S3 Ep4: Crumbl Cookies Franchise: How Jason McGowan Is Building a Sweet Toothed Empire
Crumbl Cookies is the brand that swept the nation. Meet Jason McGowan, the unstoppable CEO and co-founder.
Jason founded Crumbl Cookies in 2017 with business partner Sawyer Hemsley. Since then, more than 600 stores have opened across 48 states, employing over 26,000 people.
The Wolf and Jason get into how he and Sawyer came up with the concept, leveraging a gap in the market, how cutting-edge technology is part of the Crumbl brand, and Jason’s thoughts on whether a cookie franchise can really conquer the globe.
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LinkedIn: linkedin.com/in/jasonmcgowan
Twitter: https://twitter.com/jasonmcgowan
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Episode Transcription
Jason McGowan:
We’re not here to be a flash in the pan. We’re not here to sell quickly. We’re here to build something great and be something that is meaningful in people’s lives, and that’s what we’re trying to do. So I feel very bullish and hopeful and all of the data around it showing me that crumble will be here to stay and stay for forever. So
The Wolf of Franchises:
Welcome to Franchise Empires where aspiring entrepreneurs learn exactly what it takes to become a successful franchise owner from one location to 10 and beyond. I’m the wolf of franchises.
Hey everyone, it’s the Wolf. I’m not going to lie. This episode is a can’t miss. I spoke to c e o and co-founder of Crumble Cookies. Jason McGowan Crumble was founded in 2017 and has taken the nation by storm. They already have almost 600 stores open and operating today, along with millions of social media followers across platforms like TikTok, Instagram and YouTube. I go through it all with Jason from how this concept was founded to how they’ve used technology and social media to manage their rapid growth and what their thoughts are for the future of crumble. Our cookies are fad, where we’ll crumble be a global behemoth. Keep listening to find out the answers.
Narrator:
The Wolf of Franchises is the CEO of Wolf Pack Franchising as well as a creator at Workweek Media. All opinions expressed by the Wolf and podcast guests are solely their own opinions and do not reflect the opinion of Pack franchising or workweek. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. The Wolf Work Week and Wolf Pack Franchising may maintain positions in the franchises discussed on this podcast.
The Wolf of Franchises:
I kind of just want to start at the beginning. I mean, so you founded Crumble right? With your cousin Sawyer back in 2017?
Jason McGowan:
Yeah, so me and my sir cousin, we both loved cookies. We wanted to work together on doing a business and we’re like, let’s go do something fun. Let’s go do cookies. And a lot of times people think that we had this grand, huge scheme marketing plan, business plan that we’re going to just conquer the United States and cookies. And what’s interesting is our very first location that we got into was set to be demolished in six months. So we’re like, Hey, if this concept fails or it doesn’t really work, we don’t have a five year lease on our hands. So it was really just the side hustle for both of us to really just do something really fun, bring technology, because I come from a technology background, so we’re from the branding marketing background, and we just kind of came together and let’s do some cookies, let’s see if this works and have some fun with it. So it really started off in this really small little kind of hot almost with a set to be demolished in six months. So that was kind of the journey, the starting point for Crumble Cookies.
The Wolf of Franchises:
So it was a six month lease on that first location. Yeah, I’ve seen pictures of it looks a cabin.
Jason McGowan:
Yeah, it totally looks like a cabin. It was a six month lease and we’re like, well, I’m not sure if we should even do this business. And we’re like, well, let’s just go for it. It’ll be fun for six months. And that’s kind of how our journey began. And even with our equipment, everything, we just started ordering equipment, ordering all these different things, and it came to a point where we’re like, okay, let’s get the product going. And by the way, you should never do this. You should always have a product first. <laugh> the business first before, so we did a little bit backwards, but we just got going and we started mixing cookies and we’re like, we have no idea what we were doing at all. Yeah, our first cookies looked like just complete pancakes. We were just like, this is going to be a total failure.
And it kind of was an interesting thing though, because it really humbled us and said, okay, we don’t know anything. We need some help. So we hired a local baker to teach us basic principles. We went all over trying to figure out what we were going to do. And I come from the software world and the software world, you kind of AB test something. So in kind of the food world, you call it taste testing. And so what we decided to do is we said, okay, we’re going to take this cookie, this chocolate chip cookie, which is the most important one to get, and we’re going to taste test our way to the perfect chocolate chip cookie. And so what that meant is we would take this cookie and we’d change out ingredients and we would go to local gas stations, our friends, our family, and we’d just have two plated cookies and we would say, which one tastes better? And so we just kept doing that and optimizing until we came out with this chocolate chip cookie. The hardest debate was probably between milk, chocolate chips and semi suite.
The Wolf of Franchises:
I got a comment on Twitter about that. Someone was like, why do they, it’s before this. I was like, Hey, I’m interviewing the founder of Crumble. What questions do you have? And that was one of them was Why don’t they use semi? What
Jason McGowan:
The heck? Yeah. Well, and I’m a huge semi-sweet lover, by the way. And my partner Sawyer, he’s a milk chip fan. And so we just were arguing about this and trying to figure out, okay, now it should be, it should be milk. And so we just decided, Hey, we’ve come this far, let’s just taste test it, and let’s do a poll. So we did a poll on Twitter, 70% of people preferred milk chocolate over a semi sweet chocolate. We taste tested it out, same thing happened. And even since then we’ve done sales different, put both of ’em on the menu at the same time and just chocolate chips just keeps beating out semi suite much to my dismay. But that’s how the cookie crumbles, I guess.
The Wolf of Franchises:
Yeah. Well, hey, when you’re AB testing that, this is before you even started franchising, right?
Jason McGowan:
Yes. Yep.
The Wolf of Franchises:
Okay. So cause it sounds like when you signed that six month lease, it sounded more like it’s potentially a part-time thing. So were you and Sawyer working day jobs back then?
