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 Ended

• January 3, 2021
• December 29, 2019
• December 30, 2018

U.S and Canada:

• Revenue
  782,717
  587,522
  443,563
• Non Fresh Revenue
  128,619
  112,051
  125,684
• Fresh Revenue from Insomnia and Hubs Without Spokes
  323,079
  271,067
  156,778

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 Cookies

Assets Acquired:

• Cash, cash equivalents and restricted cash 1,233
• Marketable securities -
• Receivables 232
• Inventory 2,346
• Other current assets 506
• Property and equipment 22,364
• Other intangible assets 104,500
• Other assets 672
• Total identified assets acquired 131,853

Liabilities 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)
• Goodwill 54,851
• Non-controlling interest (34,758)
• Bargain purchase gain -
• Purchase consideration, net 139,455
• Transactiion 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. Their 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.

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?

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.

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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. Their 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.

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

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

2021 Median Franchise Sales: $264,768

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.

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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. Their 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.

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

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.

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.