Sonic Franchise Review, History Earnings and Cost

Sonic Franchise Review, History Earnings and Cost

Super SONIC® known as America’s drive-in is another iconic franchise brand that has grown to over 3500 units since forming 1959. But how did SONIC get so big? And how much does a SONIC franchise cost and how much can I earn? And is Sonic a good investment? Today on Franchise City
SONIC® was started by OKlahoman Troy Smith who once his Army duties came to a close purchased a hamburger, hot dog and root beer stand called the Top Hat. He started working at the rack of dawn delivering bread and then work all day and into the night at the Top Hat. When Troy and new partner Charles (Pah-pay) tried to copyright the name however they discovered it was already copyrighted! At the time America was fascinated with all things Atomic so Sonic seemed a good tie in. In 1959 the first franchise agreement was drawn up and royalties back then amounted to 2 cents per hamburger. The carhops on roller skates were added in and by 1970 SONIC had almost 100 locations and 12 million in gross sales. SONIC went public in 1991 and their “two guys” advertising campaign was launched in 2003 and has become one of the most popular QSR campaigns in history.
Your estimated initial investment to begin operation of a Traditional Sonic Drive-In franchise ranges from approximately $865,000 to $3,641,300 including the $45,000 franchise fee that must be paid to Sonic.
Your maximum royalties will be 5% of gross sales and are based on your revenue, brand fee is .9% of gross sales, and advertising co-op is 3.25% of gross sales.
So how much is Mr. Hudson paid to run Sonic? let’s take a look. According to for 2017 Sonic’s CEO pulled in Three million one hundred and fifty five thousand. That works out to about $12,570 dollars per working day assuming every working day was attended. That’s a lot of mushroom burgers! During his stay Mr. Hudson has created a rare senior management team that is comprised mostly of women and minorities and a board that is is also predominately includes the same. Mr. Hudson says growing up in an era of segregated schools formed his current business views.
A few things you want to be aware of in the FDD. Page 5 Item 5 states that if you have not found a suitable location approved by Sonic within 6 months the contract may be terminated and they’ll keep $15,000 of your $45,000 franchise fee. Item 17 on page 25 refers to rights of termination -and you don’t have any. There is a 20 year term on traditional stores with one 10 year renewal and you should be aware of – NON COMPETITION COVENANTS – which requires no involvement in any competing business for 18 months within 3 miles of your former sonic or within 20m miles of any sonic restaurant – even those under construction
So how much money can I earn with a Sonic franchise? Sonic is one of the few franchises that actually lists their earnings on their website – here is a screen capture. So you can see that the earnings range is so large as to almost be useless data, for franchised restaurants the range of earnings is from $164,000 to $4.1m. Now what Sonic doesn’t show you, and this is taken from Sonic’s 2017 FDD financials as you can see the earnings of the lowest stores has been shrinking from $213,000 in 2015, to $190,000 in 2016 down to the $164,000 in 2017. Average gross sales also dropped from 1.283m in 2016 to 1.252 in 2017. and top store from 4.3 to 4.1.
Now the franchises can manipulate the data in such a way as to sound as appealing as possible, taken from their website “It’s a great time to own a SONIC Franchise” and “”SONIC franchise owners saw average gross sales-by-store increase from $1,072,000 in 2012 to $1,252,000 in 2017, with 25 percent of our stores exceeding $1.5 million in gross sales in fiscal year 2017” You see what they did here – they reached back to 2012 and ignored that pesky data point the year before that would indicate that gross sales have actually shrank from the prior year.
If you are an investor this chart will also be of interest outlining revenues based on geographic location. Looks like the South and the Midwest don’t frequent Sonic as much as their West and Northeast counterparts.
So what do you think? Is the mushroom burger a good idea and have you tried them? Is Clifford Hudson a good CEO or is he overpaid? Will Sonic continue to grow or is their brand on the decline? Comments down below don’t forget to like and subscribe and hit that bell for updates. If you need help finding a franchise call the experts at Franchise City – search over 600 franchise opportunities on our website.