Jason McGowan:
Yeah, I was working, I did work for Ancestry and Sawyer was going to school, so this was just kind of a side hustle just for both of us to just do for fun. And even at the time there was not, DoorDash wasn’t really prevalent, and so there’s no delivery services and I just loved technology and I always kind of had this thought about one day kind of doing something similar to DoorDash. So we started off with cookies, but we stayed in cookies obviously and we just got started.
The Wolf of Franchises:
Fascinating. Well, I obviously want to get into the growth story cause it’s been pretty just if people can imagine what you want to see, if you buy a stock, you just want it to go up into the right. That’s basically been the Crumble franchise system. But before getting to that, I mean I want to dive into things that I’ve seen that you guys do really well. So for instance, the branding, you know, guys are known for those pink boxes and they even have, you have specific sizes. You have a one pack box, a four pack, I think a six pack, 12 pack, et cetera. Who came up with that? And I mean, some of them I got to ask, do you guys use a specific supplier? Because some of those boxes almost look custom made.
Jason McGowan:
Yeah, I mean they are custom made. So first of all of our boxes are custom made, the sizing dimensions, everything like that is custom domain. What was interesting is our four pack box, as we were looking through a boxes and we wanted to be different, unique and special from other competitors and that sort of thing. And we thought, okay, what can we do to be different? And we did a little competition at Utah State, and that was one of where our first location was in Logan, and it was a business plan kind of competition. And all these students came up with these just amazing box ideas and there’s a box that kind of stood out. It wasn’t exactly how it was today, but it was kind of sliding out, but it was elongated and just, it just felt different. And something that we really look for at crumble is just the little details and how you feel and what the experience is when you’re kind of interacting with our products and our services. And that was something that just felt different and when you held it, it just felt like special. And so they became the winner. They won some prize money and that kind of kicked off our four pack box that kind of just looks a little bit unique and different in the baking world. So that’s kind of where we got our idea and how things got started.
The Wolf of Franchises:
That’s interesting. So was that where Sawyer was at school or did you guys just find out that this call is putting on a competition and it did the competition partner with local small businesses?
Jason McGowan:
Yeah, well, it was just us and it so did go to school there and I believe it was a department chair and so knew them and said, Hey, let’s give it a try. And it was kind of something to help them, but it actually turned out to be really helpful to us as well. So,
The Wolf of Franchises:
No, that’s cool. Well, that’s smart too. Just you’re the first business that’s come on that’s kind of outsourced almost innovation to college competition, but it’s cool. So branding has obviously been a big part, but so is social media, and I can speak to this just from what I’ve been trying to do on Twitter and with my newsletter, growing an audience is really hard and for people that don’t know, I mean crumble across their social media channels. I mean, it’s millions of followers. I know this, I think I took these notes in end of July, so I’m sure it’s higher, but TikTok five and a half million, Twitter, half a million, Instagram, 2.1 million, YouTube, 900,000 subscribers. That’s insane. So yeah, I guess where to even start, everyone, every brand wants to have a ton of followers and increase their brand awareness, but getting that outcome is difficult. So I guess just as an organization mean, how did you guys approach content and think about the best way to leverage it to get that outcome?
Jason McGowan:
No, that’s a great question. So I think first and foremost, you have to have a product that everyone loves you have to build. So you can’t kind of decide you’re going to go and try to build all this great stuff and not have a great product. So I think that’s first and foremost. So assuming that’s kind of there for everyone the next thing we did is really engage in social media. And what I mean by that is most companies, they’ll go and they’ll post social media one, it’ll be the same across all platforms, and they just kind of post it and that’s it. Well, we’re really engaging with our customers that are on there. So we talk to anyone who dms us, we try to message on comments. So we’re really, really active in the conversation when people are interacting with us. That’s even from the early on places.
But again, where you are is really, really important. So when Instagram started, obviously it started when there was a need to have a better camera. So there’s lots of filters and so photography and that sort of thing becomes really important on Instagram. So what was our strategy or strategy was to go leverage what the platform was already uniquely tailored towards versus trying to push our own content. Does that make sense? And then TikTok trends started on TikTok and it’s all about video and about rawness and all these other different things. And so when we got started on TikTok, we said, okay, let’s just leverage the platform the way it was meant to be leveraged instead of just trying to make it shoehorn into the content that we had. And so when we did that, all kind of engagements started happening and we noticed one thing that happened is people started reviewing our cookies and saying, okay, this was an eight out of 10 or a 10 out of 10, or sometimes three out of 10.
And you’re like, okay. So it was an interesting trend that started happening and rather than kind of fight against it or hey, we don’t want them to, we just joined in, we just said, okay, let’s do this. And so we started doing ratings. We created a hashtag called Taste Weekly. And so we just really leveraged the platform where the platform wanted to go. And even today we have billions of views on TikTok, and it’s all just from building content that’s unique to that specific platform. So I think that’s key is engagement and get some engagement. So keep being engaged with your followers, your customers, your comments, your dms, and then also creating content that’s kind of just accelerates what the platform was meant to be and it’ll feel a little bit more natural. So those are the things that we did to really start kicking us off and allowed us to get some followership combined. Of course, with the best cookies in the world, doesn’t hurt either,
The Wolf of Franchises:
<laugh>. No, for sure. Completely agree. Product comes first. But yeah, once you have that, obviously you have the ability to do what you’ve done. But I completely agree. I mean, for one, when I first started out, I still try to, it obviously gets difficult to see scale, and I’m currently a one man show for my content,
Jason McGowan:
But you’re doing an amazing job, by the way. I love, I followed you even before you posted anything about us, and I love your appreciate content, and I think that’s another good example of how you create something unique and using threads and those kinds of things to really leverage the Twitter platform. So similar thing, but it just became really engaging for a lot of people. So kudos to you for picking up that trend and seeing it.
