The goody bandit is Boingo the pink bunny. He has been stealing the recipes so he can make his own addictive goody company and become successful, so he must destroy the competition. He gets the final recipe by stealing the book from the basket wearing Red's forgotten hood.
Red goes after him, but is captured by Boingo and put in a cable car full of dynamite so he can blow up the forest. Granny, Wolf, and the Woodsman all team up and beat up the European ski team Granny faced earlier. Meanwhile, the overly-caffeinated Twitchy is trying to explain to the cops that they are going the wrong way, but no-one can understand him.
Granny catches up with the cable car by sliding on the cable car's cable and saves Red from falling while she is trying to escape, and they make the cable car fall, where it blows up in the water. The European ski team (with Boingo) try to catch up on their snowboards by sliding down the cable car's cable. The police (mostly with Flipper's help) finally realise what Twitchy was saying, but it was too late. Luckily, the European ski team can't jump off the cable, so they slide right into the back of the police van, and sent to jail.
Red and Granny used parachutes (Red used her hood again) to jump off the cable. The Woodsman got his dream job, and ends up singing with the Happy Yodelers. Flipper reapproaches Granny, Red, and the Wolf at a diner, and asks them to join his undercover business, appropriately named "Happily Ever After." They all accept the offer.