................. 19
XII. BIBLIOGRAPHY .............................................................................................................. 20
1
I. EXECUTIVE SUMMARY
COMPANY OVERVIEW
Founded in Logan, Utah in 2017, Crumbl Cookies is the fastest-growing gourmet cookie
company in the nation with over 400 bakeries in 42 states. Crumbl’s popularity gained traction
from their social media presence with 5 million TikTok and 2 million Instagram followers.
Crumbl now continues to innovate with new flavors and engaging online interactions.
OBJECTIVES
Short-Term Goals
Long-Term Goals
Gain $250,000 to open a Crumbl Cookies
franchise in Bethlehem, Pennsylvania
Increase total revenue sales by at least 20% for
the first three years
Make a net profit of at least $167,630 in the
first year
Open an additional franchise store in
Philadelphia, Pennsylvania
BUSINESS ENVIRONMENT
P
The Commonwealth of Pennsylvania maintains a non-regulative process for
franchisor/franchisees as a non-registration state
E
Bethlehem is a city in the Lehigh Valley region; it is one of the fastest growing and
largest economies in Pennsylvania
S
Densely populated city center that is still increasing and a younger population with a
median age of 35.5
T
A core marketing strategy for Crumbl is the use of social media (TikTok and Instagram)
and online ordering via their app or website
E
Open concept kitchen for customers to see the hands-on care and environmentally
conscious policies by using authentic ingredients
L
Our business will abide by FDA and Pennsylvania’s health and safety regulations while
following the franchise agreements
PRODUCTS AND SERVICES
Crumbl offers a rotating menu with six cookies a week composed
of four new flavors and two classics: Chilled Sugar and Milk
Chocolate Chip. In total, Crumbl has 200 flavors and has also
recently started ice cream labeled as “Crumbl Cream”. Regarding
services, Crumbl offers catering, online ordering, and delivery.
2
LOCATION
Close to Philadelphia, New York, and New Jersey, Bethlehem is the ideal location for Crumbl
because of its high population density in our target market, proximity to large businesses, and
growing economy. Offering plenty of labor to new local businesses, this location shows great
potential for growth and success.
COMPETITION
Our primary competitors are going to be the local
bakeries, such as Hotel B Ice Cream Parlor, Vegan
Treats, etc. We differentiate from them because of
our well-known cookie qualities that are trendy,
visually appealing, and generously sized. Our
emphasis on innovation in unique flavors,
employee-customer satisfaction, and social media
outreach also demonstrates our competitive advantages as an exclusively tech-driven bakery.
MARKETING
Our Crumbl store will have four main marketing strategies:
Hype Cycle Marketing: announce the new menu on social media weekly to continuously attract
customers with trendy and delicious new flavors. This strategy gains millions of views per week.
Social Media Marketing: taking advantage of Crumbl’s popular social media presence, our
location will have an individual account that will be run by our younger employees.
Digital Media Marketing: connect to our customers when they are online by utilizing emails,
web-based advertising, and referral programs to increase awareness about our location.
Business Marketing: sell products in bulk to other companies that award their employees for
their employee recognition programs such as UPS, FedEx, Amazon, etc.
MANAGEMENT/ORGANIZATION
3
Sunny and Krish will be the two managers where they lead and train employees, maintain work
systems, and oversee operations and policies. The four full-time employees and five part-time
employees will make and decorate cookies, attend customers, and maintain the kitchen.
