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CONTENTS

WHAT IS A SONIC FRANCHISE?

THE SONIC FRANCHISE STORY

WHAT ARE THE STARTUP COSTS?

FRANCHISE MODELS

HOW DOES SONIC SUPPORT FRANCHISEES?

WHY DOES SONIC MARKETING SUPPORT WORK?

HOW DOES SONIC LEVERAGE TECHNOLOGY TO

DRIVE REVENUE?

FRANCHISE OWNER TESTIMONIALS

NEXT STEPS

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What Is a SONIC Franchise? SONIC is ready for a future of continued innovation and rapid growth

SONIC® is America’s drive-in, serving more than 3 million customers a day at over 3,500 locations nationwide. As an iconic brand with a rich heritage of more than 65 years in business, SONIC franchise systems continue to thrive in the booming QSR industry, not only in terms of growth and brand recognition, but also in our unique ability to connect with our millions of customers and become a part of the communities in which we operate.

In recent years, SONIC has leveraged our legacy as a pioneer in customization with new technology and wildly popular marketing campaigns to connect with our loyal fanbase, grow brand equity, enhance the customer experience and help our

franchisees grow their businesses over the long-term. The demand for new SONIC locations has never been higher than it is today.

“When you’re an entrepreneur, and you’re looking for a franchise business model to affiliate with, the first thing that you want to ask is, ‘Which brand can consistently deliver traffic to my door?’” says Claudia San Pedro, President of SONIC. “You won’t find another brand like SONIC that has such tremendous brand awareness across the country yet still has so much room to grow.”

Join a brand that honors your entrepreneurial spirit

SONIC is one of the rare iconic brands that has franchisees with hundreds of locations who have been with us for decades and new franchisees who are growing their business from one restaurant. The reason why entrepreneurs continue to be attracted to SONIC is that we get more than a few things right about our business model and that helps our franchisees thrive.

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Beginning with our B.L.A.D.E. (Breakfast, Lunch, Afternoon, Dinner, and Evening) strategy, SONIC has a five-daypart menu that keeps customers coming to SONIC all day long. Even more importantly, SONIC offers an endless ability for our customers to customize their orders (we have over one million drink options). With our new order-ahead mobile app, we’ve taken customization one step further by allowing our customers the full customization experience on their cell phones – and now they don’t even have to wait! SONIC also rolls out new menu items on a regular basis. This keeps our customers constantly engaged with our brand and makes them excited to come back.

Then there is our advertising power, which is unlike anything else in the QSR industry. Our hilarious television campaigns resonate with young and old, in rural and urban markets, and has propelled SONIC to be a name brand that Americans know and love, even in markets where SONIC has yet to enter. This advertising muscle not only makes it easier for franchisees

to build a following in their communities, it also makes it easier for our customers to feel connected with our brand as we continue to grow.

Our business model is also highly scalable and simple to understand. We optimize unit-level economics, leveraging our national buying power and closely analyzing individual store sales to optimize efficiency. Our leadership is unmatched, and our departments work collaboratively to maximize efficiency and profits across all facets of the business. In addition, SONIC’s purchasing department works closely with the marketing and innovation teams to ensure that every SONIC restaurant has 100 percent availability of the right product at the best cost.

“One question that entrepreneurs should ask when researching a franchise opportunity is, ‘Are my values aligned with those of the franchise business that I’m choosing to associate myself with?’” San Pedro says. “We have a strong culture of making sure that we honor the entrepreneurial spirit for all of our franchisees. We have a culture of support, of investing in new technology and a commitment to innovation. Most importantly, we make sure

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that our franchisees are involved in every one of our initiatives from day one. We have a great partnership with our Franchise Advisory Council, and they play a critical role in our success. It doesn’t matter what the initiative is, we are bringing our franchisees along every step of the way.”

The SONIC Franchise StoryHow SONIC became one of the most iconic brands in the nation with an even brighter future

SONIC® is an American success story that continues to flourish with every new chapter. Founded in 1957, SONIC franchises have risen from humble origins to one of the most instantly recognizable brands in the nation, with over 3,500 locations open from coast to coast and millions of fans who make SONIC a part of their daily lives.

The success of SONIC can be attributed to a long legacy of excellent leadership that emphasizes innovation, collaboration, and great food. Beginning with our founder Troy Smith, who opened the very first SONIC location in Oklahoma City, to Clifford J. Hudson, who oversaw SONIC’s meteoric rise as a national brand, to our current president Claudia San Pedro, who is ensuring that SONIC remains the most forward-looking brand in the booming QSR industry.

