Insomnia Cookies Franchise & 3 Alternatives Available in 2025

This article is based on the video featured above, originally recorded for Vetted Biz Youtube Channel.

Insomnia Cookies Franchise is a U.S. bakery chain that specializes in delivering warm cookies, ice cream, and other baked goods. It was started by Seth Berkowitz in 2003 at the University of Pennsylvania when he began baking and delivering cookies late at night to students. Their first store was established in Syracuse, NY in 2004. Insomnia Cookies stores usually open from 10 AM to 3 AM on weekdays and from noon to 3 AM on the weekends. Krispy Kreme acquired them in 2018, but they still operate independently. As of April 4, 2021, Insomnia Cookies had 191 locations in 40 states nationwide. They have a very strong online presence with 50% of their sales coming from digital sources. Although Insomnia Cookies no longer offers new franchise opportunities, the brand remains a sweet business concept with a cookie franchise idea that has inspired many. The insomnia cookies franchise cost was once a consideration for potential franchisees, but the company now focuses on expanding further franchise units under its own management.

How Is Insomnia Cookies Franchise Positioned in the Cookies Industry?

The industry brings $24.5 billion in yearly revenue and $1.1 billion in profit. While this industry has historically experienced stable demand due to stable diets over the years, changing nutrition trends that encourage cutting out carbohydrates and sugars from diets are leading to slower growth. Between 2016 and 2021, the industry shrunk by 2%. However, the industry is expected to return to growth over the five years to 2021, with revenue anticipated to increase at an annualized rate of 0.6% to $25.3 billion.

Fiscal Years EndedJanuary 3, 2021December 29, 2019December 30, 2018U.S and Canada:Revenue782,717587,522443,563Non Fresh Revenue128,619112,051125,684Fresh Revenue from Insomnia and Hubs Without Spokes323,079271,067156,778

As reported by Krispy Kreme, Insomnia Cookies and Krispy Kreme stores that do not operate on a hub and spoke model brought in $323 million in 2021, up more than 100% from $156 million in 2018.

What Is Insomnia Cookies Franchise Valued At?

As of 2018 acquisition, Insomnia Cookies was valued at $137.5 million. More details about this valuation are in the table below:

Insomnia CookiesAssets Acquired:Cash, cash equivalents and restricted cash1,233Marketable securities-Receivables232Inventory2,346Other current assets506Property and equipment22,364Other intangible assets104,500Other assets672Total identified assets acquired131,853Liabilities Assumed:Accounts payable(5,866)Accrued liabilities(3,933)Deferred income taxes, net-Long- term debt, less current portion(2,692)Other long-term obligations and deferred credits-Total liabilities assumed(12,491)Goodwill54,851Non-controlling interest(34,758)Bargain purchase gain-Purchase consideration, net139,455Transactiion cost in 2018 (approx.)3,952

What Are the Costs Associated with Running an Insomnia Cookies Franchise?

Insomnia Cookies no longer offers franchises but we will review the costs and profits associated with operating a cookie franchise. Let’s look at three alternatives to Insomnia, starting with Crumbl Cookies.

3 Franchise Alternatives to Insomnia Cookies

Crumbl Cookies

Crumbl Cookies is a cookie and baked goods chain that features a weekly rotating menu with open concept kitchens. It was founded by Sawyer Hemsley and has 326 franchised locations as of 2022.

The estimated total investment necessary to begin the operation of a Crumbl Cookies Franchise ranges from $347,666 - $691,783. The following costs are part of the upfront costs included in the initial investment for a Crumbl Cookies Franchise. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a franchise in 2022.

Type of ExpenditureAmountMethod of PaymentInitial franchise fee$25,000 (if the franchise agreement is signed on or prior to June 30, 2022) $50,000 (if the franchise agreement is signed after June 30, 2022)Lump SumInitial tech and other equipment package23,300 - 167,650Lump SumInitial training fees, and travel, lodging, food, and other expenses while training20,000 - 30,000As IncurredReal estate and improvements75,000 - 250,000As incurredRent - 3 months16,666 - 83,333As IncurredProfessional fees8,000 - 15,000As IncurredEquipment, furniture, fixtures, decor, and supplies75,000 - 100,000As Incurred or LeasedPOS system, computer hardware, and software3,500 - 8,000As IncurredSigns6,500 - 15,000As IncurredMisc. opening costs2,500 - 5,000As IncurredOpening inventory5,000 - 10,000Lump SumAdditional funds - 3 months10,000As IncurredTotal322,666 - 666,783 (if the franchise agreement is signed on or prior to June 30, 2022)$347,666 - 691,783 (if the franchise agreement is signed after to Jun 30, 2022Does not include royalties or marketing fees.