TARGET MARKET
S
Demographics: focus on 30 years of age and under, especially college students
Psychographics: anybody who follows trends, social media, and likes dessert
T
Target young people, male or female, and develop a favorable reputation so they can
bring their other family members to our bakery, expanding our target market
P
Addictively delicious cookies that are one-of-a-kind and generously-sized, thereby
inviting from all target sections including students and adults
BUSINESS RESOURCES
Human Resources
We will have 2 managers (franchisees Sunny Chen and Krish Gupta),
4 full-time employees, and 5 part-time employees
Capital Resources
Mixers, rotating rack ovens, baking smallware, bun pan racks, tables,
sheet pans, dry storage, refrigeration equipment, outside signs,
freezers, food prep tables, counters, display cases, food processors,
iPads, flat-screen TVs, Tupperware, cleaning, and safety equipment
Natural Resources
Organic and high-quality ingredients that are delivered weekly by the
Crumbl merchant supplier
FINANCIAL SUMMARY
Personal Investment
Loan Required
Sunny Chen and Krish Gupta will both invest
$75,000 each, a total of $150,000
$250,000 paid over a 3-year term at an annual
interest rate of 5%. Payments start year 1.
We plan to invest the $250,000 loan into our opening
launch, and the other $150,000 will be both liquidity
and used for investments to equipment and
furnishings. There will be an on-going royalty fee of
8% to Crumbl and state tax of 3.07%. Finally, we
will start reimbursing in monthly payments.
4
II. BUSINESS HISTORY, BACKGROUND AND OBJECTIVES
A. Describe the company for you wish to purchase franchise rights
Since its first opening in 2017, Crumbl Cookies has
expanded to over 400 bakeries in 42 states, making it
the fastest-growing cookie franchise nationwide. CEO
Jason McGowan opened Crumbl’s first store in Logan,
Utah, hoping to create a family-focused business that
boasted one-of-a-kind flavors. Over time, thanks to a
strong TikTok media presence, Crumbl’s attention-grabbing videos exceeded expectations,
reaching millions of new customers by highlighting their natural and pristine cooking process.
Furthermore, Crumbl has demonstrated a commitment to its online marketing strategies and
quality customer service. They release a new menu lineup on their
TikTok page and website weekly—a distinguishing aspect of Crumbl
that showcases four out of 200 specialty flavors. By streamlining the
customer’s experience, Crumbl makes it its mission to bring friends
and families together over the world’s best box of cookies.
B. List your short-term and long-term objectives
Short Term (0-12 months)
Long Term (Year 2+)
- Break-even within the first 10 months
- Eliminate inventory overflow and wastage
- Hire a team that exemplifies Crumbl values
and retains a positive reputation
- Make a $167,630 net profit in the first year
- Have a strong positive cash flow number
- Create a Bethlehem TikTok account
- Increase sales by at least 20% first three years
- Create a rewards program and provide stellar
customer service to attract regular customers
- Expand target market to older ages
- Open another location in Philadelphia,
Pennsylvania
- Collaborate with local festivals
Figure 3: Chart of Bethlehem Crumbl’s objectives
The purpose of our short-term goals is to help this new franchise location have a successful
launch campaign and become profitable within the first year of operations. The long-term goal is
Figure 1: Map of Crumbl's locations
Figure 2: Jason McGowan
and Sawyer Hemsley (COO)
5
to continue growth and open another location in Philadelphia, and ultimately dominate the
market as the No. 1 cookie brand in Pennsylvania. Our management team will remain flexible in
the case that both the short term and long-term goals need to be revised.
C. Describe the company’s major successes and achievements to date
The company’s first major breakthrough came
from its viral videos on TikTok; they gained two
million followers in just six weeks in February
2021. In addition, Crumbl started franchising
within months after opening, leading to over 400
stores opening in just four years. Not a single
location has shut down since the founding year, and over 180 stores were opened during the
pandemic at a stunning rate of 8-10 stores a week. McGowan (COO) anticipates that Crumbl will
have around 650-700 locations in total by the end of 2022. Finally, the free app also has over 1.2
million reviews, a 4.9-star rating, and has ranked as high as #7 in Food & Drink.