San Pedro joined the company in 2006, quickly rising through the ranks. Today she is an accessible leader often seen, literally, out on the floor mingling with employees at SONIC headquarters. Prior to becoming President in early 2018, she helped guide the company in a variety of capacities, including serving as Vice President of Investor Relations and, most recently, Executive Vice President and Chief Financial Officer.

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SONIC drive-in franchises were built to last

SONIC is the largest chain of drive-in franchises in America, offering menu heaven to young and old customers alike — whether they want a juicy burger, a milkshake made with real ice cream or a refreshing cherry limeade. No QSR can match the diversity of SONIC’s menu, which maximizes all five dayparts. SONIC’s Two Guys campaign launched in 2003 and has become one of the most popular QSR advertising campaigns in history.Our brand recognition is unprecedented; even in towns where the closest SONIC might be hundreds of miles away, SONIC is a familiar concept.

In order to help make SONIC easier to open in new markets, SONIC drive-in franchises recently launched several new restaurant

models, including indoor dining, c-store, counter service, travel plaza and more. As a result, SONIC has expanded far beyond our traditional footprint in the Midwest, as far north as Alaska and as far south as Miami, Florida, and we have given entrepreneurs in all markets the opportunity to bring SONIC to any market coast to coast.

SONIC is an experience shared by generations. Customers hit the red order button and magical things happen. Families celebrate birthdays at SONIC. First dates are held at SONIC. Memories are made at SONIC.

SONIC Helps Franchisees Write Their Own Stories

After more than 65 years in business, the stories that we’re the proudest of are the continued success of our franchise owners. Our franchise owners come from all walks of life, and what unites them is their passion for our brand and their drive to succeed.

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We’re proud that several of our franchisees grew up going to or working in a SONIC restaurant in their community. They know how special our brand is and the fact that they chose a life as a SONIC franchise owner proves that point. This is exactly the case of Luke Flatin, a franchise owner in Kansas. This is his story:

I started working at the Ottawa, Kansas, Sonic right out of high school. I applied as a carhop to make some money to pay for gas and insurance for my car. I met and began dating my wife Jessica at Sonic two months after I started. I grew into an Assistant Manager when I was 19 and I was offered a General Manager spot in Burlington, Kansas, when I turned 20. I worked for the Esch Group for 9 years and decided it was time for me to start my own group. I pitched Beatrice, Nebraska, to my uncle for financial help and we opened that store in 2012. Beatrice opened up and did very well for us. Eighteen months later we had the opportunity to buy Hastings and Holdrege, Nebraska, Sonics.

In September 2018 I had the opportunity to fulfill my lifelong dream to become the franchisee and buy out my Uncle. Jessica and I just had the opportunity to buy our first store as franchisees in Neodesha, Kansas and plan on building three more stores in the next two years! Sonic is a once in a lifetime opportunity. Franchisees have great support from corporate and have a lot of opportunity for growth. Our plan for Sonic is to buy and build over 100 stores over the next 25 years. I can’t wait to help make Sonic a bigger and better brand!

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What are the Startup Costs?Franchisees can invest in a strong, growing brand

What does it take to become a SONIC® franchisee? We are looking for passionate business owners, preferably those who have multi-unit franchise or business experience, as well as strong liquidity and net worth. We work closely with franchisees throughout the startup process to ensure their lifelong success with the brand.

The license fee for a traditional Sonic restaurant is $45,000, with a total investment ranging from $1.24 million to $3.53 million (excluding land).

The license fee for a non-traditional Sonic restaurant is $22,500, with a total investment ranging from $361,900 to $978,700 (excluding land). The net worth of a partner can be used toward the total net worth/liquidity requirements. The term of a SONIC franchise ranges from 10 to 20 years, plus a 10-year renewal option.

It typically takes six to eight months to get a SONIC site secured. Once the site selection is complete and construction and build-out of your SONIC restaurant begins, it takes an average of 100 days to open your SONIC location, depending on the area.

SONIC’s corporate office has a full support team and services available to franchisees, such as helpful demographic data and in-depth site analytics, to make the entire site selection and construction process as smooth and profitable as possible for franchisees.

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SONIC Franchise ModelsDiverse models expand SONIC franchise opportunities

From big cities to small towns, long summers or long winters, SONIC® franchise opportunities are endless with new restaurant models to fit in any market. At SONIC, we are all about innovation and customization to optimize the consumer’s experience and maximize ROI for our franchisees. We have built on the unprecedented strength of our traditional drive-in models and adapted to the growing demand for our drive-in restaurants in colder climates. In more urban footprints, we offer modified designs featuring indoor dining as well as counter service, which do well in airports and other indoor retail areas.

