Dive Brief:
- Sprinkles shuttered all nationwide company-owned locations on Dec. 31, founder Candace Nelson shared on Instagram this week.
- No reason was given for the closures, but a Sprinkles Cupcakes spokesperson told KTLA that “after thoughtful consideration, we’ve made the very difficult decision to transition away from operating company-owned Sprinkles bakeries.”
- Nelson founded the bakery company in 2005, and it later sold to private equity firm KarpReilly in 2012. Sprinkles began franchising in 2022 and had roughly 70 locations as of 2023. While no bakeries were listed on its website, it does show Target and Walmart locations as selling its cupcakes.
Dive Insight:
In 2023, Sprinkles baked up plans for significant growth, expecting to sign 100 franchised units that year. It also was planning to expand company-owned bakeries at a clip of three to five units annually. Sprinkles opened its first international location in South Korea in 2024 and expected to open over 18 international units that same year, according to a press release sent to Restaurant Dive.
It’s unclear if the chain will continue with its franchising, but it doesn’t appear to have an active franchise disclosure document, according to searches on Wisconsin and California’s government franchising sites. Sprinkles did not immediately respond to a request for comment.
Sprinkles also expanded into gourmet chocolates inspired by its best-selling cupcakes in 2021, according to an email sent to Restaurant Dive. In 2024, the company brought these chocolates to Target and Walmart, and in September released a lineup of sugar-free pudding and pie mixes through a partnership with The Jel Sert Company.
Sprinkles has been facing growing competition within the category as dessert chains continue to expand. Nothing Bundt Cakes, for example, reached its 600th location in 2024 and said it was pursuing a store count of 1,000 units by 2027. But the dessert category can be a difficult one for sustained growth. Crumbl skyrocketed to 1,000 units within the past few years, adding over 200 units annually, but slowed its growth to 80 new units in 2024 after facing some profitability challenges.