Become A Sonic Franchise Owner

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48 thoughts on “Sonic Franchise Review, History Earnings and Cost

  1. Don't like the drive in concept! I don't like eating in a car!I like dine in restaurants only!

  2. If it wasn't for their commercials I do feel they would be on the decline

  3. You really did your research. Keep of the great work!

  4. The food at Sonic is substandard…. except for the onion rings…. and they are the only fast food joint that doesn't offer free refills for their soft drinks.

  5. Clintons….yea thats all I need to know about Sonic…next!

  6. If the happiness of the employees is any indicator, sonic franchise owners are pretty awful. I wish more places could follow the chick-fil-a or costco model, it's nice to go to a store and not see everyone hating life.

  7. Doing(now owning) business in today's environment boils down to working and earning for:

    Fed Govt
    State Govt
    County Govt

    Yearly Earnings:

    A Bill stating "Please Remit with Payment"

  8. I would personally never buy a sonic franchise because their food taste like shit the worst most disgusting food in the fast food industry.And now that I know the Clintons were instrumental and are very good friends with the guy that is the CEO of sonic I would never buy a sonic franchise ever

  9. I have seen Sonics as I drove around the country, but I do not recall seeing any where I live (Philadelphia). Now that I know they are pro-Clinton I will never eat there.

  10. Sonic ; given the equal chance, would finish 1st, 2nd, or 3rd in any market period. Major thoughts : A change at the corporate level, a major professional sport partner e.g. N.H.L. , A.A.F., W.N.B.A. or M.S.L. , to say the least ; like everyone else , and go all out for NCAA championship game , but sport specific i.e. : ⚽️🏀🏈⚾️⛳️🍿📺

  11. You can tell his reccomendation based off of its age and size

  12. So basically Sonic management are hypocrites and hate Whites just like all Democrats do. Good to know. I'll head to In N Out instead.

  13. I was lookin for a Sonic the hedgehod franchise review lmao

  14. Hey Franchise city can you do one on STATE FARM INSUANCE AND IGA (Independent Grocery Alliance)?

  15. Talks about how you shouldn't bring politics into your business, then proceeds to bring politics into his business. Good channel,v good info, but cut out the politics talk, because almost everybody left or right wants to see big donor money aka legal bribery of our politicians, out of politics.

    Almost all CEOs on all sides of politics, donate to aka bribe our politicians while making hundreds of times more than their employees. Yes it's wrong because they're not getting fair current market value for their labor, but why single out one CEO as if he's a rare case?

  16. Comments on Sonic:
    The ones that are in Sonic's older territories offer very good food and beverage. The ones that have recently opened (i.e. Chicagoland )are very mediocre with a largely untrained and unmotivated staff.

    The beverages are killer calorie bombs which drive away healthy consumers.

    The ONLY time that I am remotely interested in Sonic is when they are offering their low-margin specials. There is little value in their normal pricing.

  17. This video was probably blacklisted because you mentioned Clinton.

  18. the video being demonised not because of its critical sonic review. Clintons ! this is your answer. I bet if you cut the Clinton out and all political comments, and re-upload the video it would be properly ranked.

  19. Please make a video on vegan restaurants franchises, like Veggie Grill.

  20. The video was censored because you brought up the political connections, no doubt. Youtube is extremely partisan and it would sour a lot of right wing investors. When they start complaining you know youre getting to the truth and what matters.

  21. I'm just watching this again and commenting to see if we can get it up in the google search and youtube lists.

  22. I really enjoy this sonic review, thank you for taking time to make the sonic review I love learning about Sonic. yes Sonic is very interesting, we all want to make a lot of money, we have to think hard about what we need to do. Sonic franchises could be an opportunity your critical review was probably helpful in preventing many people from losing life savings. It's important that we all know and understand the truth it's important that we make the best decisions with our money.

  23. Hidden gem of a channel. Hope you keep growing! Even as someone who’s only mildly interested in these topics, you combine solid stats with pleasant presentation and it’s hard to stop watching. Keep it up!

