The cookie conundrum: When viral demand meets permanent costs
4 Min Read
Consider Crumbl. Its rotating weekly menu and carefully cultivated social media presence helped turn cookies into events. Courtesy of Crumbl
The cookie is crumbling.
Crumbl, once among the fastest-growing restaurant franchises in the country, is closing locations and watching franchisees struggle. Chip City, which attracted $17.5 million in investment capital and expanded from a neighborhood bakery into a multistate chain, abruptly closed its remaining 22 stores in early October.
For years, these brands attracted enormous attention with oversized cookies, rotating flavors, social media reviews, and lines of customers eager to sample the latest creation. The very forces that helped make them successful, however, may have also encouraged expansion faster than their underlying businesses could sustain.
There is a lesson here that extends well beyond cookies. Social media has dramatically accelerated the pace at which consumer attention can be converted into business growth. Unfortunately, the economics of operating a restaurant have not accelerated with it.
Attention and demand operate on different clocks
A viral video can generate millions of views in days. A popular product can produce lines of customers for weeks. Investors and franchise operators see that enthusiasm and naturally want to capitalize on it.
But a restaurant requires long-term commitments. Commercial leases, equipment financing, construction costs, staffing, and franchise agreements are measured in years.
They remain long after the latest viral sensation disappears from everyone’s feed.
Consider Crumbl. Its rotating weekly menu and carefully cultivated social media presence helped turn cookies into events. Customers weren’t simply buying dessert. They were participating in something, often documenting the experience and encouraging others to do the same.
The concept scaled rapidly, reaching more than 1,100 locations by the end of 2025. Yet according to its franchise disclosure data, average annual store sales fell approximately 16% in 2025, to $1.14 million. The system continued expanding even as the financial performance of its stores came under pressure.
This creates a particular challenge for franchise systems. New locations generate additional revenue and extend the brand’s reach, but individual franchisees bear much of the financial risk associated with opening and operating those stores.
A franchise system can therefore continue growing while the economics of individual locations deteriorate. Unit growth may look impressive at headquarters, even as operators confront falling sales, rising costs, and increasingly difficult debt obligations.
One Crumbl franchisee in Kentucky closed its store and filed for Chapter 7 bankruptcy. Its liabilities included equipment financing and unpaid rent — a reminder that commercial obligations survive long after consumers stop lining up.
Chip City’s collapse followed a different path. Its shutdown involved financing difficulties, changing consumer spending patterns, and a dispute involving its former CEO. The circumstances differ from Crumbl, but both illustrate how quickly ambitions built around a popular concept can collide with financial realities.
Turning early buzz into long-term wins
The larger issue concerns how businesses interpret early success.
Restaurants have always faced the challenge of predicting consumer demand. Social media has made that challenge more difficult by providing an abundance of seemingly compelling evidence that a concept is working. Views, followers, shares, and opening-day crowds are real signals of interest. They are considerably less useful as evidence of enduring purchasing habits.
A customer willing to drive twenty miles and wait thirty minutes to try a viral cookie may have no interest in making the same trip a month later. The original purchase reflects curiosity and novelty. Sustained revenue requires habit, convenience, value, and satisfaction.
None of this makes social media a poor business tool. It can accelerate brand awareness and help emerging concepts compete against much larger established chains. Nor should businesses shy away from expansion when demand supports it.
The difficulty arises when management treats the extraordinary circumstances surrounding a successful launch as the baseline for an ordinary business.
Initiating the tough conversations
Before approving another fifty locations, restaurant leaders and franchise investors should be asking what happens after the excitement fades. How many customers return without a new flavor announcement? What do store economics look like when traffic drops 20%? Can the concept survive on the revenue of an ordinary Tuesday rather than the enthusiasm of a grand opening?
These are less exciting conversations than announcing another round of franchise agreements. They are also considerably more important.
There is a free-market lesson here as well. Consumers ultimately decide which businesses deserve their continued patronage. They can embrace an indulgence, enjoy the novelty, and eventually conclude that a premium-priced cookie no longer deserves a regular place in their budgets.
That correction is healthy for the marketplace, even when the consequences for individual businesses, employees, and franchise investors are painful.
The bottom after the drop should remind operators that the speed of consumer attention has changed, but the fundamentals of restaurant economics have not.
A million views can sell an impressive number of cookies. They cannot pay a ten-year lease.