This is not an exhaustive list of fees and there might be other fees associated with starting a franchise. We recommend you talk to the franchisor to get a better idea of the required financials.

There are also fees associated with running a franchise. Once again, these numbers have been taken from Crumbl:

Royalty: 8% of Gross sales

Marketing Fee: 2% of Gross sales

Technology Fee: $500

What Much Does a Crumbl Cookies Franchise Owner Make?

2021 Calendar YearAverageHighMedianLowTotal Revenue1,687,7313,369,1391,582,090734,278Gross Profit749,5551,771,793707,912,53282,380Net Profit357,512618,102279,21233,260

For the 2021 calendar year, the median Crumbl Cookies franchise made $1,582,090 in revenue with $279,212 in profit. That is a profit margin of around 17.5%.

Based on the median sales provided by Crumbl’s franchise locations, at an average of a 17.5% profit margin it will take around 4.5 years to recoup your midpoint investment of $519,724. This is longer than other franchise opportunities. You may not get a 17.5% profit margin which would elongate getting a return on your investment.

Many factors affect the sales, costs and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other baked goods stores; the extent of market penetration and brand awareness that Cumbl Cookies stores have attained in your market. Also, the quality of management and service at your Franchised Store.

Is the Crumbl Cookies Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Crumbl franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $1 Million Net Sales

• Estimated Selling Price = Net Sales - 0.61

$1 Million – $5 Million Net Sales

• Estimated Selling Price = Net Sales - 0.54

When you go to sell a Crumbl Cookies franchise based on the median multiple of .61 and net sales in 2020 of $1,582,090, it would sell for $965,074. This is significantly higher than the midpoint investment of $519,724.

The more franchised locations you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

How Many Crumbl Cookies Units Have Opened and Closed

Outlet TypeYearOutlets at the Start of the YearOutlets at the End of the YearNet ChangeFranchised20191554+39202054141+872021141326+185Company-Owned201911+0202011+0202111+0Total Outlets20191655+39202055143+872021142327+185

As of 2021, there are 327 Crumbl Cookies outlets with 185 of them opening in 2021 itself. This might indicate strong growth in the industry and a demand for more outlets, boosting confidence that franchises in this industry are largely successful.

Mrs. Fields

Mrs. Fields is a cookie and related products chain that offers two types of franchised locations: a store and a kiosk. It is currently led by Darren Hale who is the CEO of the parent company, Famous Brands. As of 2021, they had 128 franchised locations.

The estimated total investment necessary to begin the operation of a Mrs. Fields Franchised store ranges from $255,995 to $415,500. The following costs are part of the upfront costs included in the initial investment for a Mrs. Fields Franchise. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a franchise in 2022.

Type of ExpenditureAmountMethod of PaymentInitial franchise fee35,000Lump SumTravel and living expenses while training2,000 - 3,000Lump Sum, as IncurredReal Estate LeaseNote 3Note 3Improvements and equipment179,495 - 312,500As Agreed, with SuppliersOpening Product and soft goods5,000 - 10,000As Agreed, with SuppliersGrand opening promotion, if opening a new store5,000 - 10,000Lump SumDeposits and other prepaid expenses4,000 - 5,000Lump SumProfesional fees9,000 - 10,000Lump Sum or as Arranged by ProvidersInsurance2,500 - 3,500Lump Sum, or as Arranged by ProvidersCoffee preparation and serving equptment2,500 - 10,000MonthlyComputer hardware and software3,500 - 4,500Lump SumAdditional funds (3 months)8,000 - 12,000Lump Sum, as IncurredTotals255,995 - 415,500

This is not an exhaustive list of fees and there might be other fees associated with starting a franchise. We recommend you talk to the franchisor to get a better idea of the required financials.

