Cookie flavors change weekly at Crumbl, with more than 170 in the rotation.
A judge denied Crumbl’s motion for a preliminary injunction following claims that fellow cookie franchise Dirty Dough misappropriated trade secrets from Crumbl, which would violate Utah state and federal crimes. But both franchisors have taken the decision as a win, according to LinkedIn posts from the respective founders.
Crumbl, the cookie franchise taking the country and the internet by storm in recent years, sued Dirty Dough in June 2022 for allegedly stealing trade secrets—a move Dirty Dough CEO Bennett Maxwell said was to stifle competition. The secrets allegedly stolen and misused include 66 recipes and information about sales statistics, process improvement and recipe experiments, according to court documents.
The suit asserts that Bennett Maxwell’s brother, Bradley Maxwell, stole documents from Crumbl when he was working for the company in 2019 and shared them with the Dirty Dough team.
Jason McGowan, right, who with cousin Sawyer Hemsley launched Crumbl Cookies in 2017, growing it to 260-plus stores.
“Pursuing this legal route was an essential step in our determination to protect the brand and our franchisees,” Crumbl CEO and Founder Jason McGowan wrote on LinkedIn.
Crumbl terminated Bradley Maxwell’s employment on June 1, 2019. According to court documents, in 2019, Bennett Maxwell applied for and was ultimately denied a Crumbl franchise. By May 19, 2019, the Maxwell brothers each had a 15 percent ownership stake in Dirty Dough. Bennett Maxwell bought the rest of the company in 2021.
Dirty Dough hasn’t been shy about the lawsuit. Last year, the Arizona-based brand launched a billboard campaign mocking Crumbl’s claims, with taglines like “Cookies so good, we’re being sued!” and some parody videos depicting what the Crumbl boardroom looked like when execs decided to sue Dirty Dough.
“There’s not a human alive” that would confuse Dirty Dough’s logo with Crumbl’s, Dirty Dough founder Bennett Maxwell told Franchise Times earlier this year.
In an interview with Franchise Times earlier this year, Bennett Maxwell said, “What they’re doing is unethical in my opinion. They sued or threatened to sue at least 10 companies. And who’s standing up to them? Only us. If I see a problem in the world, I’m not one to shy away from it. I’m going to deal with it, and I’m going to resolve it so others don’t have to go through it.”
Crumbl requested a preliminary injunction and a moratorium to stop Dirty Dough from opening any new stores until it’s determined “that Dirty Dough will not use any Crumbl information to support franchisee stores.” To be granted a preliminary injunction, Crumbl must prove that any potential harm outweighs the harm that would be caused by the injunction. The judge ruled that Crumbl didn’t prove this.
Bennett Maxwell is CEO of Dirty Dough.
“To the contrary, the evidence leaves little room for doubt that the further relief sought by Crumbl would cause harm to Dirty Dough and Bennett Maxwell that far outweighs whatever lingering or threatened injury Crumbl may now face,” U.S. District Court Judge Howard Nielson wrote.
Crumbl called the decision a “significant victory” on LinkedIn, despite the judge ultimately denying the brand’s motion.
“Crumbl is pleased and strengthened by the recent court order reinforcing our effort to safeguard our intellectual property,” McGowan wrote. “We have achieved a significant legal victory and secured a stipulated order in which Dirty Dough has agreed to return Crumbl’s trade secret information.
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Although the court did not grant our additional request to halt Dirty Dough’s franchising activities at this time, we are thrilled that the decision includes a conclusion that ‘Crumbl has probably established a substantial likelihood of success on the merits’ of its claims as well as other powerful findings in Crumbl’s favor on key issues.”
The decision does acknowledge the likelihood of Dirty Dough CEO Bennett Maxwell’s brother, Bradley, acting unlawfully “and no doubt that he acted unethically—when he kept the Crumbl information after his employment was terminated and when he disclosed that information to Dirty Dough.” Bradley Maxwell signed two confidentiality agreements with Crumbl, according to court documents, that obligated him to return any documents and information related to the brand upon leaving the company.
At the evidentiary hearing, the court ordered Dirty Dough and Bradley Maxwell to return Crumbl’s information. In a LinkedIn post of his own, Bennett Maxwell said Dirty Dough “intends to prove” the information in question did not contain any trade secrets.
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Bennett Maxwell boasted about his brand’s victory on the networking site, claiming McGowan’s statement was as “misleading” as the suit itself.
“Crumbl is grasping for straws once again which is made very evident by the fact that over a year after the lawsuit filing, Crumbl has yet to prove any damages from the claims they have made against Dirty Dough,” Bennett Maxwell wrote.