Don't Ignore Grassroots Efforts When Building Your Brand With Lee Marcum, CEO of Jack’s Donuts
Lee Marcum is the CEO of Jack’s Donuts, based in New Castle, Indiana. Founded by his grandfather in 1961, he is a third-generation owner of the business. Over the past decade, Lee led Jack’s transformation from a $250K-per-year single-store to a multimillion-dollar brand with more than 20 locations across the US.
Here’s a glimpse of what you’ll learn:
Lee Marcum tells the story of how his grandfather Jack founded Jack’s Donuts
How boredom inspired Lee to explore franchising
What makes Jack’s Donuts unique among its competition?
Lee’s method of ensuring franchisees stay true to the brand
How an Indiana brand successfully penetrated multiple Floridian markets
Why Jack’s Donuts has been slow to launch an app
Lee’s thoughts on micromanagement
What you’ll learn in this episode:
Would you like to establish your brand in a new market? Although your product may be popular in your community, it’s unknown in another location. You don’t have to come up with grand ideas or a massive budget because the fastest way to grow is through the customer experience.
Jack’s Donuts consisted of one popular location in Indiana from 1961 until 2007, when Lee Marcum purchased the restaurant from his father. Lee’s entrepreneurial spirit drove him to expand the brand through franchising, and over the past decade-plus, he added more than 20 locations in multiple states. When moving into a new market, Lee explains how Jack’s found success through grassroots efforts rather than throwing money into social media and advertising. Lee’s strategy is to designate one person to attend events (like farmer’s markets) in new communities, set up a Jack’s Donuts tent, and hand out free doughnuts to anyone who wants one.
On this episode of From Persona to Personal, Roger Hurni sits down with Lee Marcum, CEO of Jack’s Donuts, to discuss the keys to successfully franchising a small restaurant brand and breaking into new markets. Lee talks about the history of Jack’s Donuts since its inception in the early 60s, why he decided to expand through franchising, and how grassroots tactics won customers in new communities.
Resources mentioned in this episode:
This episode’s sponsor:
Today’s episode is brought to you by Off Madison Ave. At Off Madison Ave, we create meaningful moments of brand trust and influence how people interact and engage with brands.
There is a science behind tapping into your audiences’ desires and motivation. After all, if you’re not changing your audiences’ behaviors, you can’t truly unlock all of your brand’s potential.
The proven models and methods of Behavior Design is the strategic foundation for your brands’ success.
Episode Transcript
Intro 0:02
This is From Persona to Personal podcast. Today's episode is brought to you by Off Madison Ave. Off Madison Ave creates meaningful moments of brand trust and influences how people interact and engage with brands. The science behind their approach taps into your audience's motivations and desires. After all, if you're not changing your audience's behaviors, you can't truly unlock all of your brand's potential. Now, let's get started with the show.
Roger Hurni 0:33
Hello, everyone, I am Roger Hurni, the host of From Persona to Personal where I get to use my expertise in consumer behavior modification to engage with top business leaders propelling their brands forward. Before I get to today's guest, this episode is brought to you by Off Madison Ave. Off Madison Ave, we use behavioral science to create meaningful moments of brand trust, which influences how people interact and engage with companies. Our behavioral approach taps into your audience's motivation and prompts them to shift behavior. And if you're not changing your audience's behaviors, you truly can't unlock all of your brand's potential. These proven behavioral models and methods are the strategic foundation for your brand success. Visit offmadisonave.com to learn more. Now I am super pleased to have with me today Lee Marcum. Lee is the CEO and third generation of the family owned Jack’s Donuts located in New Castle Indiana. Jack's Donuts has more than 25 locations in Indiana and in Florida, and many more locations coming soon. So clearly this is a fastest growing business. Under Lee's guidance though, he has transformed Jack's Donuts from a single $200,000 A year store into a $20 million-a-year company. As I said before, it is aggressively growing. Lee, welcome to the show.
