Sonic To Target Underperforming Drive-Ins

Journal Record:

Sonic Corp. on Tuesday announced a four-year plan to focus on re-franchising underperforming partner drive-ins.

Partner drive-ins account for about 20 percent of the system.

Plans are also in the works to open 155 to 165 new franchise drive-ins in fiscal year 2009 and open 20 to 25 partner drive-ins.

The accelerated expansion by franchisees over the next few years is expected to reduce partner drive-ins from 20 percent of the system to approximately 13 percent.

In fiscal year 2009 the company plans to retrofit 600 to 700 franchise stores and rebuild or relocate 50 to 60 stores.

The growth in franchising income and gains expected from the re-franchising is expected to increase earnings per diluted share by 12 percent to 14 percent for fiscal year 2009 over fiscal year 2008 earnings per diluted share, the company said.

The company also had to deal with about 100 of its partner drive-ins and 336 franchise drive-ins along the Gulf Coast that closed after two hurricanes moved north from the Gulf of Mexico this summer.