The Wolf of Franchises:
I appreciate that, man. Yeah, the Twitter threads that That’s exactly right. It’s unique to Twitter and it’s a way to build a following there. And I’ve started now in the past few weeks really trying to build on LinkedIn and just like you said, I knew LinkedIn was different and I can already tell there there’s ways to make your content feel more native to the platform. Yeah, I mean that’s really the best advice I think for, if there’s a creator listening to this or someone trying to be a creator or running a brand account, do you really can’t repurpose one piece of content across every platform and you have to tailor it to the platform.
Jason McGowan:
Yeah, no, I agree a hundred percent. And I think the other thing too that I would note on that too is that notice what happens when your content is posted and how people engage. And what I mean by that is, so we originally started posting on TikTok and we started having some dance videos in there because that’s what the platform was meant for, right? Yep. But we noticed that for our brand, that wasn’t like, it was more about the rawness and the realness of the ingredients and showing that particular part. And so you got to be careful because sometimes people might say, okay, well we should go do all dance videos on TikTok, which the platforms are already changed and even from when it first started, but we noticed what was engaging. And so also looking at do what the platform was meant for, and then notice where your niche is or where your engagement is on that platform, and then kind of leverage that and step on that, the gas, when you find that
The Wolf of Franchises:
For sure. I think that’s amazing advice icon. You get a sense of it too as you post more and more content. And once you do get that sense of what type of post work, definitely just lean in on it because that’s when you really see the growth. But what I’m really impressed about, and again, because I’m actively trying to build an audience is how you guys have gotten so large on all these different platforms. So did you start on one platform? What was the first one I guess you started on? Or did you go YouTube, Instagram, Twitter at the same time?
Jason McGowan:
No, and we didn’t. So first thing we did is we went on Instagram and Facebook. So early on I was kind of a big facebooker. This is five years ago. And so was like, no, it’s all about the Instagram and it’s about the Gram at the time. And so we went on both of those and just great, amazing brander, and he’s just got a knack for building those brands. So anyway, so he posted and started creating this kind of unique following on Instagram, and we had it on Facebook, and that’s just kind of how we got started and we started building it from there. But once TikTok came out, and I, I’ve been in social media for a long time, so I’ve built social software. I mean, that’s kind of been my career as in social software. And I know early on when you can get on the platform early on, if it’s going to be a platform that grows and scales, it’s just one really inexpensive, whether it’s from ad dollars or just gaining the audience is just, there’s not as much people that you’re competing for.
And so when TikTok came out, I remember sitting down with the team and saying, guys, we need to go after TikTok. Nobody’s business. I know it doesn’t have a lot of followership right now, but it will. And so we were just early on, which really helps gain that big following. So even if you look at Twitter and some of the follow ships that they have into the hundreds of millions, it’s like people that were early on the platform, people are following people, it’s all new. People are excited. And so there’s a huge opportunity when a new platform comes out, if it’s going to be big to just jump on it immediately. Of course sometimes you have dus and that sort of thing, but that’s kind of what we did to really leverage it. And then on top of that, we use technology and those types of things to cross promote. So if somebody’s a follower Instagram or TikTok or on our mobile app or that sort of thing, we do different techniques. I don’t even know if I want to share some of them, but they’re just techniques that we use that cross promote and then grow followership on all the other platforms.
The Wolf of Franchises:
Yeah, well, I’ve seen in the Crumble app, you get, I think you call ’em crumbs or something about rewards point system where I’ll get points for following you on Instagram or TikTok, which I love because it’s a great flywheel where every new follower helps you reach more followers, which is potential new customers, and you’re incentivizing them to use the app. So it’s just a pretty powerful
Jason McGowan:
Flywheel. You drive ’em out to the app. Yeah, then the app. Yeah, exactly. Yeah, so great catch on that one. But yes, that is a huge part of it too. And so you start now when we add a platform like YouTube or whatever, it’s just you start off really slow, not much engagement, and then all of a sudden it just kind of hits this tipping point and all of a sudden people start engaging and then you respond to them and it grows from there.
The Wolf of Franchises:
Definitely. I mean, I guess just on TikTok or you said you have a background in social software, so are you a software engineer at heart?
Jason McGowan:
No, so I’m more in the product design. So a lot of the UX stuff that we see, one of our team members is phenomenal. Him and I work really well together, but most of my, IT is more in the UX side of things. So design, product management ux, all that sort of thing is kind of my, so more software design versus engineering. But yeah, I do know how to do basic coding and and very basic and yeah, I understand engineering really, really well, so.
The Wolf of Franchises:
Gotcha. And when you were looking at TikTok, because I think it came out in 2016, I don’t really remember. To me it came on my radar probably sometime during covid is when in the deep into the lockdowns is when I realized, oh, people are spending their time on TikTok, but do you guys just take a gamble and say, Hey, we have no idea if TikTok is actually going to be big, or were you bullish and saying’s going to be an incredibly popular app, let’s go there right now before everyone else catches on.
Jason McGowan:
We were really bullish, really, it was literally what I had mentioned several times that we needed to go on it. My partner Sawyer started creating an account, he’s really trendy, understands the new trend. So he started getting us going on it first, but then we were like, look, we are not fully engaged here. We need to build the video team. We need to do whatever we can. We have got to jump on this. And it was almost like a, we need to do this now we’re moving too slow. And so the team kind of really rallied it around. We have an O K R process for how we run the company, and it was one of our big objectives and the team just jumped on it from all fronts to really kind get us going. But one of the things that I saw is what’s interesting about TikTok is kind of how they did their growth.
So most social networks, they do it through word virality, they do it through word of mouth, so which is the best for especially social media. But what TikTok was doing is they had powerful word of mouth and they had powerful virality and tools to share across, whether it’s their logos bouncing around on videos that let you export all these other different tools. What was interesting to me is they were marketing heavily on competitor platforms. So they’re spending top ad dollars on Facebook and on Instagram, which I’m surprised, maybe there’s anti-competitive reasons why Facebook just let that run, but they just let it run. And TikTok just started just blowing up user counts like that. Again, that was just bringing ’em into that flywheel that they had there. And so I just started seeing this and I thought, this growth is going to be phenomenal. I mean, they’re spending so much capital, so it’s combined with a great product and capital.
