Sonic Drive In Booms
It's been nearly 25 years since Chuck Harrison's neighbor, Ralph Mason, approached him about partnering to buy franchises from Sonic Drive In Restaurants (No. 7 in our 2001 Franchise 500®). With partner Gary Jarrard, the neighbors formed Oklahoma City-based Mason Harrison Jarrard Enterprises to do just that. Today, they've franchised nearly 300 Sonics with multiunit partners in Arizona, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee and Texas.
We recently spoke with Harrison about how franchising has changed over the past quarter of a century and the reasons for Sonic's upward climb through the ranks of Entrepreneur's Franchise 500�.
Franchise Zone: You've been doing business with Sonic Drive In for almost 25 years now. Why have you stayed with them for so long?
Chuck Harrison: It was a small company-200 stores in the chain-when we joined, and there are [about] 2,200 stores now. So obviously we've been a part of a real strong franchise group that has grown over the years. We've not found anything that would be as good to us financially or be the growth vehicle that Sonic has been for us. And the brand continues to get better and better. Everything has been positive. We have a few other investments, but our main business is Sonic.
FZ: How has your role as a franchisee changed since you first joined the company?
Harrison: [As the system has grown,] the franchisor has been a real help to all franchisees in every area of the business-purchasing, marketing, advertising, operations. In the early days, Sonic didn't have a lot of input at the franchisee level, but that's changed: I've been on a franchisee advisory council for 20-plus years. They want input from the franchise community, they listen to what we want, and they give us help and feedback to make sure everybody's on the same page.
FZ: How have franchisee-franchisor relations changed?
Harrison: We've worked well together as the chain has grown. Periodically the franchisee community and Sonic agree on how to [change the appearance] of the buildings. [The input from employees and franchisees has led to a cleaner, fresher look that is attractive to customers.] That helps us compete in the marketplace.
With 200 stores, you have to do a lot more, but with 2,200 stores, you have a lot more people to deal with, from quarterly meetings around the country and annual conventions to new operations manuals that the franchisor and the franchisees have worked together to create. The corporate office and the franchise community have grown together vs. one pulling or pushing the other.
FZ: Have you found that new franchisees look to you as a mentor?
Harrison: Yes, especially within our group. Again, I'm on the franchise advisory board and my partner, Gary, is on many of the legal, construction and insurance boards for Sonic, so we try to help new franchisees understand the Sonic culture and what has been successful. Likewise, Sonic sends some [prospective franchisees] to us; we get quite a few calls and/or visits from people [interested in buying into the franchise]. They ask us questions about what it's like to be a franchisee. People want to hear that from somebody who's doing it vs. the corporation that's selling it.
FZ: Do you enjoy that interaction?
Harrison: We do. When you've been in the business for 25 years, and it's been a good living for you and you've seen it grow from not very much to quite a bit and with a big future in front of it, you can tell new franchisees about what it takes to be successful and the path you've taken. And it's important to us that a new franchisee is successful, because the sign in front of his building is the same sign in front of our building. A bad Sonic hurts us and a good Sonic helps us.
FZ: What are some common questions new franchisees ask?
Harrison: Most of them today are coming into new areas for Sonic, to the eastern and western United States as well as in the north. Currently, the Sonic belt is centered around the central United States, and they ask "How have you been accepted in new markets? What are the start-up problems regarding sales, people, training? When you're not near a lot of other Sonics to get [support], what mistakes have you made? What would you do differently?" And many ask what kind of help [they should] expect from Sonic corporate.
FZ: What are some common misconceptions new franchisees have about franchising in general and Sonic in particular?
Harrison: Many of them think that because Sonic corporate is doing well and the franchise group is doing well, you can just walk in the door and immediately start doing well. You do well because you've probably struggled and learned to do things right [the hard way]. We just try to be honest with them about the natural problems you [encounter], such as the land cost problems in new markets. Certainly your fixed cost will change some if you don't stay aware of that. The [labor market] situation is also a struggle, and we talk about how we try to hire, retain and train.
FZ: This is the second year Sonic has been in the top 10 of our Franchise 500�. Why do you think the company is growing so much now?
Harrison: That's mostly due to the geographical expansion. The increased advertising has shown people the uniqueness of our menu, our products and our service. The success of its franchisees has put Sonic [the franchisor] on the map. We had the first Sonic with $2 million annual net sales last year, and people see that from the outside and think "I want me one of those." Our variety of products, our fountain favorites, our foot-long cheese Coneys, our onion rings, the special ice, special cups, all those things added together have done it. Music, roller skating, car hops-we used to do those things years ago, kind of got away from it and now have brought them back. Everybody's got hamburgers; everybody's got french fries. We try to do things that make us stand out from our competition.
FZ: What are some of your future goals with Sonic?
Harrison: We have lots of young partners. They haven't been in [the system for] 25 years and they don't have 300 stores, but lots of them want growth, the ability to have more locations. We'll try to take the present businesses and make them better, which will make everyone more money. We'll continue to add stores in existing markets and look for new markets where we can add Sonics. New areas are a lot harder to [expand in] because the name is not as well-known and the advertising hasn't been there. But as we slowly and surely spread into new markets, we'll build name recognition over time.