I Got Sued Into a $10M Business — Then Hypergrowth Almost Killed It

I Got Sued Into a $10M Business — Then Hypergrowth Almost Killed It

Zero Stores. One Lawsuit. Everything Changed.

In May 2022, Crumbl Cookies filed a lawsuit against Dirty Dough. At the time, we had exactly zero franchise stores open. We had a franchise agreement, a single corporate location in Tempe, Arizona, and a dream. That's it.

Five of their six examples in the lawsuit? They copied us — and then sued us over it. That's not my opinion. That's what happened.

Most founders in that position would hire a lawyer, go quiet, and pray. I did the opposite. And it changed everything — for better and for worse.

The Decision to Go Loud

When the lawsuit hit, I had a choice. Play defense and hope it goes away. Or play offense and make it the story.

I chose offense.

We spent $100,000 on legal fees and $60,000 on marketing — specifically around the lawsuit. Billboards. Social media campaigns. Press outreach. We leaned into the underdog narrative because that's exactly what we were.

Then the media caught on. CNBC called. Good Morning America called. Every franchise industry publication wanted the story. Suddenly Dirty Dough wasn't some unknown cookie brand in Arizona — we were the little guy standing up to the giant.

The Math That Shocked Everyone

Here's what $160,000 in combined legal and marketing spend produced:

• Millions of dollars in franchise fees collected

• 400+ franchise agreements signed

• ~100 stores opened or in development

• National brand recognition from zero

If you're doing the math, that's roughly a 20-50x return on the lawsuit marketing spend. No ad campaign I've ever run has come close to that ROI.

The lesson was clear: when you're the underdog, negative attention is free marketing. The spotlight was pointed at us whether we wanted it or not. The only question was whether we'd use it.

But Here's What Nobody Talks About

Every podcast, every article, every social media post about the Crumbl lawsuit tells the same story: small brand gets sued, turns it into marketing gold, wins. Happy ending.

That's only half the story.

The lawsuit didn't just bring marketing. It brought demand. Explosive, uncontrollable, overwhelming demand. And we were not ready for it.

Think about it: we went from zero franchise stores to 400+ franchise agreements in under two years. We were a team built for a 10-store brand trying to manage a 400-store pipeline. The operational strain was immense.

What Hypergrowth Actually Looks Like

People romanticize growth. "Oh, you grew too fast? That's a great problem to have." No. It's a real problem to have.

Here's what hypergrowth looked like from the inside:

• Support infrastructure couldn't keep up. When you promise 400 franchisees world-class support and you have a team built for 40, something breaks. Usually everything.

• Quality control became impossible. We had a centralized frozen puck production system — pre-portioned cookies shipped from one facility. That system was genius at 30 stores. At 200 stores, the logistics became a nightmare.

• Cash flow paradoxed. Franchise fees come in before stores open. So you look cash-rich while actually being cash-poor — because every dollar needs to go toward supporting the stores you've already sold.

• Hiring couldn't match pace. You can't train a regional support manager in two weeks. But that's what we needed to do, over and over.

• Franchisee expectations were sky-high. They bought in during the hype. They expected perfection. We were managing a train wreck at scale.

The Real Lesson: Growth Without Infrastructure Is Just Chaos

I say this all the time: nobody knows what they're doing. It's just who can manage the train wreck the best.

At Dirty Dough, we managed it. But barely. And the scars from that hypergrowth are real. There were months where I was working 60+ hours, the team was stretched beyond capacity, and we were essentially rebuilding the plane while flying it at Mach 2.

Eventually we sold Dirty Dough to Craveworthy Brands in September 2024. The brand continues. The stores are open. The system works. But the journey from 0 to 400 was not the smooth, triumphant narrative that makes for good podcast appearances.

What This Means for Franchise Buyers

If you're evaluating a franchise brand, the Dirty Dough story teaches you something important: look at the speed of growth, not just the direction.

Questions to ask any franchisor:

• How many locations did you add last year? How many the year before?

• How has your support team scaled relative to new store openings?

• What's your franchisee-to-support-staff ratio?

• Have you ever had to pause franchise sales to let operations catch up?

A brand that grew from 10 to 50 locations over five years with zero closures is often a better investment than a brand that went from 10 to 200 in two years. Slow, controlled growth means the system is proven. Hypergrowth means the system is being tested — in real time, with your money.

If You're a Founder Getting Sued Right Now

I'll give you the same advice I'd give myself:

1. Don't hide. The instinct to go quiet is wrong. If you're the underdog, the public wants to root for you. Let them.

2. Control the narrative. If you don't tell your story, the lawsuit tells it for you.

3. Spend money on attention, not just defense. Legal is necessary. Marketing during a lawsuit is optional. But it's the highest-ROI marketing you'll ever do.

4. Prepare for success. This is the part I wish I'd done better. If your marketing works — if the attention converts — you need infrastructure ready to catch the demand. Otherwise you're just pouring water into a bucket with holes.

The Bottom Line

Getting sued by Crumbl was the best marketing event in Dirty Dough's history. That's true and I'll never back away from it.

But the hypergrowth that followed? That was the hardest operational challenge I've ever faced. And it taught me something I now apply to every franchise brand I evaluate at Franchise KI: sustainable growth beats explosive growth, every single time.

When we vet the 4,000+ brands in our database, we don't just look at growth rate. We look at controlled growth rate. Zero closures. Adequate support infrastructure. A system that can absorb new franchisees without breaking.

Because I've lived on both sides. I've seen what happens when you grow slow and I've seen what happens when you grow too fast. And I'll take slow every time.

Want an objective analysis of any franchise brand — including how their growth rate stacks up? Book a free Second Opinion call. We'll run your FDD through our AI analysis and give you the data the sales team won't.