Sonic Drive-In plans 1,000 new units

April 17, 2014

Sonic today announced its plan to open 1,000 new drive-ins within the next 10 years. To support this growth, the company has tripled its sales team and is seeking new franchisees in most markets across the country.

Sonic will remain mostly franchised — at about 90 percent — and will continue offering franchisee support services and a $100 million-plus national ad budget annually.

To spearhead this aggressive expansion, the company hired John Budd last year as its newly created chief development and strategy officer.

"My job is to make sure that Sonic capitalizes on current success and continues to stay on the cutting edge of the quick-service and fast-casual categories," he said in a news release.

The growth strategy focuses on both established and low penetration/untouched markets. Budd said the demand for the brand exists in both types of markets.

"We have a nostalgic brand, but one that is more increasingly modern. We have a highly differentiated brand personality and a high quality menu," he said. "Finding the right partner to grow with is key. We provide support to our franchise partners throughout the entire process and we have a national marketing campaign that makes our franchisees one of the leading advertisers in town the day they open their doors."

In addition to Budd, Sonic also moved Bob Franke into the newly created role of SVP of franchise sales and international development.

Strategy outline

The development team has outlined its new strategic priorities, which include:

  • Growth through franchise agreements in new and developing markets;
  • In-fill development in established markets;
  • Development of non-traditional locations with a focus on airports;
  • Expansion of locations with indoor dining;
  • Planning for international expansion; and
  • Development in small towns utilizing a new, lower-cost building prototype.

In past few months, Sonic has announced franchise development agreements bringing: five new drive-ins to the Rochester, N.Y. market over the next four years; 15 new drive-ins to San Diego County and the greater Los Angeles area over the next six years; 13 new drive-ins to small towns across the country in Louisiana, Oklahoma, Tennessee and Texas and 14 new drive-ins in the greater Seattle market by 2018.

In addition, the chain opened its first location in North Dakota in 2013 — pushing Sonic's state tally to 44 — and reached an agreement with the Wyandotte Nation, an Oklahoma-based Native American tribe, to open its first restaurant in Seneca, Mo.

Sonic kicked off 2014 by announcing a growth target of 300 drive-ins in California by 2020. To achieve this goal, Sonic added to the business development team, with Craig Sherwood leading expansion in California and 15 other western states in addition to the airport expansion initiative. The company also brought on Steve Bailey to lead franchise development for 16 central states. They both join Lori Osley as senior directors of franchise sales.

Long term goals

If Sonic hits its 1,000-unit expansion goal, it will have grown by nearly 30 percent. The plan is to have a presence in all 50 states.

"The brand equity we've built in more than 60 years, the most diversified menu in the category and our continued passion for offering one-of-a-kind service makes Sonic an established and attractive business opportunity for the right partner," Budd said. "Our expansion plans are ambitious, and we've got the right team and the right brand to make it happen."

Sonic currently has more than 3,500 drive-ins in 44 states.

Topics: Franchising & Growth , Restaurant Design / Layout

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