Sonic Corporation

            In 1953 Sonic Corporation, formally known as The Top Hat, was founded in Shawnee, Oklahoma by Tony Smith. The company uprooted as a drive-in service, which decreased start- up cost due to lack of room for dining in. This ground-breaking restaurant came equipped with drive-in stalls for automobiles that were enabled with a two-way intercom allowing customers to order as soon as they drove in, versus the predictable services of waiting for a carhop to take an order. The Top Hat’s menu consisted of hot dogs, hamburgers, and french-fried onion rings.
 Smith executed an approach which involved a collection of franchise royalties. Sonic franchise holders were necessitated to purchase printed bags at an additional fee, which Smith assembled in connection with a paper-goods provider. Pyramid-type selling agreements were structured by franchisees in endeavors to make money by promoting other franchises through friends.  This lead to original store managers having multiple portions of the earnings. They would receive a portion of their own store plus that of the friend that they recruited. This idea grew into a multi-ownership of majority of Sonic operations, as store managers were also partial owners.  This notion of pyramid-type selling transmitted Sonic onward with hurried expansion.
What they are doing Right
In 1991 Sonic Corporation was the fifth largest franchise in the fast-food industry, providing in the hamburger division, behind McDonald’s, Burger King, Hardee’s, and Wendy’s.  Sonic has and is still carrying the custom of being a high-quality franchise-based organization in the United States.  Operating profit margin (return on sales) has risen from .170 in 1990 to .220 in 1991. The major factor donating to this enhancement is that sales in 1991 rose at larger percentage of profits before taxes and before interest as evaluated to the 1990 figures.  Another profitability ratio is return on stockholder’s equity or return on net worth.  This...