Lee Marcum 1:56
Thank you so much for having me, Roger, really, really glad to be here. I'm really excited to kind of talk to you and tell my story about Jack’s Donuts. And where we've continued to grow and expand and we're just you know, like, it's doughnuts are just one of those things that if you don't like donuts, I really just don't think I can trust you as a person. That's just the way that
Roger Hurni 2:15
I feel about it. That is really, really true. Very, very true. I genuinely asked this question. Although your intro was fairly easy to know difficult names or companies doing miss up anything. Do we need a dark
Lee Marcum 2:27
spot on you? We're good. You were good. All right.
Roger Hurni 2:30
I read BIOS professionally for a living. No, I don't. I could. I honestly do love multi Gen. Let me say that again. I actually love multi generational businesses. I've interviewed quite a few the last one they were on their seventh generation that's how old the business was. So I'd love the origin stories of their of these businesses. What's What's your family's story? What? Why Jack's doughnuts in the beginning? How did it come to be?
Lee Marcum 3:00
My grandfather started who was the original Jack Jack the first i My name actually is legally Jack the third I just go by Lee. That is what happens. I believe when your parents get divorced at a young age and your mom's like I'm not gonna call you about my ex husband's name. That's just not happening. So but so I but my grandfather started in 1961 Here in New Castle, Indiana, which is about 40 miles east of Indianapolis. So when he started it he had he had had to quit school when he was in fourth grade. Because his this was in, you know, we're talking in the 30s because his our 30s and 40s because his father had essentially just my great great grandfather had essentially just vanished. And so he was the oldest son and had to step up. And so he went to work for our local city department here when he was in fifth grade. I don't think that's legal now in the year 2023. But that's what he did. And so he just worked and worked and he worked for our local city department here and ended up eventually getting into baking in a company or at a local business called bills donuts here in New Castle and ended up falling in love with it. So he and my grandma and 1961 officially opened Jack's donuts on April 1 of all days. April Fool's 1961. And it's been in the same location the original location ever since then, though, did you?
Roger Hurni 4:38
Did you have only one location until you took over?
Lee Marcum 4:41
That's correct. Yeah. When I bought it My son My grandfather owned it from 61 to 77. And then my dad owned it from 77 to 2007. I bought the business in 2007 and did it for about four years and just got bored. I really loved bake He knew it was fun. But my entrepreneurial spirit could not be that it wasn't satisfying. I wasn't getting the fulfillment out of it that I wanted. And I know a lot of people who are okay with that. No, I'm not. I'm not. I was like, There's got to be more here. I can't sit here and continue to do this. I loved the job I had, but I just knew there was so much more. So what I did was I I knew nothing about franchising at all. Nothing and one of my wife's co workers husband's brother in law was a franchise or was was that just become had just passed the bar to become an attorney, and was working at a company that did franchise agreements for Arby's. Right. And so that's how it kind of got started. He was a new attorney, trying to figure his way. I was a new business owner, new entrepreneur trying to grow my business. And that's kind of like a match made in heaven.
Roger Hurni 5:59
How many stores are corporate owned? Just one
Lee Marcum 6:03
the nudist county original, just the original one every other ones franchised out so I own the original one. My grandfather owned it that my dad had gone off my dad.
Roger Hurni 6:11
Okay, I really sarcastic I would go up to my father or my grandfather. I'd be like one location all those years? What gives?
Lee Marcum 6:17
Yep, exactly. I've done that with my I've done that with my dad numerous times. Yeah. So yeah. So where are you? Where were you just like sleepy or what? So yeah.
Roger Hurni 6:28
As I said, pre interview, I think donut should be its own food group. And one. And I'd love that. If I owned a donut shop, I will tell you right now, every donut would be chocolate, some variety of chocolate. But that's just my jam. Sure. I do feel like doughnuts are one of those, one of those foods that even the worst donut is still okay. But clearly, something's really special about Jack's doughnuts. And do you do something different than I don't want to mention competitors. But everybody else,
Lee Marcum 7:00
I think the what we do is, we walk that fine line of still understanding where our roots are, where we just say, You know what, we are known for a simple classic donut shop. So let's stay in that lane. And let's always understand above all that that's the lane that we stay in. And we don't go outside, we can go outside of that lane. But ultimately, we've always got to go back there. And it's really no different than, like a like a McDonald's or something like that. Understanding that cheeseburgers and fries really are what I mean, that's what brings, that's what that's what puts a roof over our head. That's what pays the bills. And we can throw in a grimace, shake every once in a while. And we can do that every once awhile. But ultimately, we've got to be good at the basic stuff that we're known for. And that's something I've always kind of stuck to. And I think that's that's why we why we've been so successful, why we've had longevity the way this happens, because it's just we're an old school donut shop.
