About Sonic Drive-In Franchise
Sonic Drive-In is an iconic American quick service restaurant franchise known for its carhop service, extensive drink menu featuring cherry limeades and slushes, and a diverse food menu of burgers, chicken, hot dogs, onion rings, tater tots, ice cream desserts, and breakfast items.
The franchise fee is $45,000, and the brand has been franchising since 1974 under the Inspire Brands, Inc.
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Sonic Drive-In Franchise Cost & Fees
Minimum Investment
$349K
Average Investment
$1.9M
Maximum Investment
$3.5M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $45,000 | One-time payment upon signing |
| Royalty Fee | 5.0% (Maximum) of Gross Sales (Traditional) or 4% of Gross Sales (Non-Traditional) of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 3.25% (Minimum) of Gross Sales (Traditional) or 1.85% of Gross Sales (Non-Traditional) | National brand fund |
| Total Investment Range | $348,500 – $3,543,000 | Includes build-out, inventory, working capital |
The investment range of $349K–$3.5M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5.0% (Maximum) of Gross Sales (Traditional) or 4% of Gross Sales (Non-Traditional)) and marketing fee (3.25% (Minimum) of Gross Sales (Traditional) or 1.85% of Gross Sales (Non-Traditional)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial license fee | $45,000 | $45,000 |
| Travel and living expenses during training | $5,000 | $53,500 |
| Franchisee Certified Training Team expenses | $48,000 | $72,000 |
| Prepaid expenses | $2,000 | $250,000 |
| Real property/occupancy charge | $0 | $35,000 |
| Building costs | $250,000 | $1,100,000 |
| Site work | $50,000 | $1,200,000 |
| Indoor seating | $0 | $50,000 |
| Restaurant equipment | $120,000 | $260,000 |
| Point-of-sale system (“POS”), digital menu housings (“POPS”) & other technology | $45,000 | $175,000 |
| External Signage | $30,000 | $150,000 |
| Beginning Inventory | $10,000 | $50,000 |
| Advertising funds | $2,000 | $5,000 |
| Insurance premiums | $10,000 | $20,000 |
| Payroll | $40,000 | $137,500 |
| Additional funds (3 months) | $5,000 | $25,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $1,000 for non-control/immediate family/wholly-owned entity transfers; $3,000 for other transfers |
| Renewal Fee | 20% of then current license fee (currently $9,000 for Traditional Drive-Ins and $450/yr of term for Non-Traditional Restaurants) |
| Technology Fee | .25% of Gross Sales |
| Audit Fee | Unpaid amounts, interest, plus additional 10% of unpaid amounts (if understatement of at least 3% of Gross Sales) |
| Brand fee/SBF contribution | 0.90% of Gross Sales |
| Additional training fee | $500 per person |
| Late charge | 1.75% per month of amount overdue |
| Insurance | Cost of obtaining insurance |
| Management fee | 3% of Gross Sales |
| Indemnification | Will vary with the circumstances |
| Enforcement costs | Will vary with the circumstances |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | 5 to 6 months before opening (Career Development Program); 6 months after assuming management position (General Manager Leadership Class) |
| Classroom Training | 16 hours (General Manager Leadership Class) |
| On-the-Job Training | 440 hours (Career Development Program) |
| Training Location | Technical training Sonic Restaurant at various locations throughout the U.S. or Oklahoma City, Oklahoma. |
| Additional Training | Ongoing self-directed online training programs and webinars for management personnel, including station courses and Assistant Manager Learning Development Program, provided at no cost. Franchisees must pay salaries, travel, and living expenses for all persons attending training. Franchisee Certified Training Team (7 members) attends a 5-week training program at a certified Sonic Restaurant for initial restaurants. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Protected Area (Non-exclusive) |
| Exclusive Territory | No |
| Territory Size | Radius of 1.5 to 3 miles depending on population density for Traditional Drive-Ins; None for Non-Traditional Locations. |
| Description | For Traditional Drive-Ins, a protected area is granted, defined by a radius of 1.5 to 3 miles from the restaurant, depending on the city/MSA population. This protected area does not extend into existing protected radii, development areas, or Non-Drive-In/Non-Traditional Locations. The franchisor reserves the right to establish and operate similar businesses or grant licenses for them outside the protected area, or through dissimilar distribution channels (including the Internet) inside or outside the protected area. For Non-Traditional Locations, no protected area or territorial rights are granted. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 20 years, or lesser of 10 years or term of the facility contract for Non-Traditional Locations |
| Renewal Term | One additional 10-year term |
| Renewal Fee | 20% of then current license fee (currently $9,000 for Traditional Drive-Ins and $450/yr of term for Non-Traditional Restaurants) |
| Renewal Conditions | Written notice 6-12 months in advance, compliance with all agreements, satisfaction of all monetary obligations, signing of current license agreement (potentially with different terms/fees/protected area), remodeling the Restaurant, signing a general release, and participation in retraining programs. |
| Transfer Fee | $1,000 for non-control/immediate family/wholly-owned entity transfers; $3,000 for other transfers |
| Transfer Conditions | Franchisor approval (not unreasonably withheld if conditions met), written notice 45 days prior, transferee meets qualifications, all monetary obligations satisfied, transferee/management completes training, Restaurant upgraded/repaired, transferee signs current license agreement or agrees to existing terms, franchisee signs general release, and purchase price/payment terms do not adversely affect operation. |