Read more about our franchise models:

SONIC Traditional Drive-In Franchise

Our original drive-in model is the core of our business. This standard store layout typically features 8 to 16 drive-in stalls, a drive-thru and patio seating. A traditional SONIC requires a site that is approximately ¾ of an acre for optimum build-out.

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SONIC Indoor Dining Model

As SONIC expands into northern climates, such as in upstate New York, we have adapted our original store design to meet customer needs. Our newly designed indoor dining rooms are ideally suited for the colder weather. The Indoor Dining Model offers patio seating, as well as a drive-thru, and requires fewer drive-in stalls.

SONIC Travel Plaza Model

SONIC end-cap units as part of busy travel plazas have done well as travelers on busy thoroughfares look for familiar dining options that are consistently high-quality and high-value. This model typically does not include the familiar parking stalls and canopies found in the traditional SONIC Drive-In.

SONIC Conversion Model

We can work with franchisees to convert existing restaurant facilities into a SONIC restaurant in the most cost-effective way possible, utilizing the existing kitchen, dining area and patron restroom facilities. In some instances, converting an existing building is best if the site location is determined to be optimal in a particular area.

SONIC Counter-Service Model

The counter-service model does well in airports and busy mall and campus food courts where foot traffic is high. This model is true to our strong branding and stellar food quality and customer service.

How Does SONIC Support Franchisees?Iconic drive-in franchise provides industry-leading training and ongoing support to help franchisees thrive and prosper

The decision to invest in SONIC® is a much wiser investment than going into business alone. For over 65 years, SONIC has helped entrepreneurs become meaningful members of their community by realizing their full potential as part of one of the most iconic QSR brands in the country. A brand can’t remain at the top of the food chain without providing an extensive training platform for its franchisees.

SONIC takes training and ongoing education incredibly seriously because we recognize that franchisees invest large amounts of time and money in good faith, expecting that our proven business model will provide a better life for themselves and their families.

As part of the SONIC franchise family, your business will be fully supported from the moment you sign your franchise agreement.

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Development

SONIC will assist you at multiple phases of the development process, from real estate site selection to site design. Other types of assistance provided by our development team include:

Architectural building design & engineering support Review of site during due diligence phase Approved contractors list Bid review and comparison Construction project management guidance Assistance with development of construction schedule timeline A preferred vendor list

Operations and Training

SONIC provides a structured and comprehensive training program that includes support from the discovery process to opening a new drive-in franchise and much more. We are constantly working to evolve our training and support to assist our franchisees in multiple aspects of their SONIC life.

SONIC E-Learning

In addition to the field training sessions, we also provide SONIC eLearning. SONIC eLearning is a great example of how SONIC embraces technology to engage today’s busy franchisees and SONIC staffers. SONIC provides certified training courses online such as operations, food safety, customer service and management training for our new and existing franchisee community.

Technology

SONIC is always upgrading its technology to benefit operations and generate revenue for franchises. Our new mobile app, for

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example, is making the drive-in experience more convenient than ever before, allowing customers to order ahead. The app has key features that are personalizing the SONIC experience for customers.

Additional Training and Support

National purchasing program Product innovations Staff selection training

Why Does SONIC Marketing Support Work?Television ad campaigns establish record brand awareness and loyal national fan base

For many years, SONIC has grown brand awareness across the nation by coming up with highly creative and engaging television commercials. Our television marketing campaigns have been enormously successful, winning over millions of fans and making it easier for franchise owners to enter new markets

If you’ve turned on a television recently, you have seen our new documentary-style commercials, which feature real SONIC guests in cars to showcase the diversity of

their experiences and how SONIC is uniquely able to bring communities together. This new campaign, called “THIS IS HOW WE SONIC,” embraces the incredible people, experience and food at SONIC and celebrates the everyday moments that happen in the car with friends and family, or solo. From a couple reminiscing on 50 years of marriage over a tasty treat to a unique pre-softball game Tot eating ritual, we’re showing that in America’s infinite variety, a trip to SONIC can be part of almost anything.

This new campaign coincides with a new update to SONIC’s iconic logo, which is now red, white and blue, representing the freedom of the American road and our delicious food.