Roger Hurni 8:05
So I want to translate that into because there's a great quality there. And I've seen this happen, unfortunately, a lot in my career, where I'm not saying franchisees can't have great ideas. But it can be difficult, particularly in a multi generational business to manage the franchisees in a way that they stay true to the brand. So I'm kind of curious with you. How do you go about that process? What are you looking for? What do you look for in a franchisee to make sure that you know, they they stay true?
Lee Marcum 8:40
I think that it's one of those things where you have to constantly keep that line of communication open. It's not one of those things where you can just show up for the check. Every month, you have to constantly be in contact with these people, make yourself available to them. But also understand and explain to them your reasoning for everything. I'm not a fan of why do you do it? Because it's the way we've always done? Or it's just that is what it is? No, I'm a fan of No, we're in this together. We're a team. And I'm going to tell you why we do this, I'm not just going to tell you to do it. I'm going to explain to you why. And even though that may take a little longer, the long run is going to pay off because they're gonna people are eventually going to get where they're going to stop or they're going to say there's a reason Lee is doing this. So we're going to trust that. And now that's a lot easier said than done. Because trust is one of those things that does take time to build. But I think ultimately, communicating with people and letting them know why you're doing what you're doing is the best way to do communications key and everything.
Roger Hurni 9:46
Then I noticed in the work that I do in behavioral marketing, it translates a lot into operations. If you're going to change the behavior. You need to tap into the motivation None of those franchisees and you see, clearly have found a way to do that. Which leads me to my next question, when you've got one store, and it's been a theme location for decades, from a marketing guy, perspective, it, look, the location is the marketing, the quality of product and the experiences the marketing, particularly with that kind of longevity. But when you expand into Florida, nobody knows who you are so super curious as to what did you do to see that market? And how did you get audiences to understand who you are, and what Jack donut Jack's donuts is all about?
Lee Marcum 10:38
Ultimately, I mean, you can you can go anywhere and throw a bunch of money at local media and promote it. And we while 25 stores is a good start, it's not enough to have a multimillion dollar ad campaign, which is really what it takes if you're gonna go into a completely new market. So what you have to do is you have to what we've done is we've designated somebody to be like, hey, this person's job is to go into this area. And their sole purpose is to promote, promote, promote. Now promoting for us at this phase is more of a grassroots effort that is joining the Chamber of Commerce in Sarasota anytime there's any sort of an event that's going on. In regards it's a community based thing, whether it's a farmers market or whatever, are Jack's don't as tent are Jack's doughnuts tent is there, we are handing out product we're giving product, to whoever will, is willing to eat a free doughnut, which if somebody's not willing to get a free doughnut, I don't even know why we want to hang out with them. But but that's really what it's, that's really what we do is we put the product in people's hands. And that is the best thing that we have seen. That's worked for us.
Roger Hurni 12:00
You know, I want to translate this because I, I know when I ever I speak to guests like yourself, there's always great advice. You don't have to have a big budget, what do you do is have to have big ideas in I've told plenty of clients over the years, you will brand yourself faster by that customer experience, more so than you will by spending a lot of money. And so the question really wasn't a lead toward like how much money you're spending in marketing that is somewhat irrelevant. Honestly, for a lot of people, but particularly a smaller growing kind of chain, getting the donut in someone's hand, and allowing them to experience that those grassroots efforts. There are so many smaller businesses that think you know what I need to go do social media, I need to gear up an influence, I need to go do that. You don't have to do that. The customer experience trying the donut that tangible taste and flavor and experience even if you're not inside the shop, and that person has brought doughnuts somewhere. That's, it's really invaluable. And I don't think enough businesses take that into consideration as a part of their marketing mix.
