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sonic drive in franchise store

Sonic Drive-In Franchise Costs $699K – $3.4M (+ 2024 Profits)

Here’s what you need to know if you’re interested in opening a Sonic Drive-In franchise.

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KEY FRANCHISEE INFORMATION

Here are the most important stats to know for franchisees.

NUMBER OF LOCATIONS

3521

INITIAL INVESTMENT

$699,000 – $3,371,000 

ROYALTY FEE

5.00%
revenue

REVENUE PER YEAR

$1,528,000

Sonic Drive-In, an iconic brand in the American fast-food landscape, began its operations in 1953 under the original name “Top Hat Drive-In” in Shawnee, Oklahoma. The founder, Troy Smith Sr., along with his partner Charlie Pappe, transitioned the business into the Sonic brand in 1959, marking the start of its franchising journey.

Today, Sonic is headquartered in Atlanta, Georgia, and operates as a subsidiary of Inspire Brands. Known for its unique drive-in format, Sonic offers customers a nostalgic dining experience where they can order and receive their food without leaving their cars.

This model differentiates Sonic from other fast-food chains primarily focused on traditional dine-in or drive-thru formats. Sonic serves a variety of items, including burgers, hot dogs, chicken sandwiches, and an extensive beverage menu that features many unique drink combinations.

Number of locations

TOTAL UNITS
3521
FRANCHISED UNITS
3195

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Sonic Drive-In

Initial investment

Type of ExpenditureFreestanding Leased Amounts
Initial franchise fee$45,000
Travel and living expenses during training$8,200 – $93,600
Certified Training Team expenses$15,200 – $42,500
Prepaid expenses$2,000 – $125,000
Building costs$800,000 – $1,100,000
Site work$450,000 – $1,200,000
Restaurant equipment$175,000 – $260,000
Point-of-sale system & other technology$105,000 – $160,000
External signage$50,000 – $150,000
Beginning inventory$20,000 – $50,000
Advertising funds$2,000 – $5,000
Insurance premiums$10,000 – $20,000
Payroll$26,800 – $94,800
Additional funds (3 months)$5,000 – $25,000
Total Estimated Initial Investment$1,714,200 – $3,371,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

The Initial Franchise Fee is $45,000, payable at the signing of the Franchise Agreement.

Royalty Fee

The Royalty Fee is 5% of Gross Sales, payable monthly.

Marketing/Advertising Fee

The Advertising Cooperative Fee is 3.25% of Gross Sales for traditional locations and 1.625% for non-traditional locations, payable monthly.

Technology Fee

The Technology Fee is 0.25% of Gross Sales, contributing to the Brand Technology Fund, payable monthly.

Transfer Fees

The Transfer Fee varies: $1,000 for non-control transfers, immediate family transfers, or transfers to a wholly-owned entity, and $3,000 for other types of transfers.

Renewal Fees

The Renewal Fee is 20% of the then-current franchise fee, payable upon signing a new franchise agreement for the renewal term.

revenue

Revenue & Profits

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Sonic Drive-In

Franchise pros and cons

The Pros:

  • Multiple franchise formats: The franchisor has three different franchise formats for franchisees to choose from, such as traditional, non-traditional, and non-driving sonic drive formats. Franchisees have the flexibility to utilize the available real estate opportunities.
  • Exclusive territory protection: The franchise grants its franchisees the right to operate in an exclusive territory. The franchisor does not authorize any other franchise or a competing business in the designated area.
  • Comprehensive training and support: Sonic Drive-In provides its franchisees with a detailed training program of 16 hours of classroom training and 440 hours of on-the-job training. The franchisor prepares them for a successful grand opening, growth strategies, and ongoing operational concepts.
  • Marketing support: The franchise has detailed marketing and branding strategies to help franchisees attract and retain customers. Franchisees can leverage national media and targeted local store promotional campaigns to reach a wider area.
  • Site selection and build-outs: The franchisor has helpful demographic data and in-depth site analytics to help its franchisees in the discovery process and build-out of their ideal restaurants.

The Cons:

  • Not a passive investment opportunity: The franchise does not allow for absentee ownership. Franchisees must be actively involved in the day-to-day operations of their franchises.
  • High staff requirements: The franchisees require at least 25 staff members to launch. This translates to increased staff costs.
  • Not a mobile business: The franchise cannot be run from home or a vehicle. Franchisees must have an office establishment, which means higher startup and ongoing costs.

How to open a sonic drive-in franchise

1: Initial Inquiry and Research

  • Contact Sonic: Reach out to Sonic Drive-In through their franchising website or contact information to express interest.
  • Receive Information: Obtain detailed franchising information, including requirements, costs, and the application process.

2: Application Process

  • Complete Application: Fill out the Sonic Drive-In franchise application, providing personal and financial information.
  • Background Checks: Undergo background checks and a review of your business experience and financial stability.

3: Review Franchise Disclosure Document (FDD)

  • Obtain and Review FDD: Carefully review the Franchise Disclosure Document provided by Sonic Drive-In that details all aspects of the franchise operation.
  • Legal and Financial Advice: Seek guidance from legal and financial advisors to understand the obligations and implications of the franchise agreement.

4: Training and Approval

  • Training Program: Attend the Sonic Drive-In training program, which covers operational procedures, customer service standards, and business management.
  • Site Approval: Work with Sonic Drive-In to find and approve a suitable location for your franchise based on market research and company criteria.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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