Restaurants and stores on Guadalupe Street come and go with alarming frequency. In recent years, the balance between national chains and local businesses on the Drag has grown increasingly precarious.

“We have something that those other businesses don’t have, and that’s a lot of history and nostalgia and generations of Austinites and UT students,” said Daniel Young, the general manager at Dirty Martin’s Place. “Last weekend, there was a table that came in that had a current student with their parents, grandparents and great-grandparents — four generations that had all eaten here. The great-grandparents ate here in the 1940s. That’s something Whataburger, and certainly In-N-Out, doesn’t have.”

According to market value data from the Travis Central Appraisal District, local businesses more closely represent Austin’s economy than national chains, which are often insulated from local booms and slumps. 

The Austin-Round Rock business cycle index, which reflects the overall health of the greater Austin area’s economy, rose steadily from an average of 667.5 in 2020 to 882.7 in 2024, surpassing pre-pandemic levels in 2022. The index, calculated by the Federal Reserve Bank of Dallas, uses a variety of factors ranging from wages and employment to business activity in order to approximate an area’s value. 

When compared to market value, the appraised value of a business’s property, local businesses on The Drag appear to mirror the rise in Austin’s business cycle index.

Architectural engineering senior Kira Kanagaki works at CoCo’s Cafe as the general manager for the business’s Guadalupe Street location. She said the business sets itself apart from national chains by prioritizing UT students in every aspect of its operations.

“All of our employees are all college students,” Kanagaki said. “I work with the owner sometimes (on) our seasonal drinks, so they get student input on that.”

The owner and co-founder of Medici Roasting, Michael Vaclav, said that competition with national chains means more variety for students. 

Coffee shops on Guadalupe Street offer a snapshot of the larger economic picture. Over the last four years, Medici’s market value appraisal rose steadily, following Austin’s index trends. Lucky Lab Coffee Co., another local coffee shop on The Drag, also saw a steady rise in market value. Starbucks, the largest chain coffee shop on The Drag, saw a decline in market value appraisal each year since 2020.  

“There’s different markets for different types of customers,” Vaclav said. “One thing that Starbucks has is you can get the same drink in Tokyo as you can on UT campus. … When you provide that type of consistency across a large market, you have to bring (the quality of) everything down a little bit. … We have a little bit more intimacy with our product and can do things that are unique and different.”

Medici opened its own roasting facility in August 2019, a business endeavor which Vaclav said did not gain momentum until 2023 due to the pandemic. While Vaclav said Medici’s stores account for a majority of bean purchasing from their own roasting facility, Medici also sells its beans wholesale at H-E-B, Central Market, Fresh Plus and a string of local coffee shops.

“Five stores and a roasting facility makes us self-sustaining,” Vaclav said. “So if we do wholesale, that’s a bonus on top.”

Beyond roasting, Medici uses a number of local providers for its products sold alongside coffee, a choice Vaclav said is not necessarily in the interest of profitability.

“We’re not a taco company that sells coffee, we’re a coffee company that sells tacos,” Vaclav said. “We’ve always tried to keep that ethos, so our margins are not as great on our on our food offerings. We try to keep that (rate) a little bit lower than what we should probably be charging.”

Vaclav said Medici prioritizes giving back to the local economy and coffee community. Over the years, Vaclav said about eight or nine other coffee shops have come from former Medici employees, including Houndstooth Coffee and Fleet Coffee.

Many local businesses prioritize local suppliers for sourcing ingredients, pouring money back into the local economy. 

Medici sources its sandwiches from The Green Cart, a company located in East Austin. Vaclav said that over the years Medici has sold a slew of local businesses’ pastries, including Quack’s 43rd Street Bakery, Texas French Bread and Easy Tiger. Medici currently sources pastries for its six locations from the locally-owned Teal House Coffee and Bakery. Young said Dirty Martin’s sources its buns from San Marcos and uses the Austin-based produce company, Segovia Produce. 

While coffee pricing remains a contentious topic, Vaclav said that, compared to other beverages, “nobody pays what coffee is actually worth.” He said people expect an experience when they purchase a beverage, whether alcohol or coffee. While people are willing to pay $20 for a cocktail, they expect lower prices for coffee. Still, he said that for coffee, the process justifies the price point. 

“This is a three-to-six month process before (the beans) even make it here,” Vaclav said. “If coffee is not done well at (one) point … you’re not going to have a good cup of coffee.”

In 2013, Vaclav said the Medici on The Drag nearly shut down after an old sewage pipe under the building caused a 10-foot crack in the floor next to the register, accompanied by a nauseating stench and flies. He said that incident, along with the COVID-19 pandemic, both nearly forced the café to permanently close its doors on Guadalupe Street. 

“There’s a lot of medium-to-low crisis, even medium-to-high crisis moments, but that’s just part of business,” Vaclav said. “You talk to any business owner, that’s just par for the course.”

Kanagaki said that CoCo’s Cafe pushed through the pandemic and rising rent over the years by raising prices. Now, the Trump administration’s new tariffs pose a challenge for the business’s operations.

“We import a lot of stuff from Taiwan, so we’ve had to raise prices,” Kanagaki said.

In a competitive market like Austin, Vaclav said that people’s attention is a hard-earned commodity. 

Young said that after 99 years Dirty Martin’s has cemented its place in local hearts by understanding the value of a dollar.

“The old Austin folks and the tourists are always going to come, and they’re going to have the money to spend,” Young said. “I realize students are often on a budget, so every day we have a food special and a drink special and a happy hour. … We want to build this business on volume and loyalty, and if we can do enough volume, the costs even out.”