  24. Thanks for the info, won't be going to Sonic at all.

  25. What about Asian cuisine franchises?

  26. Sonic will do alot better when they expand their delivery services past the parking lot.

  27. oh, and this channel is SO SUPER underrated. Very educational. Please keep the videos coming.

  28. A life time ago (2001/2002ish) I worked for Jack in the Box. As I went through Asst Store Manager training, I found out that back in the early 90's, when the E.coli stuff happened to them, they bought out all their franchises and made them all company owned stores. During the time I worked for them, they were pretty adamant to NOT allow franchising to happen. What are some the benefits/down falls of not allowing franchise of a company/brand? Fast forward to now (2018) they are apparently allowing franchises to open up and happen. What do you think might have changed their mind? And what are your thoughts on Jack in the Box period for someone to open up as a Franchise?

  29. Have you done one on uhaul?

  30. Can you do a walmart franchise please

  31. Would u do a video on Bojangles Chicken? Thanks

  32. Please do one for A&W. Big fan of this channel, I am a 25 year old working professional. I have been seriously considering buying a franchise for the last 2 or so years and have been dedicating all of energy into saving up my initial cash requirement. I have been seriously considering A&W as one of my top choices but after discovering your videos, I am no longer certain. I have also been considering the pros and cons of franchising a new location VS buying a pre-existing location and am curious what your thoughts are on that. Thanks!

  33. You really know how to make these videos to the point without the fluff most people would surely add. Love it!
    Can you do one on UFC GYM next?

  34. I hit Sonic 3 times while in Cabool, MO. Everytime they gave me 9-14 fries in a cup. I would go to the door, show them the cup and they filled it. But I got tired of it and the third time, I went in, gave them the cup and said "This is the last time I'll ever hit your company. Keep the money, it's the last you'll see from me" Never hit another one again.

  35. As a Canadian, I like to make a point to go to Sonic when I visit.

  36. we had 5 in our area and now its down to 2

  37. Do a video on Domino's Pizza

  38. Sonic's food and service sucks. I don't know how they stay in business.

  39. I cant stand Democrats

  40. Went to local Sonic once. It had terrible Yelp reviews, but I figured I'd try it anyway. The reviews were not wrong.

  41. Who cares what CEOs earn? People should be more concerned that every child graduates from high school and gets a job, rather than standing around on street corners . we are under direct attack by communists who want the whole country to become like Castro's Cuba, everyone poor.

  42. I worked for Sonic as a car hop. We got paid server wage (less than minimum) and required to claim tips. With that being said! Even when I wasn’t making up the rest of my wage with my tips I’ve claimed, I was still being payed server wage! So basically I was working for less than minimum wage. I spoke to my manager and franchise owner and they literally told me that they would INVESTIGATE me to make sure I’m telling the truth! So they thought I was lying about how much money I was making! Ridiculous. I worked many places with tipped wage and never had an issue. Car hops there don’t make enough and it’s sad.

  43. Can you please do a Culver's one ?

  44. I love how most of us watching barely have money to eat at sonic let alone own one

  45. I think sonic's problem is that they'd do better in a lot of areas a traditional sit-down type restaurant. The problem I see is that having the drive in type set up makes the restaurants more "seasonal" especially in the northern parts of the country, and that some locations don't have drive throughs. This means that you need to have a lot more staff just running food to customers rather and you bottleneck yourself during lunch rushes. Near me one of the sonic locations I sometimes visit is often packed at lunch, to the point that you can't get a parking spot, however it DOESN'T HAVE A DRIVE THROUGH! This means a lot of people end up pulling in, and just looping right on out. That said, they've got some strong points. Their food is pretty good relatively speaking for fast food and I think they do drinks really well (route 44 limeades and all that kind of stuff). What would be an interesting idea is if Sonic partnered up with Tesla to put charging docks in their locations, something that would pull in electric car owners and allow them to charge their cars while eating lunch. Have some kind of nominal fee with the purchase of a value meal.

  46. Do a video on best franchise for passive owners

  47. I love your videos, even though I have no interest franchising, because of how intelligent and balanced your videos are. Keep it up!

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