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Sonic Franchise Cost & Fees

Date of Incorporation: 1953

Franchising Since: 1959

Headquarters: Oklahoma City, Oklahoma

 

Business Description: Sonic Franchising LLC, the franchisor, licenses the operation of Sonic Drive-Ins, serving made-to-order premium beef hot dogs, footlong quarter pound coneys, hamburgers and other sandwiches, hand-battered onion rings, tater tots and a full breakfast menu. We are known for our variety of Frozen Favorites treats and Fountain Favorites drinks, too, like cherry limeades, CreamSlush treats and SONIC Blast treats.

 

Franchise Offer: The franchisor offers two types of franchises:

  • A Traditional Sonic Drive-In typically is a free-standing, one-story building with surrounding parking stalls covered by canopies, providing in-car service for approximately 16 to 24 cars. Many Sonic Drive-Ins also incorporate drive-thru service and patio seating, and some may provide an enclosed patio or indoor seating.
  • A Non-Traditional Sonic is any location other than a Traditional Sonic Drive-In. Those locations include (among others not listed): (1) military and other governmental facilities; (2) universities and schools; (3) airports and other transportation facilities; (4) stadiums, arenas and other sports and entertainment venues; (5) amusement and theme parks; (6) cafeterias and food courts in shopping centers, shopping malls, office buildings, hospitals and industrial facilities; (7) museums, zoos and other public facilities, and (8) highway travel plazas, convenience stores, and gasoline service stations. A location at a highway travel plaza, convenience store, gasoline filling station, or other facility which includes the traditional parking stalls and canopies of a Sonic Drive-In is typically a Traditional Sonic Drive-In and not a Non-Traditional Sonic.

 

Financial Assistance: In limited circumstances, Sonic may offer a build-to-suit arrangement for a Traditional Sonic Drive-In. In such instances, a Sonic affiliate will acquire the site and construct the building, then lease the land and improvements to a franchisee. Except as described, Sonic does not offer, directly or indirectly, any financing arrangements to new franchisees.

 

Training and Assistance: At least one individual working full time at the Sonic Drive-In (usually the operator/manager) must attend and successfully complete the Stage 1 and Stage 2 Career Development Programs prior to the Sonic Drive-In’s opening. Sonic strongly recommends that franchisees, their manager and at least one other individual complete the Stage 1 and Stage 2 Career Development Programs prior to the Sonic Drive-In’s opening. Managers must also successfully complete the Sonic Management Seminar within six months of being placed in a manager position in any drive-in. Sonic requires that franchisees have an A-Team, which is the franchisor’s new-store certified training team, participate in the pre-opening and opening of a franchisee’s first three Sonic Drive-Ins. From time to time, Sonic may offer seminars at varying costs to franchisees on selected Sonic Drive-In operation aspects, such as personnel selection and training, food cost control, management skills and advertising/marketing.

 

Territory: Sonic will grant franchisees the right to operate a Sonic Drive-In either at a specific location or at a location within a specified area subject to Sonic’s approval of the specific location within six months after the License Agreement date. Sonic will not own or operate a Sonic Drive-In and will not franchise any other person to own or operate a Sonic Drive-In (other than a Sonic Drive-In licensed prior to the License Agreement date) within the “Protected Area” which is defined in a franchisee’s License Agreement, and based off of four different criteria (defined in the FDD). The Non-Traditional License Agreement will not grant franchisees an exclusive territory or protected area and will not prohibit the development of any restaurant or other business concept by Sonic, its affiliates, or its other franchisees at any location other than within the specific facility in which the Non-Traditional Sonic operates.

 

Term of Agreement and Renewal: The length of the initial franchise term is 20 years for a traditional Sonic and 5 years for a non-traditional Sonic. Renewal for a traditional Sonic is one additional 10-year term and one additional five-year term for a non-traditional, if requirements are met.

 

Obligations and Restrictions: Sonic does not require that the franchisee personally supervise the operation of the Sonic Drive-In. However, at least one individual (usually the manager) working full time at the Sonic Drive-In must attend and successfully complete the Stage Career Development Program and any other training program developed and designated by Sonic from time to time. Sonic requires franchisees to offer and sell only Sonic-approved items and goods. Franchisees must offer all menu items and goods that Sonic requires for all franchisees.

 

Estimated Number of Units: 3,525

 

Investment Tables:

Initial Investment

Traditional Drive-In Sonic

Name of Fee Low High
Franchise Fee $45,000 $45,000
Payroll $13,000 $47,000
Training, Travel and Living Expenses while Training $41,000 $72,000
A-Team Trainers $54,000 $136,000
Advertising Funds $14,000 $25,500
Beginning Inventory $30,000 $85,000
Security Deposits, Impact Fees for Utilities, Utility Deposits, Business License and Other Prepaid Expenses $10,000 $150,000
Insurance Premiums $13,000 $20,500
Additional Funds (3 months) $5,000 $10,000
Land Variable
Building and Site Work $502,000 $614,000
Equipment $180,000 $230,000
Point-of-Sale System and Digital Menu Housings $93,000 $130,000
Sonic Sign $15,000 $40,000
Total Estimated Initial Investment (Doesn't Include Land Costs) $1,015,000 $1,605,000

 

Non-Traditional Sonic

Name of Fee Low High
Franchise Fee $22,500 $22,500
Payroll $13,000 $47,000
Training, Travel and Living Expenses while Training $41,000 $72,000
A-Team Trainers $54,000 $136,000
Advertising Funds $14,000 $25,500
Beginning Inventory $30,000 $85,000
Security Deposits, Impact Fees for Utilities, Utility Deposits, Business License and Other Prepaid Expenses $10,000 $50,000
Insurance Premiums $11,000 $17,500
Additional Funds (3 months) $5,000 $10,000
Real Estate Rent $15,000 $46,500
Improvements $38,000 $400,000
Equipment $140,000 $210,000
Point-of-Sale System and Other Technology $50,000 $80,000
Total Estimated Initial Investment $443,500 $1,201,500

 

Other Fees

Type of Fee Amount
Royalty Fee Up to 5.0% of Gross Sales.
Brand Fee 0.90% of Gross Sales.
Advertising Cooperative Fee 3.25% (Minimum) of Gross Sales.
Additional Training Fee $400 per Person.
Transfer Fee $3,000
Audit Fee and Surcharge Cost of Audit plus 10% of unpaid amounts.
Late Charge 1.75% per month of Amount Overdue.
Renewal Fee $9,000 Traditional and $4,500 Non-Traditional.
Rent under Build-to-Suit Lease Agreement Varies.

The above information has been taken from the FDD of Sonic. Year of FDD: 2013

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