Lee Marcum 13:10
You know what, you're exactly right. And I think that and I was guilty of that even five or six years ago. Thank you. Social media, social media, social media, and social media is a really effective tool. And I would even say that, like as an example, our best tweet that we ever had, and our Twitter following is really, I mean, like we have probably 4003 or 4000 followers on there. It's not really that impressive. But our best tweet was here locally in Indianapolis, the our Indianapolis Colts, were doing really well at the end of season are doing really well all season at the end of the season, they just flopped. And so as a joke, I tweeted, really regretting buying all those blue and white sprinkles. And because you know we would have we would have a cold theme doughnuts all throughout the playoffs. And that thing, for lack of a better word viral it went viral locally. And Dido this is this is a video so I did the quotation marks when I said viral because I think it was maybe 1000 or 1200 people that liked it, which was big for us here in India so but I would even say that that tweet even for as well as that formed was off somebody's mind within a minute after they liked it. So like, that's, that's social media kind of in general, you're just gonna get kind of lost in the mix. It does help you stay on somebody's mind if you do it steadily. But you will. You do have the chance of getting lost in the mix where as opposed to putting the product in somebody's and that if they're able to have that personal connection with whoever it be, whether it be the owner, whether it be a barista, whether it be a baker, that they can have that experience and they can feel like there may be a part of it, or they know something that somebody else doesn't know about a new business. It's coming in the area. Oh my gosh, I mean, that is going to go so much further
Roger Hurni 15:10
rent? Well, in terms of social, I mean, there's the paid part of it. And, again, certain businesses at certain sizes, it's good certain other businesses and certain sizes, it's not.
Lee Marcum 15:22
Do you do a lot of
Roger Hurni 15:24
social listening? If you're, if your customers are having these incredible experiences, they're going to shift behavior because of their level of motivation to be like, here I am with the selfie in this grade done it, or they're going to? So are you? Are you weighing in? Do you have some sort of social listening program to least amplify that kind of content and are taking the conversation? Well, we we
Lee Marcum 15:47
do we have a couple of people in our office, we always have an intern around that, whose job is that? Kind of be monitoring that and keeping an eye on those things? And to really say, what is it that people are responding to? And what does it seem like the kind of content that people are getting excited about? So we, we always do have an eye on that as well. I mean, trust me, I'm not dogging on social media, it is a very powerful tool, the differences. It's not the only tool, and so many businesses just use it for that now, where it's like, that's not all you can do. You can't just post on Facebook, you can't just post on Instagram, you can't tweet you can't thread or whatever. However you say that now that's the new one that came out yesterday. So yeah, you can't just do that. Well,
Roger Hurni 16:33
so there's a lot of grassroots efforts, which makes total sense to me strategically, there's some social listening and some weighing in. Is there anything else that you do to get those stores up and running when someone purchases one and starts to build that community? Those community relationships?
Lee Marcum 16:52
No, honestly, we we feel very confident product speaks for itself. But we also don't rely on just the product. So much of it is the customer experience, making sure that every customer that comes at has a fantastic experience, but also just building that personal relationship with the community. That is huge. That's really what it's about.
Roger Hurni 17:12
I want to ask you about one thing that that's that's missing. And it may be done purposely. I speak with a lot of people in food and beverage, literally everyone except yourself. And this oyster bar down in New Orleans, as does not have an app, you only the two of you. Yep. And the way apps are taking off. I saw a stat recently that McDonald's last year or last year, had more app downloads than Uber, Tinder. And what was the other one? I can't remember where the other one was, but like three major apps, like add more. And so it the app experience being able to order even if it's just utilitarian level and putting an AI on top of it, has that ever been a thought for you to go down that road? Or why have you stayed away from it?