“We spent a lot of time focusing on ‘how do we memorialize our brand positioning,’ and what we really came to is: SONIC sparks moments of delightful possibility,” Claudia San Pedro, President of SONIC, told Nation’s Restaurant News. “The purpose of our brand is really about providing that little oasis in everybody’s daily routine. With the new campaign, we wanted to reflect, truly show, the whole of America and show the

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extension of how our guests explore freedom through our format, whether that’s the freedom to personalize, the freedom to go when they want and be who they want while they’re in the car. SONIC Drive-In expressly signifies that freedom.”

SONIC also partakes in other marketing efforts to continue growing brand awareness and extend the SONIC experience beyond the drive-in, whether it’s adding extra levels of convenience for our guests through the SONIC mobile app, connecting with them through social media, or being featured within national and local news for best-in-class menu innovations, community involvement and our success as a franchise brand

National media recognition boosts ROI

Due to the national television campaigns, people in markets get to know our brand before a SONIC QSR franchise opens in their location. SONIC’s record brand recognition boosts media power and gives instant advertising dollar power to new restaurants in new locations.

“It really revolutionizes your ability to get a return on investment,” says San Pedro. “Years ago, you had to build enough brick-and-mortar stores in a market so you could afford TV advertising. Today, even with a single store, we start out with high-end TV advertising before we even open the doors. This builds brand awareness nationally as well as locally and it does phenomenal things for you.”

Community involvement is a core part of our culture

At SONIC, our franchisees are closely connected to the communities in which they work. Our franchisees become involved with local schools and organizations, hosting fundraisers and giving back to the community as much as possible. It’s common to see SONIC-branded signs throughout our small-town locations, from little league park sponsorships to fundraising drives. Those close ties make our QSR franchise a common thread in the fabric of many small towns and help franchisees build a profitable business that invokes a sense of pride in the community.

“SONIC operators and franchisees who really get involved in their communities see a phenomenal return on that investment,”

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says San Pedro. “We have a number of stores in smaller towns scattered across much of the country that do a pretty phenomenal amount of business. You ask yourself, ‘How do they make that work, in terms of the population; In terms of the traffic?’ A lot of that is because the brand has such relevance, but also because our franchisees and our operators have done such a great job of connecting with the community.”

Limeades for Learning with SONIC franchises

SONIC is passionate about supporting public school teachers and giving back to the communities it serves. Through the national Limeades for Learning program, in partnership with DonorsChoose, SONIC helps public school teachers access necessary learning supplies all year long.

This system-wide program includes multiple funding events throughout the year including Teacher Appreciation Month, a time dedicated to celebrate teachers, and the Fall Voting campaign, where SONIC donates $1 million to teacher projects across the nation by allowing guests to decide how the funds are allocated.

Since 2009, SONIC has donated more than $16 million to public school teachers across the nation, providing them with essential funds needed for learning materials and innovative teaching techniques to inspire creativity and learning.

How Does SONIC Leverage Technology to Drive Revenue?Iconic drive-in franchise utilizes technological advancements to drive sales, grow brand equity and win new customers

While a drive-in may have a nostalgic look and feel, the reason SONIC® has remained successful over 60 years in business is that the brand continues to innovate on its proven business model by leveraging cutting edge technology to connect with customers.

From the start, SONIC prided itself on its commitment to continued innovation. As one of the pioneers of customization, SONIC has won millions of fans by providing one of the most forward-thinking menus in the QSR industry. By including all five day-parts, and introducing new items at a constant clip, SONIC provides its customers with a universe of options at any time of day or night.

Today, SONIC continues its commitment to innovation with the introduction of a revolutionary mobile app, which allows customers to order ahead. Launched in the spring of 2018, the app is making the drive-in experience more convenient than ever before. It’s menu perfectly mirrors the look and feel of SONIC’s iconic drive-thru menu screens in a fun and interactive way. More importantly, the app significantly decreases the customers

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SONIC Franchise Owner TestimonialsOur franchisees are an extended family committed to excellence

At SONIC® franchising, relationships are a way of life and ingrained in our culture as a core value. Communication and collaboration with franchisees are integral parts of who we are and how we operate.

“There’s really not a single significant initiative that doesn’t have franchisee involvement and testing. SONIC is a very people-driven and relationship-driven culture. The result of this over time is that you get much greater communication, collaboration, and a much higher rate of trust than you see elsewhere,” says President Claudia San Pedro.

Sonic Franchise Owners:

“The help and support from corporate made it a no-brainer to continue what I

started and open more stores with Sonic.”

