How Sonic Drive-In Prepared for Natural Disasters -- and Then Thrived Despite 2017's Hurricanes
Sonic’s signature drive-in model seemed to be a liability in 2017, when Hurricane Harvey damaged or closed many of its 950-plus restaurants in Texas and pushed same-store sales down 3.3 percent in the final fiscal quarter. But the company was more than prepared to handle the challenge. “One of the beautiful things about our system is that we have a disaster-relief fund that our franchises contribute to,” says senior VP of franchise relations Eddie Saroch. “So the recovery effort is faster and better than most. The fact that we work together as a team to get stores back up and running means that the business regains momentum fast.”
Sonic’s sales prove that out: Despite the natural disasters, its per-share net income increased for the entire fiscal year from $1.29 in 2016 to $1.45 in 2017. And Saroch’s 2018 forecast calls for more optimism. The chain recently cracked its all-time high of more than 3,200 franchises, and is planning big growth around Washington, D.C.; New York; the Ohio River Valley; Alabama; Virginia; and Washington state. (Sonic intends to focus on domestic growth before going global.)
To win new consumers, Sonic is sticking to what works. It continues to use its distinctive “two guys” ad campaign, which features two improv comedians in a car yammering about fast food. And the brand’s message is summarized by a handy acronym: BLADE, meaning the best time to eat at Sonic is breakfast, lunch, afternoon, dinner and evening. (In other words, any time.) Sonic is enhancing its time-tested strategy, though. It recently appointed new marketing leadership to increase media reach and work on technological enhancements like a mobile pay app and a preorder feature to speed up service.
But above all else, Saroch says, Sonic’s strength is its partners -- particularly longtime franchisees who embrace innovation, balanced by old-fashioned experience. The winner of its 2017 outstanding franchisee award typifies this, he says. It was a second-generation Sonic owner who started working as a cook for his father in 1969, when he was 14 years old. “Building a family business, staying in the brand for a long time,” Saroch says, is what Sonic is all about.
For more on franchises, check out 2018's Franchise 500 list.