D. Describe the company’s challenges and obstacles
Crumbl faces a few challenges to maintaining its success; this company prides itself in being a
tech-driven bakery with online ordering and in-store ordering kiosks, so all the technology and
equipment must be inspected consistently or updated with maintenance when needed. Another
challenge is the weekly rotating menu because bakers from every location must learn how to
perfect different cookies each week. Furthermore, cookies cannot be made in advance because
they must be served fresh, so the management team must be efficient. To overcome this obstacle,
Crumbl invests more money compared to competitors in training its employees and managers.
E. Describe the requirements to franchise
Crumbl is looking for dedicated owners willing to seek out great locations and employees in
addition to minimum liquidity of $150,000. The first steps include an overview of Crumbl’s
franchising documentation and expectations, followed by an interview. If accepted, negotiations
Figure 4: Chart of Crumbl's increase in locations
6
will continue as the ideal territory, operations, and fees are hashed out. Once the proposed
location has been approved and purchased, new employees will finally go through orientation to
prepare for launch, while construction will continue in the background. With these preliminary
steps completed, a new Crumbl store can now be opened.
III. BUSINESS ENVIRONMENT
P
Political
- Pennsylvania is a non-registration state, meaning no state franchise registration, no
special state disclosures required in a Franchise Disclosure Document (FDD), and no
state franchise relationship laws
- State income tax rate of 3.07%
E
Economic
- Lehigh Valley is one of the largest and fastest growing economies in Pennsylvania
- Lowest minimum wage allowed by federal law at $7.25 and not increased in 15 years
- Lehigh Valley Economic Development Corporation (LVEDC) invested in business
incentive programs, strengthening the economy and luring large established businesses
S
Social
- Lehigh Valley’s population growth ranked in the top 25% of all counties nationwide
- 2020 census numbers show 64% increase in Lehigh Valley’s population
- Younger population with median age of 35.5
T
Technological
- Founders with background in tech launched Crumbl with a digitally advanced mindset
- Use of social media (TikTok and Instagram) are effective for marketing
- Online ordering is made easier via app or website
E
Environmental
- Cookies are made fresh everyday with organic and high-quality ingredients
- Open-kitchen concept to display the hands-on care towards making the cookies
- As environmentally conscious as possible
L
Legal
- Crumbl must abide by FDA and Pennsylvania’s health and safety regulations
- Must follow the franchise agreements
- Must follow employee-related regulations regarding welfare and wages
Figure 5: PESTEL analysis of Bethlehem Crumbl
Close to major metropolitan areas like Philadelphia and New York, Bethlehem in Lehigh Valley
Pennsylvania is experiencing a growth in population from people who are urban, active online,
and young. This city is surrounded by universities and leading companies including Amazon,
McKesson, PPL Corporation, and more. With a myriad of potential partners for catering
opportunities and a population willing to showcase their cookies on social media, Bethlehem
serves as an ideal proving ground where Crumbl can thrive. Furthermore, the city is accessible
7
and welcoming to visitors; Bethlehem is situated close to major interstate highways, has
accessible parking, and has several tourist attractions. Regarding expenses, Pennsylvania’s
minimum wage is the lowest allowed by federal law at $7.25 an hour, but our Crumbl strives for
both customer and employee satisfaction with higher wages at $14-19 an hour.
IV. PRODUCTS AND/OR SERVICES
A. List and describe the products and/or services offered
Crumbl currently has 200 flavors and serves them with a
weekly rotating menu that features four specialty flavors
and two staples: Milk Chocolate Chip and Chilled Sugar.
