The Once-Viral Cupcake Bakery That Didn't Survive 2025

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2025 saw major price spikes for several popular foods, and it's not surprising that some restaurants are struggling to stay afloat. When even a major corporation like Jack in the Box is showing signs of financial struggle, it can feel as if smaller businesses have almost no chance of lasting in the current economy. The once-famous dessert company Sprinkles Cupcakes proved this recently, when founder Candace Nelson announced on Instagram that the company was closing up shop on December 31, 2025. The first Sprinkles Cupcakes store opened in Beverly Hills, California, in 2005, and its first innovative Cupcake ATM was installed in 2012. According to Restaurant Dive, Sprinkles reportedly expanded to 70 locations by 2023 between stores and ATMs. Having sold the company to private equity firm KarpReilly LLC in 2012, Nelson expressed the news was as much of a shock to her as it is to the public, stating in her post, "Even though I sold the company over a decade ago, I still have such a personal connection to it and this isn't how I thought the story would go."

KarpReilly has decided to shutter all company-owned Sprinkles locations, but what will happen to franchised locations or the famous ATMs is uncertain. In a statement made to KTLA5, a company spokesperson said, "After thoughtful consideration, we've made the very difficult decision to transition away from operating company-owned Sprinkles bakeries." This is the only confirmed statement from the company regarding the closures.

According to comments on Nelson's Instagram post, Sprinkles employees received less than 24 hours' notice that they would be unemployed in the new year. According to WUSA9, at least one Sprinkles location in Washington, D.C., is selling its equipment and giving the proceeds to its now-jobless staff of almost 30 employees. As general manager Marissa Valle told the outlet, "We have chocolate, flour, buttermilk. We just want to spread the love because otherwise they're going to close the doors on us."

KarpReilly also has a stake in other restaurant venues, including Burger Lounge, Salt and Straw, and Mimi's Cafe, though none of them wound up on the chopping block in 2025. The Sprinkles website is still live as of early January 2026, but few of the pages offer much more than an error message, further confirming the reality of the company's decision to close. Sprinkles-branded products, like the Sprinkles Premium Red Velvet Cupcake Cups, remain available through large retailers like Walmart a few days after the closure, but the long-term fate of these prepackaged products is unknown. The company has at least 25 cupcake ATMs across the country, and Nelson's website reports there were at least 40 active bakeries throughout the nation. Restaurant Dive confirmed at least one franchise location opened in 2022, and its fate is currently not public knowledge. Notably, Sprinkles isn't the only dessert business facing hard times: One of Dairy Queen's biggest rivals just went bankrupt.