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Sonic Franchise Review

About.com Rating 4 Star Rating
User Rating 1 Star Rating (1 Review)

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What's as fast as the speed of sound and comes with your choice of condiments? Sonic, America's Drive-In. It all started in1953 with a small hamburger and root beer stand named "Top Hat Drive-In" located in Shawnee, Oklahoma. Top Hat changed its name to Sonic in 1959 and today the franchise chain has more than 3,500 drive-ins coast to coast serving over a million customers every day.
By offering made-to-order American fare with curbside speakers and speedy Carhops, Sonic (Service with the Speed of Sound) Corporation has built its empire around the drive-in restaurant experience. Today, the Sonic brand is the nation's largest chain of drive-in restaurants.

Background and Benefits

Sonic boasts one of the lowest turnover ratios in quick-service restaurant franchises. Customers can park under a shady canopy and order food through the curbside speakers. A friendly Carhop delivers orders out to the car where patrons can eat it or take it home. The concept cuts down on busy drive through lines and presents a unique eating experience to customers. A standard store layout with 24 to 36 stalls requires approximately ¾ of an acre for build out. Sonic Food is made-to-order with unique menu items not offered at other QSR's. Sonic maintains strong sales growth, with remarkable customer frequency statistics and continued high returns for stockholders.

How Much Does a Sonic Franchise Cost?

Sonic offers franchises in two different formats, traditional and non-traditional.

Traditional franchises come with a 20-year term, and a 10-year renewal opportunity with a $45,000 franchise fee requirement. The total initial investment ranges from $710,000 to $3 million with cash liquidity of $1 million and total net worth of $1 million in order to meet the 2-store minimum. Royalty fees are 4 to 5 percent; advertising fees are 5.9 percent.

Non-traditional franchises start with a 10-year term, a 5-year renewal, and a $22,500 franchise fee. The total initial investment ranges from $434,000 to $545,000, excluding land costs. Other non-traditional locations start with a manageable investment of $107,000 to $221,000. In addition, you must have prior or current successful restaurant experience and/or strong entrepreneurial skills. Sonic offers a 12-week training program that includes eight weeks of restaurant training, three weeks at new store openings and one week of classroom training. *Sonic opportunities are not available in every state. Check the website for available markets

What We Like

Sonic offers a concept-marketing brand that spans 5 decades. A Sonic franchise offers unique menu options and outside service convenience while retaining face-to-face contact with customers. Patrons enjoy the fast and friendly Carhops enough to visit over 3500 Sonic restaurants a million times per day! Sonic started out as a hamburger and root beer stand and the first drive-in Sonic franchise is still serving customers in Stillwater, Oklahoma.

Pros

  • Unit Sales - Average unit sales have increased each year since 1987.
  • Conceptualized Marketing - The Happy Hour concept drives traffic and sales throughout the system.

Cons

  • No One-Hit-Wonders - Sonic only accepting franchisees qualified to open 2 or more drive-ins.

Sonic Drive In Restaurants Franchise Information

Business Established: 1953
Franchising Since: 1956
Franchise Fee: $22,500 to 45,000
Total Investment (US): $107,000 to $3 million depending on store type

User Reviews

 1 out of 5
Sonic corporate is struggling, Member unhappysonic

Good Luck with your endeavor; youíll need it!! Sonic has some major flaws that you wonít know about until itís too late. Iíll only touch on a couple of the issues, but these may lead you to ask about other issues. 1) Breakfast- there is nothing on the Sonic menu that people want and are willing to pay for daily, otherwise the breakfast sales would be much higher than they are. You need to compare the breakfast sales at Sonic from 6am-11am to that of other franchises. Most locations donít do enough business to even cover the variable costs; they certainly donít contribute to the fixed costs. The one thing that breakfast sales do accomplish, they increase the amount that you are required to pay Sonic. Letís face it, our best asset is not the building or the food, itís the people. You will use up approximately 35 hours of your Management Labor for incremental sales that donít amount to enough to even pay the additional expenses they create. WHY??? 2) Computer System- Sonic has been in bed with Order Matic Corp (OMC) for so long that approximately 85% of all Sonic locations need new computer systems due to the fact that OMC is going out of business. There have been about 2-5 other approved computer vendors in the last 5 years, but none of them have been able to get enough business to even be interested in supplying Sonic with ALL new computers as OMC goes away. There is a new list of approved computer vendors, but these companies have an existing customer base that must be serviced while trying to create, build, install, and bring online nearly 4000 Sonic locations overnight. Who is going to be the big loser in all this chaos? The Customers will be the losers in the first stage, but then the Sonic Franchisee who disappointed all those customers will pay the ultimate price. 3) Ask Sonic for the customer count from 2005-current for each of their store. Sales are based on Menu price, # of customers, and quantity of purchases per customer. If your Sales are the same as last year, then you have lost customers, because menu prices have risen significantly over the years. If your customer count is not increasing each year, or at least staying level, then your sales are only increasing due to increased menu prices. The problem with relying on increased menu pricing is that your food costs are steadily increasing. The price increases are really only designed to try to keep up with increased food costs. Itís all about the customer count. 4) Why is Sonic seeing such hard times while McDonaldís, Chick Fil A, and many others are thriving?? Itís all based on leadership of the company.

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