Each mouthwatering cookie is dense, crumbly, and soft yet
crunchy at the same time. They are delivered in a unique,
oblong-shaped box colored with the brand’s signature pink coloring. Recently, ice cream labeled
“Crumbl Cream” has also been added to the menu. Finally, we offer the following services:
Service
Description
On Location
Customers can come to the bakery and first look at the open-display flavors before
ordering either on the iPads mounted on the walls or at the register
Delivery
Our cookies can be found on Grubhub, DoorDash, Seamless, Uber Eats, and
Postmates for efficient delivery right to the customer’s doorsteps
Online
Customers may order their cookies in advance and come to the bakery for pick up
Catering
With a 72-hour notice for flavors, Crumbl also offers catering services for
customers to enjoy warm and delicious cookies at their parties and events
Figure 7: Crumbl’s service descriptions
V. PRESENT MARKET
A. Describe the present market
We believe that everybody can enjoy a delicious cookie, so our ultimate goal is to serve
customers from all age ranges. However, we recognize that with Bethlehem’s many local
Figure 6: Open-display of Crumbl cookies
8
colleges, growing student population, and social media opportunities, focusing on younger
customers will be more beneficial at first. For example, according to data from the U.S Census
Population Estimates, Lehigh Valley’s 18-to-34 age bracket grew by 10.7% over the last decade,
which is a faster rate than any other region in Pennsylvania. In addition, Franklin Univ. states
that there are over fifteen colleges in the Bethlehem area, so by targeting younger audiences, we
can further the online popularity generated by TikTok. Therefore, our present market is primarily
younger audiences, but as Crumbl’s reputation grows, we hope that more visitors and elderly will
be willing to try our cookies based on word of mouth. The STP chart summarizes our findings:
Segmentation:
Targeting:
Positioning:
Demographics: focus more
on people under the age of
30 and younger
Psychographics: anybody
who uses social media
platforms, follow online
trends, and likes desserts
Our main focus would be to
target university students and
all audiences eventually
We hope to develop a stellar
reputation so our young target
market can bring their family
members to our bakery
One-of-a-kind cookies that are
generously sized! Anyone can
come enjoy our insanely
delicious cookies
The unique texture, aesthetic
appeal, and weekly flavors will
get people addicted
Figure 8: STP chart of Crumbl
B. Describe the growth potential in your market
Lehigh Valley’s lower cost of living with affordable
housing and lower taxes, along with a larger labor
pool and better access to higher education have
attracted younger workers to the area. As a result,
the population of millennials and Gen Z in the
Lehigh Valley have been growing at a faster rate
than any other region in the state—nearly 150,000 in the last decade according to the 2020
LVEDC population report. As Crumbl is a modern take on cookies with a contemporary
atmosphere, it will attract this young population that only continues to grow. All in all, there is
an impressive number of statistics that illustrate the population growth in the Lehigh Valley,
resulting in the great potential for augmentation in our market.
Figure 9: Graph of PA increasing population estimates
9
C. Describe the current pricing policy
Crumbl has a set pricing policy, where the prices are the same at all locations. Crumbl currently
prices its large cookies at $4.38 for one, $14.83 for four, $21.13 for six, and $38.36 for a dozen.
Compared to our competitors, our cookies are higher in price, but we believe the value and
quality reflect in the experience. The ice cream is $4.38 for a one-half pint and $14.83 for four.
D. If the business is seasonal, explain how the company adjusts to seasonal factors
Crumbl is not a seasonal business, but the company targets special holidays such as Valentine’s
Day and Mother’s Day to increase sales with new designs. Bethlehem as a city has several
avenues of seasonal participation that Crumbl may apply for in the future, such as Christmas City
Village in the winter and Musikfest in the summer. With this strategy and the increased
popularity on Crumbl’s social media platforms, we will operate our business in an all-season
environment and adjust accordingly throughout the year to capitalize on special sales.
