Dirty Dough’s ‘Post-War’ Era Begins With New CEO, More Mobile Franchises
More than one year since their onset, the “Utah Cookie Wars” have finally cooled.
The conflict – a series of disputes alleging theft of proprietary information and trademark infringement among specialty cookie companies doing business in the Beehive State – ended late last year when Crumbl and Dirty Dough baked up a settlement.
Having survived the battles, Dirty Dough is now focusing its efforts in 2024 on growing its mobile franchising business and bringing in investments with a newly-appointed CEO at the helm.
Baking Up Lawsuits
The #UtahCookieWars, as they’ve been dubbed on social media, began in 2022 when Crumbl founder and CEO Jason McGowan announced in a LinkedIn post that his company had filed suits against Crave Cookies and Dirty Dough. In the post, he alleged both defendants had “unique ties” to Crumbl and formed businesses copying its processes, trademarks and trade dress.
In its May 2022 suit against Dirty Dough, Crumbl claimed Dirty Dough stole its trade dress to “unjustly enrich itself” in violation of the Lanham Act as well as Utah’s Deceptive Trade Practices and Unfair Competition Act. The lawsuit, amended in August 2022, also alleged Bradley Maxwell – the brother of Dirty Dough founder Bennett Maxwell – stole 66 proprietary Crumbl recipes and downloaded them onto his personal cloud drive.
Speaking with NOSH following the confidential settlement, Bennett Maxwell said Dirty Dough was just starting out at the time of the suit while its competitor already had a solid footing in the market. As a result, the lawsuit brought thousands, if not millions, of eyes to the emerging cookie company, he claims.
“Everybody thought, ‘Oh, it’s two cookie giants fighting, Dirty Dough versus Crumbl.’ [But at the time] Dirty Dough had just one store and Crumbl was a billion-dollar company,” said Maxwell. “They really did turn us into their biggest competitor. They put us on their level.”
As part of the settlement, Dirty Dough agreed to return the recipes and other stolen information to Crumbl and change the shape of its 4-count cookie boxes to “eliminate consumer confusion.”
In a joint statement shared with Law360, the companies said they are “pleased that they have been able to work together to resolve this dispute and each remains dedicated to serving its customers with excellence.”
The news comes after Crumbl and Crave Cookies settled a similar suit in July.
Creating a Recipe for Success
Just 18 months after the beginning of the battle with Crumbl, Dirty Dough has grown from 60 franchises sold and zero open to 55 brick-and-mortar stores and 10 mobile franchise operations open. The company has also sold 450 franchises, most of which were a direct result of attention from the lawsuit.
“We definitely sold hundreds of franchises directly due to the exposure from the lawsuit, but we also had a few people not buy franchises directly due to it,” said Maxwell.
Though the Arizona-based company spent roughly $300,000 to $350,000 in legal fees related to the suit, it collected between $4 million and $5 million in franchise fees.
In August 2023, a federal judge denied Crumbl’s request to prevent Dirty Dough from opening new storefronts in Utah and to force its executives to admit to stealing proprietary recipes and blueprints. In the court order, U.S. District Judge Howard C. Nielsen said barring Dirty Dough from expanding in the market while the suit was being resolved would be “profoundly anti-competitive.”
According to their respective websites, Dirty Dough has 18 locations in the Beehive State while Crumbl has 28.
What’s Next?
Now that the battle is over, Dirty Dough can spend the next year applying for financing and getting investment, which Maxwell called “a big relief.” The company will also build out its fleet of mobile franchises, with new CEO Gregg Majewski taking an operating role.
Majewski is the founder and CEO of Craveworthy Brands – the parent company of several casual and fast-casual dining brands – and previously served as CEO of Jimmy Johns. He brings with him a team of 27 individuals, doubling the size of Dirty Dough’s staff.
Dirty Dough currently has 46 new franchises under construction.
Crumbl did not respond to NOSH’s multiple requests for comment on the lawsuit or settlement.
