Latest / Franchise Conversations with Fexingo: Buying, Running, and Scaling Franchise Businesses / How Franchisees Use Pop-Up Kitchens to Test New Menus
Transcript
- Lucas: Luna, you know that feeling when a new menu item sounds great on paper, but you have no idea if customers will actually buy it? Luna: Oh, absolutely. And for franchisees, rolling out a new item can be a huge bet — not just in ingredients, but in training, marketing, and potential brand confusion if it flops. Lucas: Right. So today, I want to talk about a strategy that's gaining traction among quick-service franchisees: using pop-up kitchens to test new menu concepts. Not a separate location, but a temporary setup inside your existing space — or even a ghost kitchen — to gauge demand before you commit to a full rollout. Luna: That sounds smart. And I bet it's cheaper than a traditional test market. What's the typical cost difference? Lucas: Well, a formal test market with a franchisor-approved rollout can run into six figures for a multi-unit operator — new equipment, signage, maybe even a remodel. A pop-up, on the other hand, might cost a few thousand dollars: ingredients, some temporary signage, and a bit of extra labor. The key is that you're testing the customer response, not just the product. Luna: So you're basically running a lean experiment inside your own store. I love that. Do you have a concrete example? Lucas: I do. I spoke with a franchisee who runs three burger locations in the Midwest. He'd been pitching a smash burger concept to his franchisor for months, but the corporate team was lukewarm. So instead of waiting, he decided to test it himself — as a limited-time pop-up in one of his stores. He called it a 'secret menu' item, promoted it through his loyalty app and social media, and ran it for four weeks. Luna: And what happened? Lucas: The smash burger accounted for 12 percent of total sales during that window. But more importantly, he tracked repeat purchases — loyalty app data showed that about 40 percent of customers who tried it came back for it a second time. That's a strong signal. He took that data to the franchisor, and they approved a system-wide rollout the next quarter. Luna: Wow. So the pop-up didn't just test the product — it built a business case. That's a great example of using data to influence the franchisor. Lucas: Exactly. And that's the real power of the pop-up approach. You're not just guessing; you're generating evidence. But there are some practical considerations. First, you need to make sure your franchise agreement allows it. Some franchisors have strict rules about menu deviations, even temporary ones. Luna: Right, because brand consistency is a big deal. So what's the best way to get approval? Lucas: Be transparent. Pitch it as a controlled experiment with clear guardrails — a specific timeframe, limited marketing spend, and a commitment to pull the plug if it underperforms. Most franchisors appreciate that kind of initiative as long as you're not going rogue. But you have to ask first. Luna: And what about supply chain? You're not going to get the same vendor pricing for a test item. Lucas: That's a good point. You'll likely buy at retail prices for the test, which eats into your margins. But that's fine, because you're not trying to profit from the pop-up — you're buying information. The goal is to learn, not to make money on the test itself. Luna: So what are some other ways to run a pop-up? You mentioned ghost kitchens. Have you seen franchisees use those successfully? Lucas: Yes. A few years ago, a chicken sandwich franchisee in Texas used a ghost kitchen to test a spicy variant without affecting his main store's operations. He partnered with a delivery-only kitchen in a nearby city, listed the item on delivery apps, and ran it for six weeks. It let him reach a completely different customer base without any overhead. Luna: And that also gives you a clean read, because you're not cannibalizing your existing sales, right? Lucas: Exactly. The data is cleaner because it's a separate channel. He saw a 9 percent conversion rate from delivery app impressions to orders, and that was enough to convince corporate to test it in a couple of traditional stores. So you have two models: in-store pop-up for existing customer feedback, and ghost kitchen for a fresh market test. Luna: Now, what about the marketing side? How do you get the word out without spending a ton? Lucas: You'd be surprised how effective a well-timed social media post can be. That burger franchisee generated a lot of buzz with a simple teaser video on Instagram — he showed the smash burger being made, with a countdown to when it would be available. He also used his loyalty app to send a push notification to his most engaged customers. That's basically free marketing. Luna: And you're also building a sense of exclusivity. 