VI. COMPETITION
A. List the company’s primary competitors in your market. Identify their strengths
and weaknesses
Our primary competitors are any local bakeries, which we have narrowed to the following:
Strengths
Weaknesses
Small
Bakeries
- Homemade, family-owned
- More loyal customers
- Less expensive
- Less brand awareness
- No online ordering options
- No free apps
Hotel B Ice
Cream Parlor
- Wider variety of products
- Famous ice cream brand (Penn State Creamery)
- Popular location in Bethlehem area
- Understaffed
- Small range of business hours
- No app
Vegan Treats
- Ranked as one of the top ten bakeries in the world*
- More inclusive of vegan diets
- Offers a delivery service
- Difficult management
- Lower wages
- No app
Figure 10: Chart of Crumbl's primary competitors and their strengths/weaknesses
*American Express' "Departures" magazine
10
B. List the advantages the company has compared to its primary competitors
Small Bakeries
Hotel B Ice Cream Parlor
Vegan Treats
Crumbl offers:
- Highly recognized brand
- Available on 5 delivery
service apps
- Catering and online
ordering options
- Uniquely tech-driven
Crumbl offers:
- Free app
- Well-trained staff members
- Wider business hours (8:00
am-10:00 pm on weekdays and
12:00 am on weekends while
Hotel B is 10:00 am-9:00 pm)
Crumbl offers:
- Popular on multiple
social media platforms
- Uniquely tech-driven
- Free app
- Higher employee
satisfaction
Figure 11: Chart of Crumbl's advantages to its primary competitors
Crumbl’s primary competitive advantages are the existing brand awareness, social media
presence, and tech-driven bakery. Currently, our biggest competitor out of the three above is
Vegan Treats. However, former employee reviews on Indeed, a worldwide employment website,
have mentioned the lower wages and difficult management. We will differentiate ourselves by
offering higher salaries at $14-19 an hour for employee satisfaction and by utilizing our tech-
driven bakery for an enjoyable experience for customers and employees. Elements such as the
seamless high-tech ordering experience for customers, the easily accessible data for employees,
and the advanced internal dashboard helps Crumbl scale, pivot, and reach buyers in
unprecedented ways. These factors along with the wide range of business hours allow Crumbl to
be more accessible to younger audiences and more favorably reviewed by future customers.
C. List the disadvantages the company has compared to its primary competitors
Crumbl has a few disadvantages, but a prominent one includes the loyal customer base that has
been built in the small bakery shops that long-time locals might prefer. To combat this, our
location will prioritize giving the best product quality and customer service to ensure that visitors
are eager to share with friends on media and return in the future. Because Crumbl already has a
foundation as a franchise, we believe our trendiness can build a following over time in
Bethlehem. Another disadvantage is that Vegan Treats is a popular location that is inclusive of
veganism, while Crumbl does not accommodate all diets. However, Crumbl’s mission statements
have noted that they hope to release more options for inclusivity, such as gluten-free.
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VII. MARKETING PLAN
A. Describe the company’s existing marketing techniques, strategies, and tools
Crumbl’s marketing currently uses two strategies to get customers excited. Both especially target
the younger generations but take different approaches in how they increase outreach.
Hype Cycle Marketing: Crumbl releases new and trendy cookie flavors weekly with a rotating
menu as a “hype cycle” and replaces the previous week’s flavors for every location. This strategy
leads to excitement among customers to buy the current week's flavors and creates anticipation
for the next release. It is effective in gaining attention, as the unveilings reach over 1 million
views on Instagram and 1.5 million views on TikTok per week. While our flavors are not truly a
scarcity, Crumbl mimics the marketing tactics found in industries with limited supply drops,
such as streetwear and tickets.
Social Media Marketing: Crumbl has flooded the TikTok
“for you page” with their menu releases and other content
creators’ weekly reviews. With 2 million and 5 million
followers on Instagram and TikTok respectively, Crumbl
relies on customers and content creators to help push their hashtags that drive engagement and
their reviews on how amazing their cookies are. Finally, Crumbl actively uses modern TikTok
sounds or snippets that help drive the algorithm in favor of our products. We will continue to use
this strategy by creating a Bethlehem Crumbl TikTok account that advertises our location.
B. Describe the marketing techniques, strategies, and tools you will use in the future
to promote the business
We plan to expand upon Crumbl’s already effective tactics by utilizing two more strategies:
digital media marketing and business marketing.