| Termination for Cause | Immediate termination for: insolvency, failure to locate/secure site, unauthorized transfer, terrorist activities, abandonment, felony conviction, misuse of proprietary marks, disclosure of confidential information, endangerment of public health/safety, denial of inspection, false records/reports, 3+ defaults in 12 months, or termination of other Sonic agreements. 10 or 30-day notice for curable defaults (e.g., failure to pay amounts due, non-compliance with standards). |
| Non-Compete Period | During term of franchise and 18 months after termination/expiration |
| Non-Compete Details | During term: Licensee, owners, directors, officers, and immediate family (excluding children/stepchildren over 21) cannot directly or indirectly engage in, provide services to, acquire interest in, loan money to, or become landlord of any Competitive Business. Cannot appropriate Sonic System. Cannot divert business. After term: Same restrictions apply within 3 miles of former Sonic restaurant or any other Sonic restaurant operating/under construction on termination/expiration date. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | The individual franchisee or the Principal (if an entity) must diligently and fully exploit their rights, personally participate in the operation, and devote sufficient time and attention to the management of the Restaurant. The Principal must own more than 50% of the ownership interests, have authority to direct and control management, and devote sufficient time to promotion and operation. At least one individual working full-time at the Restaurant must have completed the franchisor's training program. All Management Personnel must be certified in ServSafe or a comparable food safety program. |
| Required Suppliers | Franchisees must purchase food, beverages, signs, paper products, inventory, supplies, uniforms, Wacky Pack® Kids’ Meal promotional items, point-of-sale (POS) system, point of purchase system (POPS), mobile ordering technology, payment technologies, audio communications system, equipment, menu and speaker housings, menu boards, and other products and services from franchisor-designated or approved suppliers. Other technology hardware, software, and services for system initiatives must also be purchased from designated or approved suppliers. |
| Supply Restrictions | Franchisor periodically establishes and modifies quality standards and specifications for products and services. They provide relevant standards to approved suppliers and manufacturers, not directly to franchisees. Franchisor has the exclusive right to consider, review, and approve all suppliers and distributors. No formal procedure or written criteria for approval/revocation of alternative suppliers is disclosed, and no fee is charged for approval. Franchisor negotiates purchase arrangements with suppliers for the benefit of the network. |
| Franchisor Revenue from Suppliers | During the fiscal year ended January 2, 2022, suppliers contributed approximately $75,000,000 to the Sonic Drive-In chain. These funds were allocated to the Brand Technology Fund ($36,979,594), Sonic Brand Fund ($15,514,495), System Marketing Fund ($19,600,638), and reimbursement of SISI’s cost to sponsor the annual franchisee convention ($3,346,784). The franchisor or its affiliates did not receive any revenue from selling products or services to franchisees in 2021. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | Sonic Franchising LLC does not offer direct or indirect financing, nor does it guarantee franchisee notes, leases, or obligations. The availability and terms of financing depend on general financing availability, franchisee creditworthiness, collateral, and lending policies of financial institutions. |
Sonic Drive-In Franchise Earnings — Item 19
Average Revenue
$1.7M
Median Revenue
$1.6M
Revenue Range
$354K – $4.5M
Sample Size
3455 units
Past financial performance does not guarantee future results. Individual results will vary.
Sonic Drive-In Litigation & Risk Flags
1 Pending Action ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Sonic Drive-In System Growth
Total Units
3552
Franchised
3232
Company-Owned
320
Sonic Drive-In currently operates 3232 franchised locations and 320 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 22 | 87 | 3329 |
| 2020 | 34 | 26 | 3251 |
| 2021 | 38 | 6 | 3232 |
Transfers: 279 | Closures: 6
State Registrations
Registered in 15 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, OR, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$60.3M
Net Income
$8.1M
Total Assets
$52.2M
Audited by KPMG LLP for year ending January 2, 2022.
Sonic Drive-In Franchise — FAQ
The total investment to open a Sonic Drive-In franchise ranges from $348,500 to $3,543,000, per their Franchise Disclosure Document. This includes the initial franchise fee of $45,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Sonic Drive-In charges a royalty fee of 5.0% (Maximum) of Gross Sales (Traditional) or 4% of Gross Sales (Non-Traditional) of gross sales, plus a 3.25% (Minimum) of Gross Sales (Traditional) or 1.85% of Gross Sales (Non-Traditional) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Sonic Drive-In Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Sonic Drive-In to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Sonic Drive-In franchise owners report average revenue of $1.7M and median revenue of $1.6M. This is based on a sample of 3455 units. Past performance does not guarantee future results.
Sonic Drive-In has been franchising since 1974. The FDD shows an investment range of $348,500-$3,543,000, a 5.0% (Maximum) of Gross Sales (Traditional) or 4% of Gross Sales (Non-Traditional) royalty, and includes an Item 19 earnings disclosure. There are 1 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $45,000 and the total investment ranges from $348,500 to $3,543,000 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Sonic Drive-In and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Sonic Drive-In or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com