In this universe, Plankton became successful and Mr. Krabs did not. Plankton and Mr. Krabs switched positions in life.
Its role in the series
In "The Algae's Always Greener," Karen suggests that he should switch lives with Mr. Krabs using a new invention he made. Plankton does and enters an alternate universe in which he is successful. However, he retains his memory from the normal world. In the Mr. Plankton Universe, he learns that he runs the Krusty Krab and everything is exactly the same except that he is the owner instead of Mr. Krabs and that Plankton is referred to as "Mr. Plankton." SpongeBob SquarePants and Squidward Tentacles works for him and Pearl (Pearl Plankton) is his daughter. In addition, as Plankton later learns, Mr. Krabs goes by the name of "Krabs" and is in Plankton's role in Mr. Plankton's universe. He is naked as Plankton has Krabs' clothes.
This section contains speculative information. This information has not been confirmed. Please keep this in mind.
An explanation of how this universe came to be can be explained by the events of "Friend or Foe."
In "Friend or Foe," it is revealed that Plankton and Mr. Krabs were friends from their birth to shortly after they started running a restaurant together. In the scene that broke their friendship up, Plankton and Mr. Krabs fight over the formula to their first patty. They both go flying and Plankton storms out the door and receives only one piece of the formula "chum". Mr. Krabs flies backwards and knocks down some ingredients and the Krabby Patty is born.
If Mr. Krabs and Plankton's positions are switched, then Mr. Krabs storms out the door with the recipe for "chum" and Plankton gets the part with the ingredients for a Krabby Patty, this is when the universe begins. Plankton would abandon his girlfriend Karen to be more successful. He would have Pearl with the female that Mr. Krabs marries in the main universe. Krabs would pick up Karen and be less successful than Mr. Plankton. Mr. Plankton would hire Squidward, Jim, Not SpongeBob, and SpongeBob.
The only thing that is not explained however is why its still called, "The Krusty Krab" or why they are called, "Krabby Patties".