Digital Media Marketing: As customers begin to frequent Crumbl, we will set up an automated
email system that customers can optionally sign up for to keep up to date on new weekly flavors
and holiday deals. Because the younger generations generate the most traffic on social media
Figure 12: Crumbl's TikTok page (Apr. 2022)
12
apps like TikTok, we want to diversify our avenues to reaching emails, texting, and web-based
advertising that may favor older generations more. Since cookies are universal, we believe that
continuing communication through digital media will increase both awareness of Crumbl and
brand loyalty for older audiences.
Business Marketing: Due to Bethlehem having many different corporations and growing
communities situated here, Crumbl aims to provide catering services for the many business
events that happen in the local area, whether it be fairs, conferences, or even employee
recognition programs. We understand that there is much to celebrate for all the local businesses
around us, so as a result, our Crumbl seeks to position itself as the primary dessert provider. By
collaborating with large established organizations like UPS, Amazon, Lehigh Valley Hospital,
and more, our location will promote sales, improve profit, and build more branding power.
VIII. MANAGEMENT AND ORGANIZATION
A. Describe your management team and its strengths and weaknesses
Strengths
Weaknesses
Sunny Chen
- Good teamwork and communication skills
- Effective problem-solving skills
- Strong management skills and multitasking
- Works effectively under pressure
- Lack of experience
- Indecisive
Krish Gupta
- Reliable work ethic
- Good teamwork and communication skills
- Assertive decision-maker
- Lack of experience
- Struggles in multitasking
Figure 13: Chart of franchisee's strengths and weaknesses
Our management team is made up of two franchisees, Sunny Chen and Krish Gupta; Krish is in
charge of the marketing, and Sunny will be responsible for finances. Fortunately, each
franchisee’s weakness can be overcome by the other’s strength and can also be uniquely
beneficial towards the business. For example, Krish is an assertive decision-maker, and Sunny’s
indecisiveness allows them to gather more information before making a decision. Krish’s
difficulty to multitask means he can focus solely on the more tedious projects.
13
B. Describe your plan to further develop your management team
The Crumbl Franchise Disclosure Document (FDD) includes all the necessary management team
developments. For example, as part of the franchising process, Crumbl provides an initial
training program for the managers, and it teaches them exactly how to make their location
successful. The program includes how to maintain the equipment, ensure the flavor quality is up
to standard, and other mandatory operations. Corporate also supplies the franchisees with access
to electronic manuals for extra assistance. During the construction process, Crumbl offers them
additional seminars to discuss accounting, performance standards, personnel training, and more.
After the location is established, Crumbl often holds conferences to discuss improvements, new
developments, and other concerns to keep the managers up to date with information and policies.
C. Describe your management succession plan—who will take over in the event of
the incapacity or continued absence of any owner or key employee?
One of the two franchisees will take complete control of the business if the other is unable to
continue with Crumbl or is taking a continued absence. We will be providing on-the-job training
and leadership workshops to our employees so that they are ready to be promoted to manage the
location in the next five years without our assistance. Through these trainings, we will also be
developing key employees who will cover for each other in the future in case an employee is
unavailable for any reason. If needed, we will recruit and hire more employees.
D. Describe the need for, and how you will obtain, additional management
personnel based on present and projected sales
The two franchisees will be able to manage the Bethlehem Crumbl location with no additional
management personnel. However, as one of our long-term goals is to open additional locations,
we will promote an appropriate number of key members to manage the Bethlehem bakery. If
needed, new qualified personnel would be interviewed and hired by a franchisee, where the new
employee would be trained sufficiently before they work independently. Another possible option
to expand our management team is to set up campus ambassadors with local college students
willing to receive gear, free samples, and more to help advertise our products.
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IX. BUSINESS RESOURCES
A. List the major operating equipment that you will purchase or lease
Crumbl is a tech-driven bakery, so we will purchase the following kitchen equipment: mixers,
rotating rack ovens, baking smallware, bun pan racks, refrigeration equipment, processors, and
appropriate safety equipment. Furthermore, a POS system, hardware (iPads, TVs), and any
appropriate décor will be bought. We intend to purchase outright our equipment with liquidity as
the operational expenses and equipment are not too complex.
