Franchise Deep Dive: Sonic Drive-In Franchise Costs, Fees, Profit and Data

As one of the last surviving old-fashioned drive-in restaurants in America, what is the secret to Sonic’s franchising success?

By Luca Piacentini1851 Franchise Managing Editor

Updated 11:11AM • 05/27/23

LAST UPDATED: May 10, 2023

FRANCHISE WEBSITE: https://sonicfranchising.com/

NUMBER OF LOCATIONS: 3,552

REPORTED COST TO GET IN: $1,768,000 to $3,543,000

REPORTED ROI (Item 19): $1,708,000 (average gross sales of franchise drive-ins)

Sonic Drive-In, also known as Sonic, is a well-recognized burger franchise brand, known for its drive-in format, diverse menu and roller-skating carhops. With a menu featuring hot dogs, burgers, chicken, breakfast items and more, Sonic has captured a significant customer base in the United States. Today, as a franchise opportunity, the brand competes in the fast-food industry against major players like McDonald's, Burger King and Wendy's.

How Many Sonic Locations Are There?

In 1953, Troy Smith Sr. established the Top Hat Drive-In in Shawnee, Oklahoma, which eventually became the first Sonic Drive-In. While traveling in Louisiana, Smith saw a drive-in that used speakers for ordering. He soon came up with a similar system and sales immediately tripled.

In the 1970s, the company finally implemented a proper franchising system and standardized the way restaurants were operated. Sonic’s growth continued, and by the early 2000s, there were 3,500 restaurants around the United States. In 2018, Atlanta-based Inspire Brands, owner of Arby’s and Buffalo Wild Wings, acquired Sonic for $2.3 billion. Today, Sonic has 3,552 restaurants across 46 states, most of which are franchised. The franchise was ranked No. 42 on Entrepreneur’s 2023 Franchise 500 list and peaked at No. 3 in 2019.

What Is the Sonic Business Model?

Sonic restaurants are typically freestanding drive-ins, where customers park in a covered drive-in stall, order through an intercom speaker system and have their food delivered by a carhop. Most Sonic drive-in locations come with 25 parking stalls. Thus, customers don't have to worry about beating rush hour traffic and restaurants don't need to worry about turning too many people away, even when their stores are popular.

Franchisees can choose, however, from three different types of Sonic restaurants:

A traditional Sonic drive-in location is usually a freestanding, one-story building with various surrounding parking stalls. This may include some indoor seating depending on franchisor discretion and Sonic locations. A Sonic Drive-In generally employs about 25 individuals, including full-time and part-time workers. Management staff consists of the manager and two assistant managers.
A non-driving location. This can be a permanent or temporary Sonic restaurant facility without freestanding buildings or drive-in canopies.
A nontraditional location, which is any permanent or temporary food service facility with some or all of the Sonic brand menu items.

The menu features a variety of fast food items, including burgers, hot dogs, chicken and breakfast items. Sonic also has a large beverage and dessert menu.

How Much Can Sonic Franchise Owners Make?

Sonic’s 2022 FDD and Item 19 includes financial information from Sonic’s 2021 fiscal year, which is the period from January 4, 2021 until January 2, 2022; from Sonic’s 2020 fiscal year, which is the period from December 30, 2019 until January 3, 2021; and from the 2017, 2018, and 2019 calendar years (from January 1 until December 31 of each year).

2021 Fiscal Year – Average Gross Sales

Company Drive-Ins (271 restaurants): $1,374,000
Franchise Drive-Ins (3,184 restaurants): $1,708,000
Total of Company Drive-Ins and Franchise Drive-Ins (3,455 restaurants): $1,681,000

2020 Fiscal Year – Average Gross Sales

Company Drive-Ins (267 restaurants): $1,346,000
Franchise Drive-Ins (3,200 restaurants): $1,633,000
Total of Company Drive-Ins and Franchise Drive-Ins (3,467 restaurants): $1,611,000

2019 Calendar Year – Average Gross Sales

Company Drive-Ins (169 restaurants): $1,272,000
Franchise Drive-Ins (3,154 restaurants): $1,345,000
Total of Company Drive-Ins and Franchise Drive-Ins (3,323 restaurants): $1,341,000

2018 Calendar Year – Average Gross Sales

Company Drive-Ins (170 restaurants): $1,204,000
Franchise Drive-Ins (3,316 restaurants): $1,268,000
Total of Company Drive-Ins and Franchise Drive-Ins (3,486 restaurants): $1,265,000

2017 Calendar Year – Average Gross Sales

Company Drive-Ins (224 restaurants): $1,147,000
Franchise Drive-Ins (3,237 restaurants): $1,256,000
Total of Company Drive-Ins and Franchise Drive-Ins (3,461 restaurants): $1,249,000

How Much Does It Cost to Open a Sonic?

The estimated total investment necessary to begin the operation of a Sonic Drive-In franchise, based on Item 7 of the company’s 2022 FDD, is as follows:

Initial License Fee: $45,000
Travel and Living Expenses During Training: $5,000 to $53,500
Franchisee Certified Training Team Expenses: $48,000 to $72,000
Prepaid Expenses: $2,000 to $250,000
Real Property/Occupancy Charge: variable
Building Costs: $800,000 to $1,100,000
Site Work: $450,000 to $1,200,000
Indoor Seating: $0
Restaurant Equipment: $175,000 to $260,000
Point-of-Sale System (“POS”), Digital Menu Housings (“POPS”) and Other Technology: $100,000 to $175,000
External Signage: $50,000 to $150,000
Beginning Inventory: $20,000 to $50,000
Advertising Funds: $2,000 to $5,000
Insurance Premiums: $10,000 to $20,000
Payroll: $56,000 to $137,500
Additional Funds (3 months): $5,000 to $25,000
Total Estimated Sonic Drive-In Franchise Costs (excluding free-standing real estate costs): $1,768,000 to $3,543,000

What Is the Franchise Fee for Sonic?

Sonic Drive-In’s initial franchise fee, royalty fee and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

Initial License Fee: $45,000
Royalty Fee: 5% of Gross Sales for Traditional Restaurants; 4% of Gross Sales for Non-Traditional Restaurants
Brand Fee: 0.90% of Gross Sales
Advertising Cooperative Fee: 3.25% of Gross Sales for Traditional Restaurants; 1.85% of Gross Sales for Non-Traditional Restaurants

The brand recently rolled out a new development incentive. Opening your first store in 2023 will get you 0% royalty for the first 12 months for New and Developing Markets and 1% royalty for the first 12 months for Core Markets, with additional royalty discounts throughout the 3rd year. All new openings through 2025 will receive $30,000 of the $45,000 Initial License Fee credited via royalty.

Who Is the Leadership of Sonic?

What Helpful Articles Can I Read to Learn More About Sonic?

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Franchise Deep Dive: Sonic Drive-In Franchise Costs, Fees, Profit and Data

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