Lee Marcum 18:06
It is and I will say we're actually in the process of it right now. Okay, we are we have a company that we've got that's working on it right now. And we've spent a lot of time in it to make sure that when it's done, it's going to be one of those things that once it's up, we're not going to have to obviously you're going to be constantly tweaking it, but we want to have it as perfect as it can possibly be. And then we we've had some things we're in the process of opening up a production and distribution center here in Newcastle right now, that is going extremely well. But it's a $4 million project, one of the biggest ones we've had, that we've ever taken on so that so the app part of it has kind of taken a backseat to it. And I've spoken to our franchisees about that. So I'm like, how important is this to you? And they have shared that they feel like they they somewhat have a little bit of an edge by not having an app because it's forcing the people to come in. Now. I don't think it's going to be like that forever. I don't, I think that eventually it's going to end up being like having a website, or I do agree you're gonna have to have something and so many third party. Places like square and clover are just making it easy for everybody to have an app now. Yeah,
Roger Hurni 19:24
I think that's a little limited in the thinking because because the restaurant space, by far and large is much more sophisticated about app usage than any other industry that I really come across. Uh huh. And, you know, the I could see where your franchisees are thinking of it from this utilitarian perspective simply because they said we want people to come in yes, you're gonna come in. There's a big difference between having an app that utilitarian where yes, you can order you can check rewards points, like those things are taped. We'll stakes, but because it can be a one to one communication device at scale, you know, where I'm seeing sophisticated companies going is layering an AI onto that app, I've even consulted with a couple of them. Winner, it looks at the implicit and explicit behaviors of your customers. And then it determines the next interaction. Yeah. Next, your action could be a human, when you walk into a Jack Stone and saying, Hey, Lee, I see that you're back, would you like your regular, never kind of doing it, you know, or loving you to get send a deal, or you're mining that behavioral data to make other operational or marketing decisions. That's where the real value of the Absolutely
Lee Marcum 20:47
100% I mean, it has an example we, you know, I personally, because I think about this all the time, like personally, I was out and I was out in LA, a couple weeks ago with my family, for our summer vacation. And so I was using, I think I DoorDash, more two weeks or the week and a half, I was out there more than I do all year long. And I was noticing that the the deals that are always popping up, it's like DoorDash is reading my mind, as I'm on there already recommending things that like this is where you're going to want to go in this area, because we were bouncing around all over and areas that I was not as familiar with as I am. Oh, and you're exactly right. Is that data that you want?
Roger Hurni 21:32
Yeah, the data is really valuable now? Yes. I'm kind of curious things are, are are clearly going well, you're growing aggressively franchises. I'm wondering, what keeps you up at night? What's the biggest challenge you're facing right now?
Lee Marcum 21:49
This this, this production warehouse that we're building that one is, you know, I would say that just continually as we grow to continue to bring in quality franchisees so many people because we've had a few bad seats and, and there are so many people that only think about them that my my hope is that our franchisees always understand big picture, because big picture is just so important that understanding that, hey, this decision that we've made, while it may not be good for your particular store over here, it's good for the company as a whole. And then that's the way that I, I always try to explain that to our franchisees, whereas, then then the next decision that we make, or the next change we make is going to, you know, help you out substantially, but then this guy over here might not be doing might not be benefiting it from it as much and keeping those people keeping all the franchisees on the same page in regards to understanding that that really can be a challenge. And if I were to tell you that that didn't keep me up at night, that would be I mean, that that would be one of the things that does keep me up at night to make sure that they're understanding that. And also just protecting this brand that I've been extremely fortunate to buy into. I mean, I love this company. I absolutely do i i always say it's my family and Jack Stone, it's like really it is. And it's an
Roger Hurni 23:14
array, which one comes first one.
Lee Marcum 23:17
Family always comes first. But I will say but my wife would probably say are you sure about that? Because it seems like you get up off real quick anytime that phone rings and I but I'm one of those people who is extremely fortunate that why get up in the morning. I would say 98% of the time I absolutely love going to work. The old the 2% I don't is when I'm going to my accounts in my lawyer's office. And it's not because of them. They're wonderful people out there. I'm just doing things I absolutely hate doing.
Roger Hurni 23:44
So yeah. This is why I have a business partner.
Lee Marcum 23:47
i Yeah, exactly. That's exactly right. And that's why I'm trying to open more stores. So I don't ever have to see my accountant or lawyer again, unless we're getting drinks somewhere. So yeah,
Roger Hurni 23:57
exactly. There's been some some great advice that you dispensed in, in this interview and conversation. I always believe that what you don't do is as important as what you do do so what's the worst advice you've ever gotten that you were like, No, I'm not gonna do that.
