- White-hot bakery franchise Crumbl Cookies opens as many as 50 stores monthly.
- QuickBooks and paper processes left leadership without the performance metrics they craved.
- They chose NetSuite ERP over Sage Intacct, concluding it would more easily adapt to growth.
- Planning and budgeting are now a team effort, vs. the work of one person and a spreadsheet.
- NetSuite WMS has reduced inventory days on hand and increased profitability.
- Amid rapid growth, “NetSuite improved my team’s quality of life,” said Crumbl’s VP of finance.
About Crumbl Cookies
For months, cousins Jason McGowan and Sawyer Hemsley tried countless chocolate chip cookie recipes. They gave these baked goods to friends and neighbors for side-by-side comparisons and asked them pointed questions about what they liked or didn't like about each one.
Once they found a formula that was just right, McGowan and Sawyer opened the first Crumbl Cookies bakery in Logan, Utah, a college town home to Utah State University. They figured college kids are often up late and generally not the most health-conscious bunch, so sweet treats with late-night delivery could be a hit. And they were, so much so that the duo soon opened a second Crumbl(opens in new tab) location in Orem near Utah Valley University.
The early success was sufficient proof to start franchising, and Crumbl took off from there. It developed a loyal following with weekly releases of four or five flavors that are only available that week, in addition to one mainstay: that well-researched chocolate chip cookie. This model, along with a bit of marketing genius from Hemsley, had stellar results.
“At first, I was looking at the financials for the stores and seeing incredible margins and double-checking with them,” said Crumbl VP of Finance Michael Card, who advised the company in its early days before joining full-time in 2020. “Like, ‘Is this accurate? Am I missing something? Is there a bank account that I wasn't told about that has all the expenses?’”
The bakery has become an Instagram sensation, with more than three million followers and videos every Sunday revealing the flavors of the week. And it continues to grow at light speed, averaging 40 to 50 store openings every month.
Get an overview of Crumbl's story on the NetSuite Podcast:
Scaling to Satisfy Customers’ Cravings
As the business grew at an increasingly fast pace, its leaders figured things out as they went. Innovative employees devised fast fixes for problems — which sometimes required eschewing best practices — and ultimately developed a model to help franchisees open new locations successfully.
“Finance is founded in strong controls and processes,” Card said. “But strong controls and processes come to odds very quickly with robust growth. You find yourself making judgment calls like, ‘Is this control going to make enough of a difference to justify how much it's going to slow down our potential growth?’”
But that approach became less sustainable as Crumbl opened new stores every week. It used multiple instances of QuickBooks Online to manage financials for several subsidiaries. Though an expense management solution helped with accounts payable (AP), the finance team still paid bills with paper checks. Budgets and forecasts were in complex spreadsheets that only one or two people could interpret and adjust.
Inventory management was even more manual, with certain processes managed on paper. Although core cookie ingredients are delivered directly from a food service provider to Crumbl stores, the corporate office stores and delivers specialty items needed for rotating cookie flavors.
There was no simple way to see metrics indicative of business performance, especially when it came to inventory. This lack of data that could inform decisions was at odds with a forward-thinking leadership group and stores where customers order and pay through wall-mounted touchscreens.
Finding a ‘Forever’ System
In Crumbl’s search for a system to help run the business better, Card and team gave more weight to flexibility and ability to integrate with other software than specific functionality. The thinking was that a system that could adapt to evolving needs through configuration and connections to other tools the company used would never need to be replaced.
In addition to NetSuite, Crumbl considered Sage Intacct. However, the team found that many capabilities it needed or would need in the future were on the product roadmap rather than part of the current offering. Sage also lacked a deep network of integration partners.
After selecting and implementing NetSuite ERP, an entire realm of possibilities opened up for Crumbl. The team had access to accurate and real-time data, allowing it to examine revenues, expenses, and process efficiencies and brainstorm improvements.
Availability of data also made financial planning and budgeting much more collaborative. Crumbl can now leverage the strengths of each team member to improve the overall quality of these projections.
The ERP system was even more of a game-changer for inventory management. Crumbl can closely track every item in its warehouse or on order, including quantities, location, product characteristics, and other details. It monitors purchasing and fulfillment expenses, some of the largest for products businesses, and makes adjustments on the fly based on the shifting needs of its franchise partners.
The bakery has also seen a significant bottom-line impact with NetSuite Warehouse Management System (WMS)(opens in new tab). Improved warehouse processes have reduced inventory days on hand and increased profitability.
“Inventory management and fulfillment is the area where if companies fail, it will cost them their business due to the costs and inefficiencies,” Card said. “But if they succeed, they're able to generate so much more free cash flow and their profit margins can soar.”
The ability to closely monitor inventory has tightened inventory control and helps leaders ask the right questions to address potential problems.
Crumbl Goes North of the Border
Crumbl is determined to become more of a household name as it constantly enters new markets and neighborhoods. Early next year, it plans to open a corporate-owned store in Canada, its first outside the United States.
As the franchise moves into other countries, it’s implementing NetSuite OneWorld, a solution for multi-currency and multi-subsidiary management. OneWorld will automate currency conversions, simplify intercompany transactions, and produce consolidated financial reports for its five entitles.
Crumbl is also making better use of NetSuite Fixed Assets Management as its 350-person staff continues to grow. Its fixed assets are primarily laptops and other devices for employees, but also include commercial baking equipment in its test and quality kitchens. The solution will automatically calculate depreciation for these assets and track them from acquisition through disposal.
Card has leaned on NetSuite’s Learning Cloud Support (LCS) Company Pass(opens in new tab) to bring new employees up to speed as his team expanded from two to 12 people over the past year. He sees LCS as a “reference manual” for the system, and it’s the first place Crumbl’s staff turns when they’re trying to figure out a new workflow or exploring a new piece of the system. As the company continues to add modules like NetSuite OneWorld, that learning tool will only become more valuable.
Still just five years old, the business is constantly looking for ways to refine the experience for customers and franchisees. And it’s always trying out delicious new cookie recipes in its test kitchen.
“We want to be the cookie company,” Card said. “We want people to associate spending time together with their friends and family with having a pink box present.”
Much as NetSuite has played a role in helping Crumbl get to where it is today, it will make the challenges that are bound to come more manageable.
Discover how moving to a true inventory management system like NetSuite(opens in new tab) can boost your bottom line.