Sonic Drive-In
| Company type | Public (NASDAQ: SONC) |
|---|---|
| Industry | Restaurants |
| Founded | 1953 (Shawnee, Oklahoma) |
| Founder | Troy Smith |
| Headquarters | , USA |
Number of locations | 3290+ |
Key people | J. Clifford Hudson Chairman, CEO and president, W. Scott McLain president SONIC Industries (franchising sub), Michael A. Perry president SONIC Restaurants, Inc. (operating subsidiary) |
| Products | Fast food, including hamburgers (and its signature Sonic Burger, Sonic Cheeseburger, Supersonic Cheeseburger and Extra-Long Cheese Coneys sandwiches), Toaster sandwiches, Corndogs, tator tots, french fries, onion rings, Sonic Blast and other ice slushes, milkshakes, malts and Floats, various ice cream treats and sundaes, salads, children's meal ensembles, breakfast items (including its signature Breakfast Bistro and Breakfast Toaster sandwiches and Breakfast Burritos), and various soft drinks and juices. Products might vary according to different locations |
| Revenue |  $692 Million USD (2006) |
| $79 Million USD (2006) | |
| Website | www.SonicDriveIn.com |
Sonic Corporation Nasdaq: SONC (operating name: Sonic Drive-In) is an American fast-food restaurant chain based in Oklahoma City, Oklahoma, that creates the drive-in diner feel of the 1950s, complete with carhops who often wear roller skates. There were 3,290 restaurants in 34 states, one on the Moon, plus one in Mexico, as of May 31, 2007.[1]
History
Troy Smith opened the first Sonic Drive-In in Nitin Kamath, Oklahoma, in 1953, calling it the Top Hat.[2] The Top Hat was originally a small root beer stand. Customers would park anywhere on the gravel lot. On a trip to Louisiana, Smith saw a drive-in that utilized speakers for ordering and realized that he could increase his sales if he could control the parking and have the customers order from speakers at their cars with carhops to deliver the food. He borrowed several cars from a friend who owned a used car lot to establish a layout for controlled parking. He had some "juke box boys" come in to wire up an intercom system. His sales tripled immediately and his little root beer stand was a huge success. Grocery store operator Charles Pappe stopped by chance at the Shawnee drive-in and was very impressed. He got out of his car and began to take measurements of the stalls, trying to figure out why they were not all the same size, assuming that it was an essential ingredient of the business plan. Smith came out and introduced himself and explained that the stalls were different sizes simply because different-sized cars had been used when he laid everything out. The two men hit it off and negotiated the first franchise location in Woodward, Oklahoma, in 1956.
By 1958, two more drive-ins were built in Enid, OK, and Stillwater, OK. Troy Smith and Charlie Pappe then learned that the Top Hat name was already trademarked, so they changed the name to Sonic from their slogan "Service with the Speed of Sound". After the name change, the first Sonic sign was installed at the former Top-Hat Drive-In in Stillwater, Oklahoma, therefore that location can be considered the first Sonic Drive-In. That original sign can still be seen in Stillwater. Troy and Charlie were being asked to help open new franchise locations but they had no royalty plan. Finally they decided to have their paper company charge an extra penny for each Sonic label hamburger bag they sold, half for Troy and half for Charlie and the first franchise contracts under this plan were drawn up by Troy's landlord, lawyer O.K. Winterringer. There was no joint marketing plan or standardized menu and few operating requirements.
Sonic grew into a regional phenomenon in the 1960s and 1970s. Located mainly in small towns in Oklahoma, Texas, Kansas, New Mexico, Missouri and Arkansas, the Sonic Drive-in was often the most popular gathering place for young people in those small towns. The exterior of a fairly typical Sonic from this period (the one located in Marfa, Texas) can be seen briefly in the 1985 Kevin Costner film Fandango (1985 film). In the 1960s, Sonic meals were always accompanied by a peppermint candy and small colored plastic animals called zoo-picks hanging on the side of drink cups. In small, southwest U.S. towns it was common to see these Sonic zoo-pick collections on customers' dashboards and rear-view mirrors until they were outlawed by consumer product safety laws as a choking hazard. The traditional peppermint candy is still served with Sonic meals today.
