Analysis of Sonic Corporation Essay -- Sonic Corporation Fast Food Ess

Analysis of Sonic Corporation In 1953 Sonic Corporation was founded by Tony Smith in Shawnee, Oklahoma under a different name of the Top Hat. Tony Smith started the company as a drive-in restaurant featuring hot dogs, hamburgers, and french-fried onion rings. In the mid-50s Smith was asked by Charles Pappe for assistance in establishing a similar restaurant in a rural town also located in Oklahoma. This was the beginning of a partnership between the two men . CURRENT INFORMATION In 1991 Sonic Corporation was the fifth largest chain in the fast-food industry, servicing in the hamburger segment, behind McDonald's, Burger King, Hardee's, and Wendy's. Sonic has and is still carrying the tradition of being a high-quality franchise-based organization in the Sunbelt states. The following case will be broke down into five different stages beginning with early strategies, problems, new strategies, a ratio analysis, and a recommendation. EARLY STRATEGIES UNDER TONY SMITH Tony Smith introduced the Top Hat as a drive-in restaurant that reduced start up cost by not having eat-in space. This new restaurant featured drive-in stalls for automobiles, that were equipped with a two-way intercom enabling customers to order as soon as they drove in, opposed to conventional practices of waiting for a carhop to take an order. Delivery of the fresh fast-quality products was do to the unique design of the kitchen, and the use of carhops. Sonic Corporation preferred to do things as easy as possible and avoid sophistication. Another strategy Smith implemented was a collection of franchise royalties. This was done in a way such that Sonic franchise holders were required to purchase printed bags at an additional fee that Smith arranged through a paper-goods supplier. Pyramid-type selling arrangements were formed by franchisees in money making efforts by starting other franchises through friends. This lead to original store managers having a percentage of their own store earnings and a portion of the new operation of the recruited friend manager. This idea further developed to multi-ownership of almost all Sonic operations as store managers were also part owners. This concept of pyramid-type selling carried Sonic forward with rapid growth. PROBLEMS RAPID GROWTH In the later-70's almost one new Sonic store... ...the past year. This ratio also measures the risk that a company has in financing its debt. RESEARCH IN 1992 Research in 1992 shows that Sonics typical customer is female between the age of 18-24 with an average income between $10,000-$15,000. Forty-six percent of Sonics business was done during lunch hours, and 44 percent done during supper. Sonic's average meal price was $2.25. CONCLUSION AND RECOMMENDATION Sonic Corporation is an ever improving company that is striving for efficiency, freshness, and quality. Over the life of the company management has always been trying to increase profits and taking steps into the future. Sonic Corporation also learned that in maximizing profits one must incorporate all the ingredients from attitudes of the mangers and owners to the products they offer their customers. In looking at the ratio's Sonic Corporation is looking stronger every year. I would recommend to keep management minds striving to new and better innovations that could again revolutionize the company as it had under the leadership of Mr. Lynn. In doing so the company assure itself and ever lasting life in the fast-food drive-in industry.