B. List major suppliers, location, and payment terms
Our supplies will be bought weekly and delivered to our Bethlehem location through Crumbl’s
dedicated merchant supplier, who distributes the necessary ingredients for cookies nationwide to
all the different franchises. As a result, our supply of ingredients is managed by the parent
company and is streamlined for us without needing payment terms. We plan on purchasing most
of our large baking equipment, garnishing supplies, and other smallware from Bakedeco /
Kerekes for their high-quality and established reputation. Since most of our equipment will be
ordered through their website, we can also observe their location in New York if we wish to first
shop in person. The payment term is 30 days.
C. Identify other outside resources used or needed to fulfill customer requirements
Because Crumbl does not have indoor seating, we can avoid many extraneous purchases for
furniture and tableware. However, because we want to ensure that the purchasing and indoor
experience is still pleasant, we will invest in several outside systems to improve it. One example
would be music speakers and ongoing playlist selections. Additionally, stanchions, cleaning
supplies, and complimentary hand sanitizers will help us maintain orderly lines and happier
moods while ensuring that our delivery services are at the regulation standards we expect. Lastly,
we will also work with delivery services like GrubHub, DoorDash, etc., to provide our cookies
within 15 miles of our location to business partners.
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D. Describe quality control procedures
The entire cookie-making process will be supervised with an exact measurement of ingredients,
temperature, and baking time. Crumbl provides us with the instructions and documentation for
each cookie weekly, but the Bethlehem location will add some additional procedures to further
ensure the gourmet quality. For example, we will create a checklist for employees to sign off
daily to ensure that all tasks are completed without any oversight, primarily maintenance and
baking stations. There will also be quality checkpoints for employee training, hygiene, allergen
controls, and raw material because we know it can drastically reduce the risk of product recalls
and also ensure a consistently delicious finished product.
E. Describe the availability of skilled labor to meet your company needs
Lehigh Valley offers plenty of labor to new businesses due to its increase in population and
affordable living. We will be looking for employee candidates who have previous experience in
the food and customer service industry. Because Lehigh Valley has a strong presence of
restaurants, strip malls, and more, the expectations for service culture will be standardized with
our training. We can also tap into the local part-time college student population who are willing
to work short hours throughout the day. Not only will this improve our presence among younger
customers, but also it ensures that Crumbl is community-driven in its core recruiting principles.
F. Describe the type and extent of necessary training that will be required to
upgrade the skills of labor and administrative employees and the estimated cost
We will provide a thorough training program where our employees will learn company policies,
products, customer service expectations, and have hands-on training, shadowing, and
demonstrations. Our corporation has established a formal process during the interviewing for the
franchising requirements. They will be providing us any physical materials needed to illustrate
how to display our cookies, design the decorations, and more, which they do for all franchised
stores. Each employee will be evaluated for their performance weekly and have brief 1:1 review
with the managers until they fully graduate from training. We estimate the cost to be $20,000.
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G. Projected number of full-time and part-time employees
Our projected number of employees is four full-time and five part-time employees to cover a.m.
and p.m. shifts. The times change accordingly on Saturdays since its open until midnight, and the
hourly wages are $19 an hour for full-time and $14 an hour for part-time employees. The chart
below is our employee projected operating schedule.
H. Organizational chart
X. FINANCIAL PLAN AND DATA
A. Describe the company’s sales and profit trends
Mobile Cuisine states that in 2020, Crumbl generated $53.4 million in
revenue, a 93% increase in sales from 2019. In addition, according to
Crumbl’s 2020 FDD, which takes into account Crumbl’s 2019 sales from
fourteen franchise locations, the average total revenue for one location
was $1.3 million at a gross profit margin of 45.3% and a net profit of
Figure 16: Crumbl's
2020 FDD
Figure 15: Bethlehem Crumbl organizational chart
Figure 14: Bethlehem Crumbl employee schedule chart (FT = Full-Time and PT = Part-Time)
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$284,000 (21.6% net margin). Crumbl has experienced explosive growth over the last few years.