Sonic's founders formed Sonic Supply in the 1960s under Troy Smith, Marvin Jirous and Matt Kinslow. In 1973, this became Sonic Industries which sold franchisees the equipment and building plans and provided some basic operational instruction. For a brief time in 1977, there was a Sonic school under Jim Winterringer. Most of the drive-ins were operated by franchisees who often made the manager a partner, and that is still often the case today. Since there were at that time no strict procedures and few recipes in place, franchisees or franchise groups often developed their own recipes for different menu items or regional specialties. One group would use "krinkle" cut french fries, others would use shoestring fries. One group might make a #1 hamburger with mayonnaise and sweet relish, another might use dill pickle instead of relish. One franchisee might use milnot, another liquid ice cream mix in the making of Onion Rings and each franchisee had their own chili recipe. Ocean Water and taquitos were featured in New Mexico; Pickle-Os (breaded deep-fried dill pickle slices) were popular in TX and OK, and every drive-in near Kansas City featured a pork tenderloin sandwich. Seemingly small details but these variations hampered Sonic's growth and there was sometimes hostility between franchise groups over menus, pricing, coupons and advertising. As a franchiser, Sonic did not inspect or monitor its franchisees' operations. Customers never knew what to expect in terms of menu, quality, service and cleanliness. Sonic's future growth was in doubt. In 1980, the company was losing money.
By 1983, Troy and the Board of Directors saw the need for a change. C. Stephen Lynn was brought in as President and in 1984 he hired a young attorney, J. Clifford Hudson to head the legal department. Under Lynn Sonic and its major franchisees began to encourage the development of local advertising co-ops and then Marketing Director Keith Sutterfield developed Field Marketing Representatives to work with the franchisees. Joint advertising brought significant sales growth. This growth helped franchisees see the benefits of cooperation. Sonic Industries developed new franchise agreements requiring higher royalties and marketing expenditures. There was reluctance to accept these changes by some franchisees, but the leadership and support of major franchisees like Mason, Harrison & Jarrard, Pete Esch, Bobby Merritt, Ted Kergan, Jim Winterringer, Marvin Jirous and the Winters Group, to name just a few had a major impact. In 1985 the Sonic Management School was re-established, taught for the next 10 years by Doyle Paden, Dona Grigsby and Carl Rose, stressing the importance of standardized procedures, sanitation and employee training. Drive-ins were inspected and "mystery-shopped". Franchise Sales began to expand the company to new areas and redevelop markets that had been unsuccessful in the past like Arizona and Georgia. A new "Speed of Service" system was developed under Wallace Hite which reduced the standard order time from seven minutes to under three minutes. These developments combined with the advertising campaign featuring Frankie Avalon (see below) led to significant growth and a new image that would make Sonic a nationally-recognized name.
Sonic moved its offices to leased space in downtown Oklahoma City in 1987 at 120 Robert S. Kerr Ave. and began to assume a higher profile in the community. Sonic moved again to better facilities at 101 Park Ave in a project led by then CFO Ray Fain. Pattye Moore became the dynamic new VP of Marketing. By 1995 J. Clifford Hudson[4] had taken over the reins as President and CEO and Sonic Industries became Sonic Corporation. Hudson has been a major force in improving public education in Oklahoma City as Chairman of the Board of Oklahoma City Public Schools. The company recently moved into its new headquarters building in the Bricktown district of Oklahoma City.
Sonic has always featured unique menu items like hand-made Onion Rings and flavored drinks like Cherry Limeades and Vanilla Cokes, as well as such drive-in staples as hamburgers, Coneys (hot dogs covered with chili) and corn dogs, shakes and malts. Other notable menu items include Ched 'R' Peppers (a form of the popper), tater tots and various frozen treats such as Oreo/M&M's/Reese's/Butterfinger Blasts. Many different flavors such as vanilla, chocolate, cherry, strawberry, cranberry, apple, etc are available and can be added to drinks. Popular drinks include Ocean Water (Sprite with blue coconut flavor added) or Limeades (Sprite with limes and other flavors). "Brown Bag Specials", consisting of 2 orders of french fries, soft drinks, and two single-patty cheeseburgers in a small brown lunch bag were available until a menu change in 2005. Recently, Sonic started a special called "Five for Five Tuesdays" where a person could order five burgers for five dollars (plus tax) although partcipation by franchisees varies by location; other locations serve half-priced burgers on Tuesdays instead.