And of course the algorithms were just insane. So most social media networks hit network effects when you have the number of followers or you have a number of friend count on Facebook. So there’s all these network effects. But what was interesting about TikTok was similar to YouTube is you can get some usage and enjoyment from it without any followers. And so, I don’t know, I love social technology and hate it sometimes too, but I saw that there and I thought, this is going to just be huge and I turned off to be right. So I’m wrong a lot of times though. But that one I was right on. So
The Wolf of Franchises:
No, that was a great bet that you guys made. So looking back on what you have today from a social media perspective, you do have quite a large presence on multiple platforms. And recently I was listening to just to give you some context on the question I’m about to ask. So there’s a company called Nighted. They manage massive YouTube creators and help them basically do sponsorship deals and potentially even build businesses. Cause they work with guys, Mr. Beast, who have massive followings. Anyway, so I heard the founder of that company kind of talking about the difference between YouTube and TikTok, and he was a little worried about TikTok in the sense that he felt like because it’s a short form video platform, that it’s actually harder to build loyalty to a creator if you’re on that platform versus YouTube. He is like, Hey, look at Mr. Beast. People are watching 20 minute videos of him every week Anyway. So what I’m getting at is he was bullish on YouTube going into the future as still the best platform. But I’m curious just, do you guys think TikTok has been incredibly powerful for you? Or do you think, I know you do a weekly show on YouTube, is there one platform where you’re like, this one’s most important to us?
Jason McGowan:
Yeah, I think that’s a great question. So I think Mr. Beast, what he’s done has been absolutely phenomenal. Not only just guy’s an amazing dude, how he helps with his charity, the passion that he has, the energy that he has to put into his content, his videos, he’s just at a whole nother level. He’s the good of, he is of YouTube, frankly, and no one’s even touching him. And I think it’s because he’s just did something totally unique, special and just is something just for him that he felt. And he’s the king of looking at engagement, checking thumbnails, doing all these other different things to really,
The Wolf of Franchises:
He lives and
Jason McGowan:
Optimize. Yeah, he does. So he’s got it so much that he just understands little nuances and design what that will do and attention spans and all that sort of thing on YouTube. So I guess my thought is I would have to kind of agree the long-term content definitely would probably be on YouTube and you can create more brand affinity. What’s interesting though is, and maybe I’m wrong here, someone like Mr. Bist or the others would know better, but it’s harder to get a jumpstart there because a platform’s been around for a while. So it’s kind of this long slog. So it’s like, what’s interesting about TikTok is the algorithm doesn’t really care how many followers you have. It really cares about how engaging the content is. And so with TikTok, you can blow up fast, like lightning fast, and YouTube’s going to take a while.
So I mean, if I were to start something today, I mean maybe you do a combination of both where you get your start potentially on TikTok, you leverage that and push you into YouTube. But again, I don’t know someone like Mr. Beast or these others would be way better at these things. But I do think that there’s a potential opportunity to convert yourself. Maybe not, I don’t know. But if you look at Mr. Beast, he again is on Twitter and he’s on these other platforms and of course he’s gained huge fellowships because he has it, but it has made him to leverage his brand to just do phenomenal things like with Mr. Be Burgers with his chocolate bars, just Beast Bowls. So this guy has just selfishly focused on just giving and giving, which is create this brand loyalty that lets him just even do more and more bigger things every day. So I think YouTube is that platform, but I think he’s understanding that the leverage that he can have in the real world through businesses combined with his ability will be even huger than just ad dollars or other things that he’s getting from YouTube. So
The Wolf of Franchises:
No, for sure. Yeah, it’s going to be fun to watch what he does. But I do an important thing you did say there is YouTube has been around for a while and I know it’s different from TikTok and that if you’re starting a channel on YouTube today versus TikTok, it’s going to be harder to gain subscribers. But I would say those subscribers probably are more meaningful in the long term. And I mean, broadly speaking, how much of crumbles success, and when I say success I guess mean, do you guys have any way to quantify, say the sales or the foot traffic that all these social channels are bringing into your stores? Because to me it’s a big moat that you guys have as a brand. A lot of franchises don’t have millions and millions of followers. So just how do you guys think about that and are you able to quantify it in any way?
Jason McGowan:
Well, I mean we can quantify it somewhat. Attribution is just a marketing problem that has yet to be solved in the world. So it’s, if I knew that then I would be of even a much bigger business. But we do some techniques to find out whether it’s at the pos. What’s unique about us is we actually built our own custom, our own mobile app, all of this stuff so that we can understand the customer from social media all the way to the POS purchases. So we’ve been able to build all that custom so that we can see where it’s going. So in answer to your question, yeah, we definitely see leveraging certain platforms, we see new demographics come in, we know why people are coming into our stores that sort of thing. And social has played an absolutely huge role. And some of it’s by design and on purpose and some of it just kind of naturally happens.
It’s like that’s what happens on social. People can’t sit down and write this thing and be like, okay, this is how I go viral, do these 10 things. Yeah, you need those 10 things to go viral, but that doesn’t mean you’re going to go viral. And so I think with Crumble, we focused on just a relentless focus on just making the best cookies in the world and then really our focus on just really telling that story through social media and it’s kind of create this unique ecosystem and family on social media through the weekly rotating menu. So as we rotate every single week, it’s kind of like this experience that everyone in America gets to have with each other. It doesn’t matter whether your friends are from the east coast or the West Coast or middle America, everyone gets to be talking about this experience, good or bad, about what’s happening with the crumble, crumble, we launched everything but Bagel.
