Crumbl Cookies Franchisee Files for Bankruptcy
A Crumbl Cookies franchisee, Red Sheep St. Matthews LLC, has filed for Chapter 7 bankruptcy protection, citing liabilities exceeding $352,000. The operator previously ran three locations.
Red Sheep St. Matthews LLC, a franchisee operating Crumbl Cookies locations, has filed for Chapter 7 bankruptcy in Kentucky on October 1. The company, owned by Richard and Emily Diamond, faces liabilities totaling over $352,000, indicating a liquidation of its assets.
Previously, the franchisee operated three Crumbl stores, with two locations ranking within the top 25 and 15 percent for systemwide sales in 2024. Richard Diamond had previously stated that their locations performed best near weekly shopping venues, finding Louisville to be a strong market.
The franchisee cited a "Disney World effect" and the company's social media engagement as drivers of customer interest in earlier statements. The third location was opened on Valentine's Day, which reportedly was their highest sales day across all stores.
This bankruptcy filing comes as Crumbl Cookies navigates challenges within its franchise system. The company, once noted as one of the fastest-growing restaurant franchises in the U.S., has reportedly experienced decreased customer traffic and store closures.