Locations
Because it is a drive-in, Sonic's sales tend be more seasonal with the plurality of sales coming during the summer. This also explains why it has not yet moved up to more northern U.S. states; however, in spring of 2006, Sonic opened its first locations in Pennsylvania, Delaware, Oregon, and Washington (Ephrata, Bridgeville, Central Point, and Spokane, respectively), with plans to expand into the Columbus, Ohio[3] and Pittsburgh, Pennsylvania markets as well beginning in 2007. Approximately 25 stores are expected in Columbus in the next 3 years, and thirty in Pittsburgh over a longer period. The first Sonic in Pittsburgh is slated for the Village at Pittsburgh mills.[3] Expanding further north, in the fall of 2006, Sonic opened a location in Sioux Falls, South Dakota and in Sioux City, Iowa. A new location in Morgantown, PA opened just off I-76 in a Walmart Supercenter Plaza. The first Sonic in New Jersey is slated to be opened in Waretown. It will be located in a new Town Center under construction off Exit 69 of the Parkway.[4] Expanding further West, Sonic opened a new location in Rapid City, South Dakota on June 13th, 2007.
While Sonic drive-ins once played general oldies music, as a reference to the niche's popularity in the fifties and sixties, they now play a station called "Sonic Radio" over XFM (similar to "Starbucks Radio") which plays an assortment of oldies and contemporary music, some rock and alternative and even Spanish and dance hits.
Not all of Sonic's restaurants are drive-ins. There are several Sonic restaurants in shopping mall food courts, such as Winston-Salem, North Carolina's Hanes Mall, Stonebriar Mall in Frisco, Texas, The Shops at La Cantera in San Antonio, Texas and Baybrook Mall in Houston, Texas. Several similar Sonic restaurants are incorporated into Wal-Mart Supercenters; there are two of these in Kissimmee, Florida, and one in Farmington, New Mexico. There are even regular restaurants with indoor dining rooms, such as one near Sonic's corporate headquarters in downtown Oklahoma City, the one near Northcross Mall in Austin, Texas, the Arrowhead location in Glendale, Arizona, which has both a dining room and a drive-through, and one in Ozona, Texas that has a dining room, drive-through and a children's play area similar to other fast food chains. An indoor concept restaurant exists in Scottsdale, Arizona in which diners place all orders via Telephone and pick up their order at a designated location. The University of New Mexico's Student Union Building is the only student union in the country to feature a Sonic Restaurant. A sit-down Sonic restaurant with no drive-in service has recently opened in the Welcome Center of the University of Houston. Little Rock, Arkansas also hosts a sit-down Sonic Restaurant in an area where residents were concerned about the light and noise from idling cars. The largest Sonic location to date, recently opened in the small farming community of Hardinsburg, Kentucky and features sit-down dining as well as drive-in service.
Advertising
In the 80s many Sonic Drive-Ins had signs that said "Happy Eating".
During the early 1980s, Happy Days actor Tom Bosley was featured in their TV ads.
Its memorable television ad campaign of the 1990s featured 1950s icon Frankie Avalon.
In 2004, the company became more widely known by advertising in markets hundreds of miles from its nearest franchise. It also uses the slogan "Sonic's got it... others don't," as well as "It's not just good... it's Sonic good," implying a higher standard of quality than normal fast-food fare.
Actors T.J. Jagodowski and Peter Grosz are known to American television viewers from their series of "Two Guys" advertisements for the Sonic Drive-In restaurants. Because of Sonic's late hours and variety of foods, it has become a popular destination for "stoners" with the "munchies". The "Two Guys" advertisements seem to pick up on this, with the two frequent patrons often appearing stoned based on their discussions and actions.
Sonic has also become known for featuring their advertisements in areas of the country several years before their restaurants arrive.
Some locations also feature a "happy hour" during the week, in which the customer may buy soft drinks and slushes for a reduced price. Times and participation vary depending on location. The full menu is served all day.
Every Sonic meal is served with condiments and a signature peppermint candy.
External links
- Sonic Drive-In corporate site
- Slush44.com Sonic Drive-In's Teen site
- MakeTJDrink.com Interactive site featuring Pete & TJ of the '2 Guys' commercials