So that was on top of my mind, <laugh> a week ago, or maybe it was two weeks ago, and kind of all fun stuff. But anyways, so you have this experience that all of a sudden, like you said, becomes this moat where competitors of things, it’s hard to be like, okay, let’s get rally around the cookies of this person that has five stores or 20th stores, even a hundred stores, because it’s just not kind of the same experience. And so it’s been really, really fun watching us do that. We actually got to the point so much that Instagram and these others would actually flag our videos and almost take ’em down because we’d launch exactly at 6:00 PM every Sunday Mountain time. And it would just, there’d be so many comments and likes that they thought something malice was going on. And so the several times they had had to, they would take the video, the video would come down and we would like, no, this is a legit video.
And they would just were so confused by it. But we had a lot of that consistency of having it launched every single week at the same time as caused our whole fan base to be like, they’re sending alarm clocks, they’re doing all kinds of things. And so when that happens, they just know that crumbles going to be there and it lets them just have this fun moment where they can share and talk about the flavors and share something exciting this week. And that used to happen with television, but television’s all now digital and seasons get launched at a whole time and people are watching at different hours of the day and Dbrs there recordings there. And so there’s this moment where something launches at the same time where people can talk about doesn’t happen very often. And so it’s been fun to see that happen with crumble and see the engagement and the ability for people to friends and family to get together and really spend time communicating about something as simple as cookies, but still super powerful.
The Wolf of Franchises:
No, for sure. And even just the way you talk about people getting to rally around something that kind of leads me to what I think is an important part of this whole crumble equation, which is the rotating menu. How impactful do you think that is? Because from the outside I look at it and especially when you think of it in the context of your social media following that it’s a way to keep people really engaged where maybe they have a favorite flavor, but since it’s a weekly menu, there’s this scarcity aspect where you have to keep your eyes on crumble to see one of your favorite flavors coming back out. But it’s also right, I know that whole YouTube unboxing show has seemed to have been pretty powerful for you guys. So yeah, just curious for your thoughts on when did you come up with that and again, how impactful do you think that is?
Jason McGowan:
Yeah, so we came up with it in Bountiful Utah, and I remember sitting in this small building, it was our first franchise location, didn’t know what we were, still didn’t know what we were doing then. And we were sitting around the table and we were with my co-founder, Sawyer’s parents, and this was our first franchise. And when we got started in Logan, we just kind of started, kept adding cookies just randomly. We added the midnight mint cookie because we’re like sales that time we were open until a little bit later and we’re like, sales are slow from midnight till 2:00 AM Let’s just launch a cookie that’s only available at midnight. Call it midnight. So we just, it’s just random. I wish it had some big strategy, but we just, let’s build some cool, we just kept thinking about let’s build cool cookies and tasty cookies.
And so we started adding these flavors to the menu and we get going to Bountiful Utah, and I don’t remember how many we had at the time. It must have been nine, 10, or 11. We’re like, okay, we got to just have ’em all on the menu. Cause this is the experience of new people coming in. And we had ’em all on the menu and it was a struggle because we couldn’t keep certain flavors in stock. We didn’t know for different flavors. And so just customers got frustrated. The experience was not as great. People would come in and be like, well, I really want this one. We didn’t even have the technology be like, okay, well we don’t have this one, let’s take it off the menu. So all these different things came and it was the end of the week and it’s emotional. Anyone who opens a crumble in the first week that they owned a crumble, they’re like, I should never have done this.
I don’t care how much money I have, dunno how much success, this is the worst idea ever made. And so it was one of those moments we’re all sitting around the table, there was tears, there was just like, what are we going to do? And we thought about it and we’d rotated. I think we’d rotated daily and we did all these other different types of rotations and we just sat there and we, it makes most sense the rotation. And that’s kind of when we started forming the strategy with Sawyer and his parents. We started forming the strategy here about doing this on a weekly rotation from an ops perspective and from also that seems like the right cadence we’re closed on Sunday, it closes down, it lets people recharge. And so from an ops perspective in that we launched it and it’s one of those things where again, it’s just, it wasn’t just a thought and idea, but when we saw it was successful, we just started putting all of our power behind it.
And we’re like, Kate, we’re doing weekly videos, just going to go, if we’re doing this, we’re going to go all out. And that’s kind of how our weekly rotating menu just kind of started, was on store number three in Bountiful, Utah and just out of necessity. And that was the opportunity that it was born. And there are other cookie companies that were doing flavors every so often or there was no kind of consistency to it or whatever. They would rotate, but it, there was no consistency. It was just random or they’re doing once a month or something like that. But we just again, wanted to be unique, our own selves. And that’s kind of how it started.
The Wolf of Franchises:
And I can definitely see how logistically it makes it easier for you guys. And then also as you mentioned, the customer experience, right? Cause if you guys can prep accordingly for flavors of a week, you can stock up accordingly. And then that way customers are coming in and hopefully getting what they want. So that’s interesting. And
Jason McGowan:
That decision is, I was just going to say that decision transformed the whole business in so many ways from logistics, supply chain, marketing support for franchise partners, that decision how hard crumble is because of that decision has been just ginormous. The amount of technology things we’ve had to build based upon just that has been phenomenal, but we wouldn’t have it any other way.
The Wolf of Franchises:
Yeah, and I mean, how far ahead are you guys in the sense of, do you know the flavors for the next 26 weeks already?
Jason McGowan:
Yeah, we have the flavors until next year. I think we’re almost into Q1 or something, so, so we do them, we r and d them, we, we have a full team. That’s cool. My partner Sawyer is really heavily involved with the cookies as far as coming up and working with the r and d team to do ’em every day at three cookies, new cookies waiting. So it’s a little dangerous around here, but it’s fun.
The Wolf of Franchises:
Yeah, I was going to say, you guys, I hope you have a gym at HQ that could get top.
Jason McGowan:
Yeah, we don’t, but we probably need to get one good call out.
