Inspired by a critic's impressing some comments on a television review, Mr. Krabs decides to make the Krusty Krab SpongeBob-themed and names it The Krusty Sponge. Changes included a sign with a sponge that said "The Krusty Sponge." Outside the restaurant was a "Krusty Sponge Fun Train" with SpongeBob pedaling it constantly without a break. Inside, Squidward was dressed in a SpongeBob suit and was put on grill duty despite the fact that the suit did not allow his arms to move; which caused him to accidentally slap a little boy.
Due to the poisoned patties called Spongy Patties (expired Krabby Patties), many customers started a trial against Mr. Krabs. The patties turned everyone yellow with dark yellow holes, like SpongeBob. The trial was near an end when Mr. Krabs made the judge change his mind by allowing the judge to have unlimited rides on the Fun Train, with Squidward driving it.
SpongeBob drinking straws (green straws with SpongeBob in the middle).
SpongeBob bibs (some said "I soiled myself at the Krusty Sponge").
Squidward Tentacles: He dresses up as the restaurant's mascot, SpongeBob. He gives out autographs and cooks the food, while having difficulties. He also operates the Fun Train for Horace A. Whopper at the end of the episode.
SpongeBob SquarePants: He drives the Fun Train for the customers, which ended up being exhausting for him. He was also mistaken as a guy in a SpongeBob costume by one customer when she said "That's the worst SpongeBob costume I've ever seen." when he got too exhausted to work.
Mr. Krabs was arrested by an agent for selling the Spongy Patties that poisoned anyone who consumes it. The case was the entire community of Bikini Bottom against Krabs, who knew he could not win the lawsuit. Before the judge made his final decision, Krabs made him change his mind when he realizes the judge is a fan of SpongeBob. The restaurant came back to normal, and Squidward drove a ride for the judge.
This is first time Mr. Krabs changes the name of the Krusty Krab without dropping the "Krusty" part. The second time was in the episode "Krusty Dogs" where he renamed it "The Krusty Dogs."