Dothan residents and Wiregrass cookie enthusiasts may see changes in the availability of Crumbl Cookies, as the fast-growing bakery chain has encountered a significant downturn in its operations and finances. The company, once a social media sensation with millions of followers, has closed at least 57 stores in 2026, according to industry reports, and is experiencing sharply falling customer traffic.
The financial challenges extend nationwide, with closures confirmed by Fast Company in at least 10 states, including California, Connecticut, Florida, Georgia, Illinois, and Pennsylvania. An unofficial tracker also lists stores in Alabama and New Jersey among those affected. While Alabama is home to 18 Crumbl locations, the company has not released a full state-by-state list of specific closures.
Crumbl's difficulties are evident in its sales performance. An internal company document cited by Restaurant Business indicates that sales in August 2026 were 70 percent lower than two years prior. Additionally, data from location analytics company Placer.ai, cited in an earlier Inc. report, shows customer traffic across the chain's more than 1,000 locations was down 32 percent from a year earlier.
The downturn has also impacted individual franchise operators. In Kentucky, Red Sheep St. Matthews LLC, the company behind a third Crumbl location opened by Rick and Emily Diamond in the Louisville area, filed for Chapter 7 bankruptcy protection on October 1 in federal court. The filing seeks to liquidate the franchise's assets and reported more than $352,000 in liabilities, according to Inc. magazine. This bankruptcy specifically involves the St. Matthews operation and not Crumbl's parent company or the Diamonds' two other, previously thriving, stores.
The Kentucky couple's experience highlights the rapid shift in the company's fortunes. In February 2024, Rick and Emily Diamond were celebrating the opening of their third location. Their first two stores were performing strongly, ranking among the top 25 percent and 15 percent of Crumbl locations for sales, according to a Nation's Restaurant News profile published at the time. Rick Diamond, a former accountant, sought to become his own boss after the pandemic, and Emily developed an interest in Crumbl after visiting its original Utah store. They were confident enough in the business to open a third store next to a Kroger grocery. However, the situation dramatically changed within two years, leading to the bankruptcy filing for the St. Matthews store.
In an effort to boost sales, Crumbl introduced "dirty sodas" — soft drinks mixed with flavored syrups, cream, and other ingredients. CEO Jason McGowan had projected in 2025 that this initiative would increase sales by 20 percent and raise average annual store revenue from $1.1 million to $2 million. The beverages were intended to encourage visits outside of the weekly cookie releases. However, according to Inc., the initiative "failed to produce the anticipated sales increase" and fell short of expectations.
Crumbl's current struggles follow a period of rapid expansion that saw it grow from a single Utah bakery, founded in 2017, into a national franchise. Restaurant franchise experts suggest that expanding too quickly can result in operators competing for customers in markets that may not be able to support such a high number of locations. CEO McGowan has acknowledged the company's problems and accepted responsibility for its performance amid these challenges.
The chain operates through independently owned franchises, meaning performance can vary significantly from one market to another, and not every location is necessarily struggling. However, the broader company trends indicate a challenging period for the popular cookie brand.