The Wolf of Franchises:
Yeah it’s funny man. Well, I also want to jump into the tech aspect as much as you’re able to share. I mean, you said you guys built your own internal point of sales system. So most brick and mortar businesses are using Toast or Square or any of these billion dollar P OS systems. So did you custom make the software and you’re buying someone else’s hardware or is everything made from crumble?
Jason McGowan:
So we use iPads and we custom-built the entire software suite. Everything, just everything. And what had happened, and it’s really was just that of not finding something that worked. So a lot of these other services at the time, they didn’t have loyalty shared across platforms. They didn’t have or across locations. There’s no franchise software really built that was really working. And so again, we wanted to have the customer experience from front end be just completely great. And at the time with self-help kiosk, we’re coming out barely, and we need this thing to be so good in UX that literally if we flipped over our PO system, a customer could just use it without us even talking to them. And that was the vision for it or also the back end to the loyalty, the phone numbers and all these things that make great two touch experiences on purchasing cookies and stuff and tracking and all those kind of things.
We just built it. So we went with the engineering team, they said I was crazy. They’re like, we can’t build our own POS system from scratch. We shouldn’t do this. It’s so much work. And that was one of those we’re doing it. And kudos to them though, they just slate it and just, I don’t know if you’ve interacted with the POS is a crumble, but it’s just so smooth, it’s seamless the way the cookies fly into the boxes. Just every little detail that you can’t create with an out-of-the-box POS system is just part of our overall experience of crumble. So again, it’s not just about cookies, it’s about, and not just about bringing people together, it’s about all those little pieces of experiences when you interact with technology or boxes or anything that we just want it to be the crumble way. So that’s what we did.
The Wolf of Franchises:
Well, I got to imagine, I mean that is a major differentiator and edge that’s probably given you, right? Because to me there’s three sides of that, as you mentioned, the way the customer interacts with that system, but then also for you guys at corporate to oversee what’s happening for what customers are coming in who maybe it’s some connection to the app where you kind of view a follow through on promotions there, but then also write franchisees system-wide, probably have some type of data and visibility and KPIs that they’re able to get a sense of from this. But that p o s system kind of sits in the middle of all that.
Jason McGowan:
Yeah, it does. And so we got the KDS screen, we’ve got our mobile app, which is, by the way, we beat out almost every single food and beverage app other than McDonald’s almost every single day. Sometimes Starbucks creeps up on us but other than that, and you’ve got DoorDash, but we’re the top three. And it’s just so funny because my whole career, you’re trying to build technology that will reach the hundred hundred top apps in the world and it’s like, I want to build this technology and here we have this cookie business and then we built the technology and our apps in the top 100. It’s like top 50 or 60, it just depends. But we’re able to beat out these brands that have 10 times the locations than us, 20 times the location than us just from doing all the intricacies of technology and growth hacks and all those kinds of things that are needed to really get those downloads of the app.
So we’ve got that mobile app that we custom-built, got the pos we custom built, and then we’ve also built our own internal tools for our franchise partners. So one of the things that’s helped us really scale and manage quality at the same time has that it’s been that. So we know all the metrics because we have own all the stuff, we pull all the metrics in. So how long are our wait times, what’s the average order size, all the stuff you could get in some of the other systems. But there’s a lot of custom unique stuff that we have that let’s us get further insight. And so what we’ve done is we’ve created these dashboards for our franchise partners so they can internally see how they’re benchmarking compared to other franchise partners. And hey, this store is great at ticket times, why is that? And it allows us to create trainings and all kinds of things like that around it to just give them their own tools to help them manage themselves.
So we call it the crew app and it has all of our, it’s got a social network essentially, and it’s got a newsfeed in it. It’s got your ability to see stats in it, it’s got driver technology, so that for delivering for drivers, it’s got recipe updates, it’s got calculators, all kinds of things like that in it to help them figure out how to run their business. And it’s really, that’s helped at scale. Recently we’ve had a couple posts and people are like, it’s crumble growing too fast. They’re like, we’ve seen a couple these cookies that are messy. And what’s interesting is we know all the data behind the scenes and if you go from 10 stores to 500 stores and you have 10 bad cookies in a week in a store, it goes from 10 cookies, it goes to thousands of cookies that look bad online.
So you get a lot more online. But in general, per store, our cookie quality is phenomenal. Our bakers are just amazing and we’re able to give that feedback to them. So Bakers can kind of see, hey, what is our rankings? What are our quality scores? Whenever customers purchase cookies, we give ’em a link at the end and they’re able to upload custom photos, which goes to a system which we have AI running on it that helps detect quality and other things and detects the cookies and sends that feedback to our franchise partners and to our crew members so they can say, how well am I doing at quality at my store? So again, quality’s phenomenal across the board and that has really, those types of things have really helped us see from bird’s eye view, when you’re adding 50 stores a month, it’s like how do you scale that and manage quality and the team and the technology and all those things have just really helped and execute so well on that.
The Wolf of Franchises:
Yeah, I mean, couple things F first, it’s just ridiculous that you guys, your app has more activity than Starbucks on a given day. Insane.
Jason McGowan:
It is crazy. The
The Wolf of Franchises:
Crew app, I mean that sounds like that kind of is probably the behind the scenes look that only the crumble people get a look at. But yeah, I’d imagine that’s just a massive game changer for the insight you guys have and the decisions you can make based off that really helps you as you scale. And yeah, I mean that kind of brings me, right, so founded in 2017 with that first location on a six month lease, today you’re at 592 stores, at least according to your website. I, so what you just said, that’s something I get all the time on Twitter is like, oh, they’re just going to be the next frozen yogurt franchises. They’re growing too quickly, they’re going to collapse. And I’ve actually, I’m the contrarian on Twitter with this where I’m actually like, Hey guys, I don’t see it. The FROYO franchises never had the average unit volumes that Crumble currently has.