– Mohammad AlaqrabawyMulti-unit franchisee in Texas

“Sonic has such great brand recognition, which is something you really want in a franchise. The building layouts, the carhops, the huge menu, the drinks,

everything about that is very appealing.”

– Blake HainesMulti-unit franchisee in Tennessee

wait time, as customers can place their order at their nearest SONIC location and know the exact time their order will be ready — and they never have to leave their cars, as their local carhop will bring their orders directly to them.

SONIC utilizes technology to find the locations with best profit-potential

Real estate isn’t getting any cheaper, and as SONIC rapidly opens new restaurants in markets across the country, franchise owners can be assured that their locations have long-term viability and the ability to grow.

SONIC utilizes a team of real estate experts to work alongside new franchise owners to help them secure prime locations in their market.

“With real estate — it’s all about finding the right site,” says Claudia San Pedro, President of SONIC. “On the real estate side, we have a team of professionals who are geographically spaced across the country. We have about 100 years of expertise in real estate and site selection between us. If you sign up to be a franchisee with SONIC, you will be aligned with a real estate director who knows where the opportunities are, and we act as a liaison to help you through the purchase of the property.”

The future of SONIC is brighter than ever before

While SONIC drive-in continues to lead the QSR industry in leveraging revolutionary technology to enhance the customer experience and help franchisees secure real estate, franchisees coming on board can be assured that SONIC will continue to innovate on its business model going forward.

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“I love the direction SONIC is going in. We are pushing the envelope in terms of technology, but we are staying true to our roots. Another thing I love about SONIC is that we as franchisees can call or email anybody at any time at the corporate office and get an immediate response. That speaks volumes about our culture and family-oriented business. I feel like I am part of the national SONIC family. We also have unbelievably loyal customers. If you interviewed any of our customers they would not refer to our SONIC as ‘the SONIC’ or ‘the SONIC at this location’; it would be ‘my SONIC.’”

– Greg RowdenMulti-unit franchisee in Arkansas

“I love the direction of the brand. It’s investing in automation, it’s investing in the customer experience, it supports its franchisees at a lot of different levels and a lot of different disciplines. And it’s remained unique to the quick-service restaurant business. We get a lot of operations support. And I think from a marketing standpoint this is probably the best-marketed brand in this business sector.”

– Max GelwixMulti-unit franchisee in California

“We have relationships with our customers. That’s not common in a lot of other quick-service restaurants, and I think they just respond to that. You become very passionate about it and just can’t imagine doing anything else.”

—Angela OwenMulti-unit franchisee in Durant, Oklahoma

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Next StepsSONIC is a business built on relationships, and we value ours with you from day one

At SONIC®, we are excited about bringing new franchisees to our operating family, but we need to ensure this is a good fit for you as well as for us. We work with you every step of the way to ensure that your SONIC will be a success.

Step 1: Request Information

Discussion with a member from our team.

Step 2: Informal Phone Interview

A member of our Franchise Sales and Development team will call you to discuss your intentions, as well as your financial qualifications and answer any questions you may have.

Step 3: FDD Receipt and Review

If it’s determined that you are a good potential fit for the SONIC franchisee family, you will receive the Franchise Disclosure Document. This document contains all the necessary information about your future SONIC restaurant so you can make a more informed decision.

Step 4: In-Person Meeting

Following these initial steps, an in-person meeting is scheduled with the franchise development team to further discuss the opportunity in your territory and requirements needed to open a SONIC restaurant.

Step 5: Qualification and Approval

Final business approval steps are taken, including finishing the credit approval process. You will be asked to put together a business plan and fill out a credit application, as well as a background check.

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Step 6: Franchise Discovery Meeting

If you have made it this far and you qualify, we will invite you to Franchise Discovery Meeting at our headquarters in Oklahoma City, not far from the original SONIC Drive-In location in Shawnee. We are a relationship brand, so we want to ensure that we start that relationship on your first day. You will meet members of SONIC’s stakeholders and key decision makers, including representatives from development, technology, marketing, real estate and construction and operations.

Step 7: Signing Your SONIC Agreement

Congratulations, you’re officially part of the SONIC franchisee family! We have strategic steps in place to ensure that the opening of your SONIC goes as smoothly as possible. From the time you sign on to the time you open your restaurant is a one-year to 18-month process.

Step 8: Site Secured & Construction/Build-out Begins

We offer a full suite of services to franchisees to assist you every step of the way. You will also be introduced to the business and operations training programs, service team recruitment, training and development, marketing and PR support and other opportunities to help you reach your sales goals. Average build-out takes 90 days, depending on the part of the county in which you are opening.