Sonic Drive-In

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Sonic Corporation

Type	Public (NASDAQ: SONC)
Founded	1945 (Shawnee, Oklahoma)
Founder(s)	Troy Smith
Headquarters	Oklahoma City, Oklahoma, USA
Number of locations	3511
Key people	J. Clifford Hudson Chairman, CEO and president, W. Scott McLain president SONIC Industries (franchising sub), Eddie Saroch president SONIC Restaurants, Inc. (operating subsidiary)
Industry	Restaurants
Products	Fast food
Revenue	▲$805 Million USD (2008)
Net income	▲$60 Million USD (2008)
Employees	357 Corporate employees
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 recreates the drive-in diner feel of the 1950s, complete with carhops who sometimes wear roller skates. There were 3,500 restaurants in 38 U.S. states, plus one in Mexico, as of February 29, 2009.^[1]

Contents 1 History 1.1 1950s 1.2 1960s and '70s 1.3 1980s 1.4 1990s 1.5 2000s 2 Menu items 2.1 Food 2.2 Drinks 3 Advertising 3.1 1970s 3.2 1980s 3.3 1990s 3.4 2000s 4 References 5 External links

[edit] History

[edit] 1950s

Troy N. Smith, Sr. opened a restaurant that would become the first Sonic Drive-In at Stillwater, Oklahoma in 1953. Smith's original plan was to tear down the existing small walk up root beer stand, called the "Top Hat", and open a steakhouse in the log cabin that was on the site. After realizing that the stand was averaging $700.00 a week in the sale of root beer, hamburgers and hot dogs Smith decided to keep the stand open and never continued on the planned steakhouse.

Originally at the Top Hat customers would park anywhere on the gravel lot and walk up to place their orders. However, on a trip to Louisiana, Smith saw a drive-in that utilized speakers for ordering. He realized that he could increase his sales if he could control the parking and have the customers order from speakers at their cars. Carhops would then deliver the food to the customers. Smith borrowed several cars from a friend who owned a used car lot to establish a layout for controlled parking. He also had some so called "jukebox boys" come in and wire an intercom system in the parking lot. Sales tripled immediately and his little root beer stand was a huge success. Entrepreneur Charles Woodrow Pappe stopped by chance at the Stillwater 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 and Shawnee, Oklahoma. Upon learning that the Top Hat name was already trademarked, Troy Smith and Charles Pappe changed the name to Sonic. The new name worked with their existing slogan "Service with the Speed of Sound". After the name change, the first Sonic sign was installed at the former Top-Hat Drive-In Stillwater, Oklahoma. This location has been considered to be the first Sonic Drive-In, and the original sign can still be seen in Stillwater. While Smith and Pappe were being asked to help open new franchise locations, however, there was no royalty plan in place. The pair decided to have their paper company charge an extra penny for each Sonic label hamburger bag they sold. The proceeds were to split half for Smith and half for Pappe. The first franchise contracts under this plan were drawn up by Smith's landlord O.K. Winterringer, who was also a lawyer. At the time, there was no joint marketing plan or standardized menu and few operating requirements.

[edit] 1960s and '70s

Sonic's founders formed Sonic Supply as a supply and distribution division in the 1960s. Under Troy Smith, Marvin Jirous and Matt Kinslow (longtime franchise holders) were brought in to run the Sonic Supply division. In 1973, Sonic Supply was restructured as a franchise company that was briefly named Sonic Systems of America which sold franchisees equipment, building plans and provided some basic operational instruction.^[2]

As Sonic grew into a regionally known operation in the 1960s and 1970s, they were located mainly in small towns in Oklahoma, Texas, Kansas, New Mexico, Missouri, and Arkansas. In 1967, the year of Charles Pappe's death, there were 41 Sonic locations.^[2] The number continued to grow, and by 1972 there were 165 locations. Between 1973 and 1978 Sonic opened more than 800 locations in 13 states. In 1977, the Sonic School for manager training was established under Jim Winterringer's guidance. Most of the drive-ins were operated by franchisees who often made the store manager a business partner which is still often the case today.^[3][4]

During the 1960s and 1970s, Sonic had no strict standardized procedures or recipes in place for their franchisees.^{[citation needed]} Franchisees or franchise groups often developed their own recipes for different menu items or regional specialties. These variations hampered Sonic's growth during this period, which sometimes led to disagreements between franchise groups over menus, pricing, coupons and advertising.^{[citation needed]} As a franchiser, Sonic did not inspect or monitor its franchisees' operations. Customers never knew what to expect in terms of menu, quality and service. Sonic's future growth was in doubt, and by the 1980s the company was losing money.^[5]