'Secret menu' makes people feel like insiders. That's a nice touch. Lucas: Exactly. But you have to be careful not to overhype — if you promise something and then don't deliver, you'll burn trust. So keep it simple: a clear start date, a clear end date, and a consistent message across all channels. Luna: What about staffing? A pop-up might require extra hands, especially during peak hours. How do you manage that without breaking the bank? Lucas: The key is to schedule strategically. That franchisee ran the pop-up only during lunch and dinner rushes, when he already had a full crew. He cross-trained two of his existing staff on the new item, so he didn't need to hire anyone. The extra labor cost was minimal — maybe an extra hour per shift for prep. Luna: So the incremental cost is really just the ingredients and a bit of time. That's pretty manageable. But what if the test goes wrong? What if sales are terrible? Lucas: Then you've learned something valuable for a few thousand dollars instead of a few hundred thousand. And you can pivot quickly — maybe the product is fine but the pricing is off, or the presentation doesn't work. You can tweak and try again. That's the beauty of a short test window. Luna: Have you seen any franchisees use pop-up concepts just for seasonal items, like holiday specials? Lucas: Definitely. A coffee franchisee in the Pacific Northwest tested a maple pecan latte as a November pop-up. It did so well that it became a permanent seasonal item. But the key was that he didn't just look at sales — he also surveyed customers after they ordered it, asking if they'd come back specifically for that drink. That qualitative data was just as important as the numbers. Luna: So you're combining quantitative and qualitative feedback. That makes the case stronger. And I bet the franchisor loves that because it reduces their risk too. Lucas: Absolutely. When you bring a franchisor a pop-up test with clear data and customer feedback, you're essentially de-risking their decision. That's much more persuasive than just saying, 'I think this will sell.' Luna: Now, what about the potential downsides? I imagine some franchisors might see a pop-up as a violation of brand standards, even if it's temporary. Lucas: That's a real concern. That's why it's critical to get written approval before you start. You also want to make sure your pop-up doesn't confuse customers — if it looks too different from your normal menu, they might wonder if the brand is changing. So keep the core identity intact while offering something new. Luna: So you're adding a new item, but you're not reinventing the wheel. That makes sense. Lucas: Right. You're testing, not transforming. And you should always set clear success metrics upfront — what does 'good enough' look like? Is it a certain percentage of sales, a repeat purchase rate, or maybe a feedback score? Without that, it's just a fun experiment with no decision-making power. Luna: That's a great point. I think a lot of franchisees might try this just because it sounds cool, but they don't define what success means. And then they can't make a case to the franchisor. Lucas: Exactly. So my advice: start with the end in mind. What decision will this test inform? And what data will help you make that decision? Then design the pop-up to capture that data. Luna: So if a franchisee is thinking about trying this, what's the first step? Lucas: Talk to your franchisor. Have a conversation about your idea, your plan, and your metrics. Get their buy-in early. Then, if they're on board, start small — one store, one item, one week. Learn from that, refine, and scale up if it works. Luna: That sounds like a low-risk way to innovate. And honestly, in a world where consumer tastes change fast, having a way to test quickly is a huge advantage for a franchisee. Lucas: It really is. And this approach isn't just for food — I've seen retail franchisees test new product lines with pop-up displays, and service-based franchises test new offerings with limited-time bundles. The principle is universal: test cheap, learn fast, and let the data guide you. Luna: Yeah, that's a smart way to think about it. And you know, Lucas, if today's conversation gave someone a new idea for their franchise, I think that's worth a coffee. If you found value in what we share each week, and you want to keep this show ad-free and independent, the best way to support us is to buy me a coffee dot com slash fexingo. It's a small gesture that means a lot. Lucas: That's right. Every little bit helps us keep doing what we love — talking to smart operators and sharing practical strategies like this. So if you're able, we'd appreciate it. Now, back to pop-ups: one thing I want to emphasize is that this isn't about being sneaky or bypassing your franchisor. It's about being a proactive partner. Luna: Right. And when you bring data, you're not just asking for permission — you're showing you're invested in the brand's success. Lucas: Exactly. So if you're a franchisee sitting on a menu idea you love, don't just keep it in your back pocket. Give it a cheap, fast test. You might surprise yourself — and your franchisor.