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#4 on the Franchise 500: How Sonic Drive-In Uses Artificial Intelligence to Improve Customer Service The #4 company on our Franchise 500 list is learning from its customers -- and serving up exactly what they want.

By Liz Brody

entrepreneur daily

This story appears in the January 2020 issue of Entrepreneur. Subscribe »

Courtesy of Sonic

On November 20, 1953, pilot Scott Crossfield took a Douglas Aircraft Skyrocket up over the dusty California desert, blasting through the sound barrier and setting a world record that helped usher in the space age. That same year, the first Sonic Drive-In opened in Shawnee, Okla. Its slogan: "Service at the Speed of Sound."

Today, nearly seven decades and 3,600 restaurants later, the company is sonically booming in another direction -- ­this time, into the era of machine learning. "We've heard from our guests," says Sonic president Claudia San Pedro. "They still want us to be fast, but they also want their favorite customized food."

So through a partnership with Mastercard, Sonic is piloting an AI-powered car-side menu board that updates its offering in real time based on the customer, weather, and time of day. Fueled in part by the robust analytics Sonic gathers from its new order-ahead app, the restaurant's offerings will grow increasingly personalized, with the goal of creating a tailored experience that's unrivaled in fast food.

But the upward trajectory hasn't been without hiccups. In 2018, Sonic's income rose from $63.7 million to $71.2 million, yet the restaurant saw overall revenue drop. It was then acquired by Inspire Brands in late 2018 for $2.3 billion, meaning it now shares a corporate parent with the likes of Arby's and Buffalo Wild Wings. The new ownership could be a boon to franchisees: System-wide sales are moving upward, and the partnership provided improved access to delivery services like DoorDash and Uber Eats.

Related: 3 Surprising Ways That Video Game Companies Leverage AI

Even as Sonic's menu continues to rotate in creations like deep-fried Oreos à la Mode and Red Bull Slush, the restaurant isn't sitting on its laurels. In August, it announced that it was using a new creative agency, Mother, and it promised to deliver a revamped brand logo in 2020.

So what can we expect? Something Googie? A rocket? A Footlong Coney dressed in a space suit? "It's a little bit of making sure we are grounded in our roots, but with a much more forward-­looking view," says San Pedro. "That's all I'm going to say."

Check out our complete Franchise 500 rankings, or view more stories here.

Liz Brody is a contributing editor at Entrepreneur magazine. 

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