There are also fees associated with running a franchise. For Mrs. Fields, we see the following costs:

Royalty: 6% of Gross revenue

Marketing Fee: 3% of Gross sales

How Much Does a Mrs. Fields Franchise Owner Make

GroupNumber of Stores in GroupAverage Gross RevenueMedian Gross RevenueRangeHighest Quartile16525,949496,781388,354 - 1,012,046Second Highest Quartile16320,886321,946265,923 - 378,536Third Highest Quartile16220,946219,676190,489 - 263,616Lowest Quartile16102,147101,31330,702 - 179,223Total Group64292,368264,76830,702 - 1,012,046

For the 2021 calendar year, the median Mrs. Fields franchise made $264,768 in revenue.

2021 Median Franchise Sales: $264,768

Initial Investent (Midpoint)%Profit Margin of Average Franchise SalesEstimated ProfitsTime to Recoup Investment335,74710%26,47615 years335,74715%39,71511 years335,74720%52,9539 years

Based on the median sales provided by franchise locations, at an average of a 15% profit margin it will take around 11 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment. This is significantly more than other franchise opportunities.

Based on the median sales provided by franchise locations, at an average of a 15% profit margin it will take around 11 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment. This is significantly more than other franchise opportunities.

Is the Mrs. Fields Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Mrs. Fields franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $1 Million Net Sales

• Estimated Selling Price = Net Sales - 0.61

When you go to sell a Mrs. Fields franchise based on the median multiple of .61 and net sales in 2020 of $264,768, it would sell for $161,508. This is significantly lower than the midpoint investment of $335,747.

The more franchised locations you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

Mrs. Fields Statement of Income

Years EndedJanuary 3, 2021December 29, 2019December 30, 2018Revenues, netMrs. Fields gifts$34,870$30,592$25,447Domestic franchising4,6974,8367,463Ad Fund - franchising1,125--Mrs. Fields licensing9181,3671,728International franchising6067951,002Total revenues42,21637,59035,640Operating costs and expensesMrs. Fields gifts29,38525,34922,659Domestic franchising1,3611,1491,428Ad Fund - franchising894--Mrs. Fields licensing153474349International franchising148180198General and administrative4,9354,,6705,551Depreciation and amortization9789351,530Total operating costs and expenses37,85432,75731,715Income from operations4,3624,8333,925Interest expense, net6,3189,1849,382Other income(37)-(349)Gain on debt extinguishment(1,475)--Loss before provision for income taxes(444)(4,351)(5,108)Provision for income taxes530393(1,644)Net loss from continuing operations, net of income tax(974)(4,744)(3,464)Net loss from discontinued operations, net of income tax-(322)(209)Comprehensive loss, net of income taxesNet loss(974)(5,066)(3,673)Foreign currency translation adjustment396685Comprehensive loss(935)(5,000)(3,588)

In 2021, Mrs. Fields ran a loss of $974,000. This is down from a loss of $3.6 million in 2019, but the company is not doing well and prospective franchisees should wait to see if profits are seen again.

How Many Mrs. Fields Units Have Opened and Closed?

Outlet TypeYearOutlets at the Start of the YearOutlets at the End of the YearNet ChangeFranchised2019172151-212020151138-132021138128-10Company-Owned201900020200002021000Total Outlets2019172151-212020151138-132021138128-10

As of 2021, there are 128 Mrs. Fields outlets. They have been declining at a rate of around 15 locations per year. In an industry that is growing this is not a good sign. This might be due to frustrations owners have with the franchisor or declining sales in the product offerings, leading to owners not renewing their franchises.

Great American Cookies

Great American Cookies is a cookie and brownies chain that claims to be the home of the Cookie Cake. As of 2021, they had 128 franchised locations. It was owned by Mrs. Fields in 1998 but is owned by FAT brands now. As of 2020, they had 370 franchised and no company-owned locations.

The estimated total investment necessary to begin the operation of a Great American Cookies Franchised store ranges from $277,400 to $403,150. The following costs are part of the upfront costs included in the initial investment for a Great American Cookies Franchise. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a franchise in 2022.

