Dallas Employment Trial Lawyer Harjeen Zibari
Sprinkles Cupcakes, the once-ubiquitous gourmet bakery chain famous for its colorful storefronts and viral cupcake ATMs abruptly closed all of its retail locations and vending machines nationwide as of December 31, 2025, ending a 20-year run that began in Beverly Hills in 2005. The company’s founder, Candace Nelson, confirmed the shutdown in a TikTok post, describing the moment as “surreal” and not how she envisioned the brand’s legacy after selling it to private equity in 2012. With more than 20 storefronts across several states and numerous airport and mall ATMs, the sudden disappearance of Sprinkles shocked both longtime customers and employees alike.
I was a loyal Sprinkles customer myself. I went to college in Richardson, Texas, which is not known for its nightlife. But all-nighters were way more exciting when my friends and I would barrel up 75 to grab a cupcake at 4 AM from the Sprinkles ATM, which sang a ridiculous song at an even more ridiculous volume that had us sleep-deprived college kids in tears at its absurdity. I had a birthday just weeks after the onset of the covid-19 pandemic that sent us all into our homes and locked away from each other, and a vending machine cupcake seemed like the safest option to blow a candle out onto. When I graduated law school a few weeks later, again, I commemorated the occasion with a pastel-pink strawberry cupcake that my cat Rosie ate a quarter of when my back was turned. Those were huge cupcakes too. She’s a fluffy cat.
But my sweet memories pale in comparison to the plight of the employees who saw their jobs ripped from under them without warning immediately after working an unforgivingly busy holiday season. The closure was especially abrupt for staff, with many workers reporting they were given as little as one day’s notice and no severance pay, leading to public frustration and outcry on social media. After all, how could a brand that charged $82 for a dozen cupcakes and constantly sold out of product go out of business? Maybe I just answered my own question.
So you might be wondering, Harjeen, isn’t this illegal? The appropriate law to look at when investigating this matter is the WARN Act, which I posted a blog about last year. Put very briefly, the WARN Act doesn’t apply to every employer. It only covers businesses that have 100 or more full-time employees, or have 100 or more employees (including part-timers) who work a combined 4,000 hours or more per week (excluding overtime). The WARN Act requires an employer must give 60 days’ advance written notice in two scenarios:
1. Plant Closing: This is when a company shuts down a site of employment (like a factory, office, or warehouse), and that shutdown results in 50 or more job losses during a 30-day period.
2. Mass Layoff: This happens when there’s no plant closing, but a large number of employees are laid off at once. This means either:
- 500 or more employees are laid off, or
- 50–499 employees are laid off and they make up at least 33% of the workforce at that location. Keep in mind, the job losses must be expected to last at least six months or be permanent.
It’s unclear how many employees Sprinkles had. If the locations had fewer than 50 employees, or if fewer than 500 total employees were terminated, it may not have been legally required to give notice that the operations were closing. However, an employee on social media posted a copy of her termination letter from Sprinkles, and it mentioned that the company was attempting to secure funding that would have prevented the closure if the funding went through. This set off my lawyer alarm. This was speaking to a specific carveout in the WARN Act, that says that employers who are actively trying to secure funding or business to stay afloat, and giving advance notice would ruin chances of survival, the company does not have to give notice. Sprinkles was probably trying to get ahead of that argument in the termination letters.
It’s the end of an era, but the beginning of a lot of questions.
The private equity group that owned and operated Sprinkles, Karp Reilly LLC, has not officially commented on the closure of the beloved brand.
Do you think you’ve been subject to a WARN Act violation? Or, have you been laid off and think you have a legal case involving discrimination or harassment? Contact me in Dallas or one of my talented colleagues in Houston or Austin today.