They definitely never had the social media followings, which to me is that’s a differentiator and a bit of a mote. And I don’t know, now I know a little bit more about the tech given what you just said, but I knew that you built your own point of sales system. I’m like, there’s never been a franchise this that’s actually has these things that they can claim to. It’s a more sophisticated operation with my insight, and again, the numbers have just been bigger than Fios average unit volume for a mins or someone was 500 to 600 K is what they topped out even at their peak. So I’m guys, I get it, they’ve grown really quickly, but they’re different animals. Yeah, I mean just what’s your response to that? Or even just what’s it been growing so quickly? Did you ever say, Hey, we can’t sell anymore franchises this year?
Jason McGowan:
Well, we do say that in certain markets. So I think I look at it from a very simple standpoint, and I don’t look at it as like, Hey, growth on numbers and all that. I actually look at it on unit economics, okay, how well is it are individual stores doing and how are the economics on those stores? And that really helps us drive growth on markets. We can go into how many, what’s the distance between stores and that sort of thing. We have a mantra, which is no store’s going to fail at crumble. So we have all these other brands, all these businesses are closing stores all the time opening them and they’re just throwing Spy on the wall and trying to figure it out. These certain tools that help us predict what sales and things like that are going to be in certain areas.
And so far it’s helped us really well. We have never had a store fail ever. And our stores that have been there since the beginning, our same store sales of those are phenomenal. Growth is happening. Those things are all there. So the unit economics look really, really, really strong now and supply chain and all these things have hurt margins in a small way on some things. But we’ve recently made some big changes in strides to really help bring that back. And again, those hurt margins are those margins. People would die on their herded margins on other franchise concepts compared to ours. So looking at other franchise concepts, margins are phenomenal. Looking at our individual average unit volume is great, same store sales are great quality, scaling great, but there’s things that we still need to work to on our service. And there’s a lot of other things that aren’t as good as where we want them to be.
So it’s not like that’s perfect painted picture or storyline. I’m not saying we’re perfect by any means, and we have a lot of work to go in a lot of areas, but where we are today and what I see, and it really comes down to are cookies like frozen yogurt or are they donuts where they’re, they’ve been around for a long time and I actually wonder, and I’ve challenged the team and all kinds of people that anyone who has ever brought that’s thought up, I’ve always said, do you eat more cookies in your life or do you eat more donuts or yogurt? Frozen yogurt just in general. And cookies have been around for a long time, by the way. We’re not like the first ones to come up with cookies or something. So cookies have been around a long time. There’s been a lot of franchise concepts that have been around and actually lasted the test of time.
I think what we’ve done as we’ve said, Hey, how can we make cookies even better? And hey, how can I scale and provide a better experience around cookies? And I think that’s increased our volume, but cookies have been around for a long time, they’ll be around for a lot longer. And I’m very, very bullish and I’m kind of in your camp too as well, which is hopefully all the things that we’ve built allow us to be around for forever. We’re building a brand that’s meant to stand the test of time. I’ve gotten so many acquisition conversations and offers and people talking to us all the time and we’re just like, I don’t think people understand we’re building a brand that’s a legacy brand that’s going to be further for a while. We, not even just with cookies, but our mission to bring friends and family together over those cookies is just a mission that we’re just bent on.
Just making sure that in a world of just craziness and just what social media and all these things is our motive to bring people away from all that. And we’re not like going to change the world overnight and all these things, but we are going to take it so that maybe you have 30 minutes or an hour, you’re getting away from all those things and you’re just spending time with real people and you’re connecting with them and you’re laughing and sharing moments with cookies. Or if someone has a breakup and your friend sends you those cookies or your family’s across the country and you’re both jumping in your car and video chatting and having cookies, all these things are happening. And so we’re really on a mission and that’s really our purpose. And so we’re not here to be a flash in the pan. We’re not here to sell quickly. We’re here to build something great and be something that is meaningful in people’s lives and that’s what we’re trying to do. So I feel very bullish and hopeful and all of the data around it showing me that crumble will be here to stay and stay for forever. So
The Wolf of Franchises:
I love the mission, and I do agree with you too. Cookies is, it’s been a massive category in food and beverage in general, whether or not it’s a franchise concept, selling them or just Nestle Tollhouse selling cookies in stores and amusement parks and wherever else. So yeah, I definitely think as a category too, it’s just fundamentally different than a frozen yogurt.
Jason McGowan:
Yeah, absolutely agree.
The Wolf of Franchises:
And d, when people say, or when people are concerned, is it just a fad? Is that kind of just your thought is that cookies as a category has never been a fad and you’re bullish that crumble can, because I think it’s fair to say you guys have increased the popularity in cookies and you’re just confident that you crumble can continue to do that through everything you’re currently doing.
Jason McGowan:
And I think, look, it really comes down to like, well, people get sick of crumble after a certain period of time. Look at our rotating menu, look at the new things that keep getting brought out. Our same store sales and our early stores are just, they’ve been around for five years and those things look great. And I think people have just always, historically, I think they’re not a fad for mom when she’s growing up. True. When she’s Baker Bakers cookies, right? No one was like, mom, it’s been five years, 10 years, stop making me those chocolate chip cookies. So it’s just the things in the data and everything that we see shows that it’s not. But yeah, I mean obviously we could be wrong here, but I feel like pretty confident and I feel like everything’s showing us that it’s not, but you never know, so, but we’re feeling pretty good about
The Wolf of Franchises:
It. I can’t blame you based on the numbers that I’ve seen. So looking forward, you’ve almost sold out the entire country it looks like, based on the map on your website. I mean, is there international plans, is there plan, I think I saw maybe for a week you were doing ice cream or maybe ice creams and mainstay. Is there plans for more products? What does the future hold?
Jason McGowan:
No, that’s a great, so look, we want to be an international brand. We want to be in every country can. That makes sense. We want to be everywhere. That mission doesn’t just stop in the people of the United States. It really goes around the world. And so yeah, we’ll be a national brand, international brand. We’ve already made forays into that.