Lee Marcum 24:15
Oh, my gosh, how much time do you have?
Roger Hurni 24:19
Clearly, you've gotten a lot of the worst advice.
Lee Marcum 24:22
You know, there are just so many people who I guess it would be more about the way the attitude and the way that you speak to people and I just see so many people in business that treat their employees like almost like they're their property, head. And I just hate that and I've seen a lot of successful people do that. And I'm just like there's not enough money in the world to ever make me come and work for you. And like I hear a lot of people say, you know, employees need to be, you know, know where they're places which that is not my philosophy at all. My philosophy is it's like, if you're good enough, you're going to be noticed. And I have that, you know, like, I don't want to babysit people, we're everybody that works for me as an adult, they don't need to be babysat. And if you're not up to par, and you can't hang them, we're gonna move on, I'm not gonna say anything bad about you, I'm just gonna say, this isn't really working out. But if you are here, and you're doing great, I'm gonna give you nothing but room to grow. Because I think when you bring somebody in every person who really does have value, and I think that when you micromanage people, it's not a good thing, because you need to use the ideas, and you need to use the drive and the effect, we can all feed off of each other in here together, and it doesn't have to be one person show everybody can contribute. So the best thing, the worst advice that I would give is to is to nobody system micromanage people, but it's always that, you know, to let people know where their place is, and to keep them in these boxes of I just completely disagree with that. It's like no, you don't don't treat people like they're this isn't the military. It's it's doughnuts, man. It's fun.
Roger Hurni 26:16
I, I couldn't agree more. I am very particular about the words I choose within the companies that I own. One of them is I actually never use the word employee. I understand I contracts that needs to be there. And some I know people will have like all their assistants or associates their partner when I say staffers, and I ListenUp People like it, it sets up the context of employee sounds like you work for me, where a sacristans who work with me, and I liked that separation between the two. And it sounds like you do as
Lee Marcum 26:52
well. Yes, I you know, I always say when somebody you know, they said, Yeah, they weren't for Jack’s. Now that said they would say, well, so there they weren't for you. And I'm like both Well, yeah, but I always say they worked for Jack’s Donuts. It's because to me, it just, it's not because they don't work, or they do work for me. But at the same time, though, you got to let these people do their thing.
Roger Hurni 27:12
Yeah, well, they can work for a company, but they can work with you. Exactly. It's a subtle separation. But I think it's a critical one in terms of really embracing employees because they are your best assets.
Lee Marcum 27:26
100% They are there they really are.
Roger Hurni 27:29
Is something that doughnuts are always going to taste good. They're going to make or break the customer experience. 100% Yes. Well, it's been a pleasure having this conversation, Lee. And I'd love for people to get to know our Learn to know where they can get ahold of you and where they can learn more about Jack's Donuts.
Lee Marcum 27:48
Jacksdonuts.com is the best way to get online and learn about our company. If you want to get in touch with me, email me directly, lee@jacksdonuts.com. Especially if you're a business owner, I'm always looking for people to talk to you about things like that. It's so much fun. Then real quick, I have to say the best advice. It sounds absolutely terrible. But my dad told me this about 15 years ago, he told me and it was it's so true. But it's like wow, it's use this for your advantage is that he told me he said people that aren't as intelligent as you are assumed that you're on your assume that you're on their level. A goes to take advantage of that when you can and I was like, What are you talking about? And he was like an also realize that when you are with somebody smarter than you do that, in case they they're acknowledging that and I was like, What do you mean? Are you are you saying a nice way of saying stupid people assume you're stupid as they already goes? Yes. That's exactly what I'm saying. And that sounds so cold. But it's so true, though. And then he told me that that just to always remember that he said, but ultimately to though treat people how you want to be treated.
Roger Hurni 28:57
That's really, really good. I like it. Well, again, I appreciate the conversation. It's jacksdonuts.com And this is Roger Hurni. And I will see you next time on From Persona to Personal.
Outro 29:12
Thanks for listening to From Persona to Personal, the podcast that takes a closer look into how organizations personalize their marketing. We'll see you again next time and be sure to click Subscribe to get future episodes.
