Latest / Franchise Conversations with Fexingo: Buying, Running, and Scaling Franchise Businesses / Franchisees Who Win at Adapting to Changing Demographics
Transcript
- Lucas: So Luna, we talk a lot about optimizing what's inside the four walls of a franchise — labor, inventory, pricing. But what happens when the neighborhood itself changes under your feet? Luna: That's a big one. I remember seeing a Dunkin' in Queens that was thriving ten years ago and now it's surrounded by new condos and a very different customer base. Lucas: Exactly. That's the case I want to dig into today. This franchisee, let's call him Mike, had been running the same playbook for over a decade. Six in the morning to two in the afternoon, classic donut and coffee menu, mostly commuters and older locals. Lucas: Then the area started gentrifying. New apartment buildings went up, a Whole Foods moved in, and the morning rush started looking different — younger professionals, more remote workers, families with strollers. Luna: So what did Mike do? Did he panic or did he pivot? Lucas: He didn't panic, but he also didn't just guess. The first thing he did was pull the local census data and the city's open data on new building permits. He wanted to see the actual numbers on who was moving in and how fast. Luna: That's smart. Data before instinct. Lucas: Right. The data showed that the median age in a half-mile radius had dropped by eight years, and the share of college-educated residents had jumped from about a third to nearly sixty percent in four years. That's a massive shift. Luna: So he knew his customer was changing, but what did he actually change about the store? Lucas: First, he extended his hours — started closing at nine instead of two, because the new crowd was coming in later, especially on weekends. He also added oat milk and a couple of cold brew options, which sounds small, but it's a signal. Luna: It's about showing you're part of the new neighborhood, not just a relic of the old one. Lucas: Exactly. And he went one step further. He hired two part-time staffers who were bilingual in Spanish and English, because the data also showed a growing Hispanic community in the surrounding blocks. He wanted to make sure everyone felt welcome. Luna: That's a nice touch. It's not just about the product — it's about who's behind the counter. Lucas: And here's the thing, Luna. He didn't overhaul everything overnight. He ran a few small experiments first. He tested cold brew for two weeks, watched the sales data, and only then committed to the new menu items. Lucas: That's the disciplined franchisee playbook — you don't blow up your model based on a hunch. You test, measure, and then scale what works. Luna: So what was the financial impact after, say, a year? Lucas: His sales were up about eleven percent year-over-year, and the late-afternoon window, which used to be dead, was now contributing a solid chunk of revenue. He also saw a big jump in repeat visits from the new residents — loyalty was building. Luna: That's a great result. But I'm guessing not every franchisee in a changing neighborhood gets it right. What's the risk of overcorrecting? Lucas: That's the flip side. If you go too far, you alienate your existing loyal customers. I've seen cases where a franchisee swapped out the entire menu, went too upscale, and the old crowd felt pushed out — and the new crowd didn't stick either. Luna: So it's a balancing act. You need to keep the core while adding a few new things. Lucas: Exactly. Mike kept his classic donuts and coffee, just added the cold brew and oat milk as options. He didn't rip out the counter or change the logo. He made incremental changes that signaled evolution, not revolution. Luna: And he used community feedback too, right? I remember you mentioned he did some listening. Lucas: Yeah, he did. He put a small suggestion box by the register and actually read the slips. He also paid attention to what people were ordering that wasn't on the menu — like asking for avocado toast, which he never added, but it told him what the neighborhood wanted. Lucas: And honestly, that's the kind of low-cost research that any franchisee can do, regardless of budget. Luna: You know, Lucas, this whole conversation reminds me why we do this show. We go deep into these real-world strategies, and there's no ad break telling us to buy something. That's a choice we make deliberately. Lucas: Yeah, we keep it ad-free on purpose. If these conversations have moved your work forward in some small way, and you want to support that, the link is buy me a coffee dot com slash fexingo. Luna: And even a small coffee helps us keep doing this. No pressure, just an option. Lucas: Right. Now, back to Mike — one of the smartest things he did was build a relationship with the local community board. He started attending their monthly meetings, which is not something most franchisees do. Luna: What did that get him? Lucas: He heard about a new bus route that was coming through, and he knew the city was planning a public plaza a block away. That gave him a heads-up on foot traffic changes before they happened. He could prepare his staffing and inventory accordingly. Luna: So it's not just about reacting — it's about anticipating. That's a big advantage. Lucas: Exactly. And it ties back to something we've talked about before: the best franchisees treat their store like a living part of the neighborhood, not just a unit in a system. Lucas: Another thing Mike did was update his Google Business profile with the new hours and photos of the cold brew. It sounds basic, but a lot of franchisees neglect that, and it's the first thing people see when they search for coffee nearby. Luna: Yeah, especially with the younger crowd — they check Google Maps before they walk in. Lucas: Right. And he also started a simple loyalty program — stamped cards — which is a classic franchise move, but it worked because he was getting new customers who needed a reason to come back. The redemption rate was solid, and it helped build that repeat business. Lucas: So what's the takeaway for a franchisee who's looking at their own neighborhood and wondering if it's changing? Start with the data, but don't wait for a perfect picture. Run one small experiment, talk to your customers, and let the numbers guide you. Luna: And don't forget to look at who's actually walking by your door, not just the census. Sometimes the data is in front of you. Lucas: That's a great point. Mike did that too — he stood outside his store for an hour one morning, not to sell, just to watch. He noticed how many people had dogs, how many were wearing workout clothes — that told him a lot about the new routine. Lucas: That kind of observation is free, and it's the kind of thing that separates a franchisee who adapts from one who gets left behind. Luna: So what would you say to a franchisee who's in a neighborhood that hasn't changed much yet? Should they be proactive? Lucas: I'd say yes, but gently. Keep an eye on your local planning department's website, set a Google alert for your neighborhood name, and have a rough idea of what you'd do if the demographics started to shift. You don't have to act on it today, but having a playbook ready means you're not scrambling when it happens. Luna: That's reassuring. It's not about predicting the future — it's about being ready for it. Lucas: Exactly. And in Mike's case, that readiness paid off. He didn't just survive the change — he grew because of it. And that's the kind of story we like to tell on this show.