The Wolf of Franchises:
Okay.
Jason McGowan:
So we should have some announcements soon on that. But yeah, we’re already actively selling and we’ll have announcements soon. But yeah, we’re going to be an international brand. And I guess I look at it from just, again, that mission in that product promise and trying to just bring that across the world versus unit counts or whatever. We never sit there and try to figure out this many units or this, or we’re just trying to build something amazing and the system will tell us how far we can scale and how much we can scale. But yeah, we hope that countries all around the world love the cookies as much as we do and we’re going to find out.
The Wolf of Franchises:
Yeah, well that’ll be fun to watch. And I mean for you and you and Sawyer, right? I mean, so the fact that you guys haven’t taken any outside capital is wild. Just what you’ve been able to build purely from a bootstrap perspective is incredible. I mean, just personally, no one has to be a, doesn’t need an MBA to realize that, okay, they’re 590 stores, they’re doing over a billion in system-wide revenue this year. It’s obvious, right on paper, your financial net worth has shot up significantly based on the success of crumble. Just what has that been like? Was there ever one moment where you were just like, holy crap, I’m wealthy, like, or is it just been so quick that you can’t even stop to kind of enjoy and smell the roses?
Jason McGowan:
Well, you got to understand my family, my wife is the most frugal person on this planet. And so, okay we’ll be still clipping coupons. We could be trillionaires and she’d be clipping coupons. I mean, honey, let’s go to this place. And so I’m still living in the same house I lived in five years ago. I’ve been able to help a few people out, whether it’s family members or others, which has been really super rewarding. But I don’t really look at it like wealth doesn’t. Sure, it’s nice to have those things or be able to do what we want to do, but it doesn’t really, like, I’ve never started this company and I never sit there and think about how can I make more money? We just don’t do that. We really look about just building something meaningful and something that cares. So we have sat there and I’ve sat there and been like, wow, this is crazy.
Sometimes you look at it and my daughter and one of our favorite activities is to watch Shark Tank, and we were watching it actually last night, and they’re all getting on there and people were freaking out about these revenue numbers in the millions and I’m like, it just kind of hit me last night and I was like, wow, it’s crazy. <laugh> crazy how big crumble has become, and for me, I’m in it, and we’re just looking at just building great things and we don’t really think about all that kind of stuff, but I’m just incredibly proud of what the team’s built. A lot of times from that perspective, it’s like, oh, look what Jason’s story did. And yeah, we’ve worked really, really hard, but we’ve also have what we call franchise partners, and they have just been amazing. One thing that we did early on is we never advertised our franchise concept ever.
And man, that was probably one of the best blessings and decisions ever because the people that were coming in and requesting or learning more about our franchise business were people that just loved the product, they loved the brand they loved, they came into the store and smelt it and touched it and tasted it, and those were the people that wanted to come do franchises with us. And so we’ve been really intentional and deliberate with who we pick as franchise partners, and we just have some of the most amazing franchise partners in the world. And yes, we have relationship issues just like every other relationship, whether it’s marriage or friends or coworkers or whatever, we have all those things, but it’s just been the most amazing experience building this with over 30,000 crew members and hundreds of HQ members. So many people have given their hearts and soul into the brand to what it become, what it is today that I’m just like, that’s the part that I think I look more than, Hey, look how much money we have or whatever.
I just wake up and I’m like, I’m about to go work with some of the smartest people I know, bringing people the best cookies in the world, having these fun experiences. I get to toy around with building cool technologies all day, every day, and it’s just so much fun. And I think that’s what kind of gets me out of bed and just gets me excited every morning, is just working in with people that you care about helping other people become successful. If you ask my wife and my coworkers and even our Francis partners, if I look at and I say, what would be one of my biggest motivating drivers to get out and just slate every day, it’s actually our franchise partners. So customers are strongly up there, but I look at our franchise partners and I say, how can I make them successful? How can I make the unit economics work for them?
These people who took faith in us? We have people who have never run a business before, get a loan out, people who put mortgages on their homes to be able to do a crumble. People who quit being doctors or dentists or lawyers, all those high professionals, all these things have all happened, and it’s just so real. And so every day I look and I say, these people took faith and trust in our business, and how can I make it? That’s that a business that’s just so successful for them that it changes their lives. And so more than my own life was watching other people’s lives change. It’s just such a motivating factor to me. And of course, bringing these people together. So sorry, you got me a little passionate, excited there near the end, but oh man, I love it. I just love what I do.
The Wolf of Franchises:
Oh, that’s awesome, man. Yeah, and I mean, I think the fact that you’ve grown as quickly as you have and no store has closed, right? That’s a testament to what you guys are building and just the success of the concept and the support that you guys are obviously providing. So yeah, look, man, this has been awesome to have you on. I was super pumped to finally get to chat with you. I think my audience will be happy to hear from you too, both the ones who are thinking it’s the next rodeo and those who are kind of big believers like myself. So yeah, look, thanks a lot, Jason. And is there anywhere that people can follow along your journey, crumbles journey online? Yes.
Jason McGowan:
Well, thanks again for having me. Thank you to all of our amazing customers who’ve loved the product and made it what it is today. We couldn’t be here without you, and all those who are just curious about crumble are wanting to follow us. Just go to crumble cookies at crumble cookies on Instagram, on YouTube on go to Facebook. Just follow us on crumble cookies, and check out the weekly rotating flavors. Sorry if you get hooked, and you’re welcome if you get hooked.
The Wolf of Franchises:
Yeah, perfect. All right, well we’ll tag those social handles in the show notes, folks, and yeah, thanks again, Jason. We’ll talk soon. Thanks for having me. Thanks for listening to Franchise Empires. We’re coming to you soon with actionable insights to take the next step on your franchise journey. So make sure to subscribe on Apple, Spotify, Google, or wherever you listen.