Additional requirements for owning a Great American franchise is that you’re financially stable, with a net worth of at least $250K and liquidity of $100K per store.

Type of ExpenditureAmountMethod of PaymentFranchise fee$25,000 - $25,000Lump SumGrand opening marketing3,000 - 5,000As IncurredTravel and living expenses while training1,000 - 3,000As IncurredCookie ingredients5,000 - 10,000As IncurredOther opening inventory5,700 - 15,150Lump SumArchitectural fees7,000 - 12,500As IncurredFurniture, fixtures, equipment and decor91,000 - 121,000As IncurredSigns4,500 - 9,500As IncurredPrepaid rent and security deposit2,500 - 5,000As IncurredLeasehold improvements115,000 - 165,000As IncurredUtility deposits2,200 , 3,000As IncurredProfessional Fees1,000 - 6,000As IncurredComputer System2,500 - 5,000As IncurredBusiness licenses, permits, etc. (for first 6 months)1,500 - 2,500As IncurredInsurance (3 months)2,500 - 3,500As IncurredAdditional funds (3 months)8,000 - 12,000As IncurredTotals277,400 - 403,150For a traditional store

This is not an exhaustive list of fees and there might be other fees associated with starting a franchise. We recommend you talk to the franchisor to get a better idea of the required financials.

There are also fees associated with running a franchise. For Great American Cookies, we see the following costs:

Royalty: 6% of net sales for the preceding month

Marketing Fee: 1.5% of sales for Traditional Mall stores, otherwise 2%

Local Marketing: 2% of Net Sales

How Much Does a Great American Cookies Franchise Owner Make?

Great American does not report yearly sales but does so monthly. Assuming the median of around $31,000, we can proceed with calculations below.

2021 Median Franchise Sales: $31,000 - 12 = $372,000

Initial Investent (Midpoint)%Profit Margin of Average Franchise SalesEstimated ProfitsTime to Recoup Investment$680,55010%$37,200 21 years15%$55,83014.5 years20%$74,400 11.5 years

Based on the median sales provided by franchise locations, at an average of a 15% profit margin it will take around 14.5 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment. This is significantly longer than other franchise opportunities in the industry.

Many factors affect the sales, costs and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other baked goods stores; the extent of market penetration and brand awareness that Great American Cookies stores have attained in your market. Also, the quality of management and service at your Franchised Store.

Is the Great American Cookies Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Great American Cookies franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $1 Million Net Sales

• Estimated Selling Price = Net Sales - 0.61

When you go to sell a Great American Cookies franchise based on the median multiple of .61 and net sales in 2020 of $372,000, it would sell for $226,920. This is significantly lower than the midpoint investment of $680,550.

The more franchised locations you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

Great American Cookies Statement of Income

Statement of Income

Year to date period ended - February 28, 2021RevenuesRoyalty revenue1,068Franchise fee revenue52Total Revenues1,120ExpensesMagnagement fees - affiliate448Selling, general and administrative expenses-Bad debt expense4Total Expenses452Net Income668

In 2021, Great American Cookies made a profit of around $668,000. No information has been made available by Great American Cookies about past figures.

How Many Great American Cookies Units Have Opened and Closed

Outlet TypeYearOutlets at the Start of the YearOutlets at the End of the YearNet ChangeFranchised2019355363+82020363369+62021369370+1Company-Owned201900020200002021000Total Outlets2019355363+82020363369+62021369370+1

As of 2020, there are 370 Great American Cookies outlets. New stores have been opening at a slowing rate with the average between 2018 and 2020 being 5 per year. However, only one new franchise opened in 2020.

Conclusion

We hope that this article gave you an idea of how profitable it is to run a franchise in the baked goods industry, taking Crumbl Cookies as the base model. While Insomnia Cookies no longer offers franchises, opting to keep everything under its own control, you might be interested in franchising a location for Krispy Kreme, the parent company of Insomnia. The cookies industry is expected to grow in the future and Crumbl Cookies, Great American, Mrs. fields, and Krispy Kreme all offer a chance to be a part of it.

Think you are interested in owning a cookies franchise or another franchise in the Food and Beverage industry? Check out our listings page on the Vetted Biz website for much more information about franchise opportunities.