Louisville Crumbl Franchise Filed for Bankruptcy

The local franchisee has moved to liquidate assets following a Chapter 7 bankruptcy filing.

Updated on Oct. 13, 2026 in Retail

Louisville Crumbl Franchise Filed for Bankruptcy

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Red Sheep St. Matthews LLC has filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Western District of Kentucky. The company, which operated three local Crumbl cookie locations, is now seeking to liquidate its assets.

Why it matters

This filing marks the collapse of a local franchise group that previously saw high-performing sales across its Louisville-area stores. Owners Richard and Emily Diamond are now managing a process that involves over $352,000 in reported liabilities.

The franchisee reported more than $352,000 in liabilities as part of their Chapter 7 petition. Despite this, two of the three owned locations had previously ranked in the top 25 percent and 15 percent of systemwide sales in 2024.

The players

Richard and Emily Diamond

These individuals were the owners of Red Sheep St. Matthews LLC, the entity that operated multiple Crumbl franchise locations.

Red Sheep St. Matthews LLC

This is the business entity that filed for Chapter 7 bankruptcy protection in the Western District of Kentucky.

The details

The owners, Richard and Emily Diamond, operated three separate Crumbl stores in the region, with their latest shop opening as recently as Valentine's Day 2026. The liquidation process follows the decision to shutter these operations entirely.

In 2024, two of the stores ranked within the top 25 and 15 percent of company sales.
The couple opened their third store location on Valentine's Day 2026.
The bankruptcy petition was filed on October 1, 2026.

Market Landscape

This bankruptcy follows the U.S. Bankruptcy Code's Chapter 7 liquidation provisions, reflecting a broader trend of individual franchise groups facing significant financial headwinds. The closure shifts the local competitive landscape as these three retail locations exit the Louisville market.

Customers who frequented these specific Louisville locations will see them permanently closed as part of the asset liquidation process. Those holding gift cards or loyalty rewards for these specific stores may need to consult the bankruptcy filing for information on potential claims.

The takeaway

Business owners in the retail sector often face volatile margins that can shift rapidly despite previous high sales rankings. Monitoring local business filings is essential for consumers who rely on specific establishments for regular services or purchases.