Brian Nagele
How much money you can make is probably one of your top concerns if you’re thinking about buying a Sonic business. Your location, your level of experience, and the amount of money you are investing are just a few of the variables that will affect the answer to that question.
However, you may get a basic notion of the revenue potential of a Sonic franchise by looking at the financial data offered by Sonic and by speaking with current franchisees.
The average gross revenues for a Sonic franchise in 2022 were $1,522,000, according to the company’s franchise disclosure statement.
Of course, this figure is merely an average, and your real sales may vary depending on a number of variables.
It does, however, give you an idea of how much money a Sonic franchise may potentially make.
To gain a more true view of your potential earnings, you must remove your expenses from this amount since it represents gross sales rather than net profits.
To get a sense of current franchisees’ experiences, it’s a good idea to speak with them in addition to looking at Sonic’s financial statistics.
Some franchisees could be happy to disclose their financial information with you, while others would just provide basic information about the Sonic franchise’s profitability.
You can get a more accurate picture of how much money you can expect to make as a Sonic franchise by integrating this data with Sonic’s financial statistics.
Understanding Sonic Franchise
It’s critical to comprehend the costs and potential profits if you’re thinking about buying a Sonic franchise.
A Sonic franchise requires a $45,000 initial license fee, according to the company’s Franchise Disclosure Document (FDD). To open 1-2 units, you also need to have a minimum net worth of $1,000,000 and at least $500,000 in liquid money.
The financial requirements for more units will rise, so keep in mind that the Sonic Drive-In business is largely a multi-unit proposition.
After submitting the necessary paperwork and receiving approval to become a Sonic franchise, you can anticipate assistance and training from the business.
Franchisees will receive up to 12 weeks of training, which will include both classroom and on-the-job teaching, according to the FDD.
Additionally, the business offers continuing assistance in functional areas including supply chain management, operations, and marketing.
The FDD includes some earnings data, including typical revenues and profits for Sonic franchises.
The study states that $1,465,000 was the typical gross sales for a Sonic Drive-In restaurant in 2020.
It is crucial to keep in mind, though, that individual outcomes can differ based on things like location, rivalry, and management.
The FDD offers details on average costs and profitability for Sonic franchises in addition to gross sales.
In 2020, a Sonic Drive-In restaurant’s average cost of goods sold was 27.3% of gross revenue, according to the document. 8.8% of gross sales was the average occupancy cost (rent, utilities, etc.).
The average net profit for a Sonic Drive-In restaurant in 2020 was $220,000 after subtracting these and other costs.
In conclusion, purchasing a Sonic franchise can require a substantial financial investment, but it also has the potential to be a successful commercial endeavor.
It is crucial to properly read the FDD and speak with a knowledgeable professional before making any decisions.
Initial Investment Required
You will need to make a start-up investment if you want to own a Sonic franchise.
For one unit, there is a $45,000 non-refundable franchise fee.
However, this charge also grants access to the company’s exclusive goods, recipes, and operating systems as well as the right to utilize the Sonic brand name, trademarks, and service marks.
You should also budget for other startup costs including real estate, supplies, equipment, company licensing, and operating capital in addition to the franchise fee.
The entire projected initial expenditure for a new Sonic franchise, excluding land, ranges from $1,020,000 to $1,770,000, according to the Sonic Franchise Disclosure Document (FDD).
It’s crucial to keep in mind that the initial expenditure will vary based on a number of elements, including the building’s location, size, and condition, as well as the price of labor, supplies, and equipment.
You must also account for recurring costs like rent, utilities, insurance, and royalties.
According to the FDD, the following is a breakdown of the anticipated upfront costs for a new Sonic franchise:
| Category | Low Estimate | High Estimate |
| Real Estate | $0 | $1,200,000 |
| Building and Site Improvements | $400,000 | $1,000,000 |
| Equipment and Fixtures | $400,000 | $500,000 |
| Signage | $10,000 | $50,000 |
| Opening Inventory and Supplies | $25,000 | $40,000 |
| Pre-Opening Expenses | $50,000 | $100,000 |
| Professional Fees | $20,000 | $40,000 |
| Insurance | $10,000 | $20,000 |
| Training Expenses | $15,000 | $25,000 |
| Additional Funds (3 months) | $90,000 | $200,000 |
| Total | $1,020,000 | $1,770,000 |
Remember that this is only an estimate and that final costs may differ.
To ascertain the precise expenses and viability of starting a Sonic franchise, you should thoroughly read the FDD and speak with a financial expert.
Ongoing Costs
After making an initial investment in a Sonic franchise, it’s crucial to take into account the continuous expenses related to maintaining the business.
You can anticipate the following major continuing expenses:
Royalty Fees
You will have to give Sonic a weekly royalty charge equal to 5% of your gross sales as a franchisee.
The expense of using the Sonic operating system, brand name, and trademarks is covered by this price.
It is crucial to keep in mind that this cost is subject to alteration and may change depending on your location and other aspects.
Advertising and Marketing Fees
You must additionally contribute to Sonic’s national advertising and marketing budget in addition to the royalty charge.
This charge is now 3% of your weekly total sales. This money goes to Sonic’s marketing efforts and promoting its franchise locations.
You can also be expected to support regional marketing and advertising initiatives.
Rent and Utilities
You will be liable for paying the rent and utilities for your Sonic location as a franchisee.
Depending on your location and the size of your restaurant, the cost of rent and utilities will change.