While we might not reach those peaks in our first year, with their social media presence growing
consistently, we are still confident that our next few years of operations in the Bethlehem
location will also experience similar financial performances. This comes from several
interconnected reasons including Lehigh Valley’s growth, the young population, and Crumbl’s
many competitive advantages.
B. Outline your strategy and timing for obtaining capital
Each franchisee will invest $75,000.
We request a loan of $250,000 with
a three-year payment term at an
interest rate of 5% to cover the
startup expenses of the first year.
The amortization schedule for this
loan is outlined to the right. We will start to pay it back in our first year of operations, starting
with $7,480 in the first month, and slowly increasing with each monthly payment. The total
amount of money that will be paid back is $269,290.
C. Two-year projected operating statement
Crumbl’s estimated revenue comes from food ordered on location, online, delivery, and catering.
We will be using conservative projections to observe profitability, as we look to err on the side
of caution. In Crumbl’s 2020 FDD, we considered the franchise’s low and average 2019 sales
figures for fourteen locations as a benchmark to estimate our conservative revenue, which is
roughly $1.23 million. The Bethlehem Crumbl location projects a net profit of $167,630 in the
first year of operations, with a conservative gross margin of 59% and a net margin of 13.6%. We
expect a 38% increase in net profit in our second year. In the next five years, we anticipate that
our location will keep experiencing these increasing trends and start having similar financial
performances as a standard Crumbl franchise. Our figures are lower than average because we are
Figure 17: Chart of 3-year Bethlehem Crumbl payment schedule
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considering start-up fees and other conservative expenses. Regarding some of the figures in the
operating statement, Crumbl has a royalty fee of 8% of gross sales, and our tax and interest
expenses were calculated with a 3.07% income tax rate and adding the Figure 17 numbers.
D. One-year projected cash flow statement
The cash flow statement below will provide an in-depth summary of the allocation of funds
during the first year. Our one-time start-up cost is a $250,000 loan, and $120,000 will be from
our investments in equipment. The rest of the cash, $30,000, will be used as capital liquidity.
Regarding depreciation, we do not expect a large number for our first year because most of the
physical assets we will be investing in will be fairly new. We expect an increase in net cash of
around $253,530. Even though these are conservative figures, we still have a strong positive cash
flow, indicating that our cash flow is more than sufficient to meet short-term financial
obligations and demonstrates that our location is in good financial health.
Figure 18: Two-year conservative projected operating statement
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XI. CONCLUSION
As the nation’s fastest growing gourmet cookie franchise, Crumbl Cookies is an incredibly
successful company. As evidenced from our PESTEL analysis, it is apparent that the great
potential in Bethlehem’s business environment and the increasing youth population in the Lehigh
Valley will provide a large target market for Crumbl. From this strong foundation, we plan to
promote our business through different media, business marketing, attractive salaries, and
engagement with our community to emphasize our competitive advantage. It is our firm belief
that employee satisfaction represents a key contribution to customer satisfaction, and therefore
we will set out to hire qualified and excited individuals who are passionate about Crumbl’s
beliefs like us. We are requesting a $250,000 loan paid back over a three-year term at 5% interest
rate, which will be used to ensure a positive cash flow in the first year of operations. With our
superb product quality, trendy flavors, and innovative technologies, we are confident that
Crumbl is an ideal franchising opportunity in Bethlehem’s urban and business landscape.
Figure 19: One-year conservative projected cash flow statement
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XII. BIBLIOGRAPHY
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Findaro, Patrick. "Crumbl Cookies Franchise Cost & Profits (2021)." Vetted Biz,
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