[edit] 1980s

In 1983, Smith and the Board of Directors saw the need for a change. C. Stephen Lynn was brought in as President, and in 1984 he hired 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.^{[citation needed]} Joint advertising brought significant sales growth, and this growth helped franchisees see the benefits of cooperation. Sonic Industries developed a new franchise agreement that required higher royalties and marketing expenditures.^{[citation needed]} There was reluctance to accept these changes by some franchisees, however, 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 had a major impact.^{[citation needed]} In 1985, the Sonic Management School was re-established and taught for the next 10 years by Doyle Paden, Dona Grigsby, and Carl Rose. The school stressed the importance of standardized procedures, sanitation and employee training. Drive-ins were inspected and "mystery-shopped". New franchises began to expand the company to new areas and redevelop markets that had been unsuccessful in the past. A "Speed of Service" system was developed under Wallace Hite which reduced the standard order time from seven minutes to under three minutes.^{[citation needed]} These developments combined with the advertising campaign featuring Frankie Avalon led to significant growth and a new image that would make Sonic a nationally-recognized name. 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.

In 1986, C. Stephen Lynn, with a group of investors, performed a leveraged, $10 million buyout and took the company private. 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. Also in 1987, Sonic opened its 1,000th restaurant. Sonic moved again to better facilities at 101 Park Avenue in a project led by then CFO Ray Fain. Pattye Moore became the new VP of Marketing.

[edit] 1990s

Sonic became a publicly traded company again in 1991, and in 1994 the corporation had finished renegoiating the franchise agreements with its franchisees.^[6] In 1995 J. Clifford Hudson^[7] had taken over the reins as President and CEO, and Sonic Industries became Sonic Corporation. During the mid-1990s, Sonic was opening 100 - 150 new restaurants a year. Beginning in 1998, Sonic began to redesign and update all 1,750 stores in their chain with what was called a "Retro-future" look.^[4]

[edit] 2000s

J. Clifford Hudson was named chairman of Sonic Corp. in January 2000. ^[8] The company moved into its new headquarters building in the Bricktown district of Oklahoma City.

[edit] Menu items

[edit] Food

In the 1960s, Sonic meals were traditionally accompanied by a peppermint candy and small colored plastic animals called zoo-picks hanging on the side of drink cups^[9] until they were outlawed by consumer product safety laws as a choking hazard.^{[citation needed]} The traditional peppermint candy is still served with Sonic meals today.

Sonic has featured unique menu items like hand-made Onion Rings and Pickle-Os (breaded deep-fried dill pickle slices) as well as such drive-in staples as hamburgers, Coneys (hot dogs covered with chili and shredded cheese) and corn dogs, shakes and malts. During its early years, some Sonic franchise locations also featured regional items on their menu. Other notable menu items include Ched 'R' Peppers (a form of the popper) and tater tots. Dessert frozen treats such as Oreo/M&M's/Reese's/Butterfinger Blasts are also available. Sonic also offers Jalapeño Tater Tots as a option as your side in your combo meal.

[edit] Drinks

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 colored coconut flavoring added) or Limeades (Sprite with lime or other flavors added). Sonic uses the slogan as "Your Ultimate Drink Stop" due to the 168,894 possible drink combinations. Its advertising also states that "You could have a new drink every day for the next 462 years". The true number of possible combinations is higher.^[10]

[edit] Advertising

[edit] 1970s

In 1977, Sonic ran its first television commercial.^[11]

[edit] 1980s

In the 1980s, many Sonic Drive-Ins displayed signs with the slogan "Happy Eating". Also, during the early 1980s, Happy Days actor Tom Bosley was featured in Sonic's television advertisements.^[12] One of Sonic's most memorable television ad campaigns featured 1950s icon Frankie Avalon which ran from 1987 to 1993.^[13]

[edit] 1990s

In May 1999 Sonic began a new advertising campaign featuring the character Katie the Carhop.^[14]

[edit] 2000s

Sonic is also involved in NASCAR. Sonic signed on with Richard Childress Racing in late 2000 to be an associate sponsor for Dale Earnhardt, Sr. during the 2001 race season. Earnhardt was killed in the first race of the 2001 season, the Daytona 500, and Sonic continued sponsorship for Kevin Harvick, Childress's new driver of Earnhardt's car, through the end of the 2003 season.

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.

The newest tagline is "Sonic is even sweeter after dark." This refers to the fact that some locations now close at midnight or later.

Improv 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. Similar series of commercials also ran featuring other duos of improv performers (Molly Erdman and Brian Huskey, and Katie Rich and Sayjal Joshi).

[edit] References

[edit] External links

• Official website
• Slush44 - Sonic's teen oriented web site

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