When planning your franchise budget, it’s crucial to take these expenses into account.
Employee Wages and Benefits
The cost of employee salary and benefits is another recurring expense to take into account.
To run your Sonic location, you will need to hire and compensate employees.
Depending on where you are located and how many employees you hire, the cost of employee pay and benefits will change.
Food and Supplies
Finally, you will require supplies and food to run your Sonic store.
Depending on where you are and how big your restaurant is, the price of food and supplies will change.
When planning your franchise budget, it’s crucial to take these expenses into account.
Potential Revenue
Your prospective earnings as a Sonic franchise are based on a number of variables, including your location, the level of competition, and consumer demand.
The average gross revenues for Sonic non-traditional franchise restaurants that were operational and running as of the end of 2020 were $1,246,000, according to the company’s 2021 FDD.
However, as this is only an average, your actual income may differ.
It’s crucial to remember that Sonic Drive-In operates seasonally, and sales may vary depending on the season.
For instance, sales typically increase in the summer, when people are more likely to eat fast food out. On the other hand, because of the colder weather, sales can be reduced in the winter.
Your location may have an impact on your revenue in addition to seasonal variations.
The earnings potential in suburban or rural locations, where Sonic Drive-In franchises are frequently found, may be different from that in metropolitan ones.
Before choosing a site for your franchise, it’s crucial to conduct market research on local demand and competition.
The sort of franchise you select is another element that could affect your revenue. Traditional, non-traditional, and satellite sites are among the different franchise choices that Sonic Drive-In offers.
Depending on the franchise type you select, the initial investment and prospective earnings may change.
Overall, it’s vital to remember that, despite the rich potential earnings of a Sonic series, success is not ensured.
Building a successful franchise requires effort, commitment, and a sound business plan.
Factors Influencing Earnings
There are a number of things that can affect your ability to make money when you own a Sonic brand.
Here are some important things to think about:
Location
One of the most crucial elements in deciding your earning potential is location.
Sales at a Sonic store in a busy area with plenty of foot traffic and visibility will often be higher than those at a site farther away or with less visibility.
Additionally, the location and size of the restaurant might affect the cost of real estate and construction, which can affect your overall profitability.
Operating Costs
Your prospective income might also be impacted by operating expenses including labor, food, and supplies.
Due to their drive-in concept and focus on carhop service, Sonic businesses often have greater labor costs than comparable fast-food franchises.
Additionally, your profitability may be impacted by the location- and season-specific expenses of food and supplies.
Marketing and Advertising
Your potential for financial success may also be influenced by marketing and advertising.
The first franchise fee, royalty charge, and marketing cost for Sonic Drive-In are calculated based on Items 5 and 6 of the business’s 2022 FDD.
These costs support national advertising and marketing initiatives that raise brand recognition and encourage customers to visit your franchise location.
To draw clients in your particular market, you might also need to spend money on local marketing and advertising campaigns.
Experience and Management
Your income potential may also be impacted by your experience and management abilities.
Franchisees with extensive management experience have a higher likelihood of operating profitable businesses.
Having a solid team in place can also help you streamline processes and lower expenses, which can increase your potential revenues overall.
Frequently Asked Questions
How much can you make with a Sonic franchise?
The amount of money you can make with a Sonic franchise depends on several factors, including the location of your franchise, the size of your franchise, and your ability to manage your business effectively. According to VettedBiz, the average annual revenue for a Sonic franchise is $1.2 million, with an average profit of $200,000 to $250,000 per year. However, it’s important to note that these numbers are just averages, and your actual revenue and profit may be higher or lower depending on your specific circumstances.
What are the startup costs for a Sonic franchise?
The startup costs for a Sonic franchise can vary widely depending on several factors, including the size and location of your franchise, the cost of real estate in your area, and the amount of money you need to borrow to get started. According to Franchise Gator, the total investment required to start a Sonic franchise ranges from $1,020,000 to $1,770,000. This includes a franchise fee of $45,000, as well as costs for real estate, construction, equipment, and other expenses.
What are the ongoing costs for a Sonic franchise?
In addition to the startup costs, there are also ongoing costs associated with running a Sonic franchise. These costs include royalties, advertising fees, and other expenses. According to America’s Best Franchises, the ongoing costs for a Sonic franchise include a royalty fee of 5% of gross sales, an advertising fee of 2% of gross sales, and a technology fee of 1% of gross sales. It’s also important to note that these fees are subject to change, so it’s important to stay up-to-date on the latest franchise fees and expenses.
Conclusion
Although owning a Sonic franchise involves a sizable initial investment and continuing costs, it can be a successful business enterprise.
According to data compiled from a variety of sources, the total projected investment required to launch a Sonic franchise ranges from $1,020,000 to $3,640,000.
This covers the original franchise fee, the cost of the property, as well as additional charges for things like inventory, equipment, and training.
You can anticipate paying a marketing cost of 3% of gross sales as well as an annual royalty fee of 5% of gross sales as a Sonic franchise.
According to Entrepreneur, Sonic Drive-In locations had average gross sales of $1,360,000 in 2022.
It’s crucial to remember that each franchise earnings can differ depending on elements including location, competition, and management.
The extensive training and support programs offered by Sonic are one benefit of owning a franchise.
For new franchisees, Sonic offers a 12-week training course as well as continuous help in areas including marketing, operations, and technology.
Additionally, Sonic provides suitable candidates with financing options, which can assist lower the cost of the initial investment.
