The SONIC Touch

SONIC Drive-In’s Justin Ashby on achieving growth through new markets, conversions, and controlling costs

With more than 3,500 locations already open, SONIC Drive-In is still chasing further growth with up to 60 new locations planned for 2016 and an upcoming move into the Hawaiian market. Photo: David McNeese

When you think of drive-ins with carhops, movies set in the early 1960s—say, American Graffiti—might come to mind. Outside of the cinema, however, the carhop is alive and well in SONIC Drive-In locations around the United States, and it’s an integral part of the restaurant’s experience. As the largest chain of drive-in restaurants in the country, SONIC serves about 3 million customers each day.

Justin Ashby, the company’s vice president of design and construction, brought a master of science degree in construction management from Texas A&M, as well as considerable construction experience—mostly in the retail QSR segment—to SONIC when he joined the team in 2015.

“I was attracted to the company because of its very aggressive growth plan and heavily entrepreneurial spirit,” he says. “I was enticed by the challenge of bringing my 25 years of experience to take the company’s development program to the next level and ramp up unit production to meet growth goals.”

Ashby’s responsibilities include concept development, architecture, engineering, and construction management. In addition to setting strategic direction for his department, he assesses pipeline and workload needs, allocates and augments resources as necessary to meet growth commitments, and oversees an in-house team of nine designers, construction managers, and administrative support that provides a wide range of services for franchise partners.

“We also complete a few corporate-owned locations every year where we provide a turnkey development service for the brand,” he says.

Ashby describes his management style as collaborative, and adds that getting a team to buy in to that collaborative spirit leads to greater productivity.

“I’m proud of my team,” he says. “They’ve embraced the idea of figuring out how to get more done without exponentially increasing staff. They keep a positive attitude and get positive results. We saw good results last year and are continuing the momentum this year.”

That momentum only seems to be building. As of 2015, SONIC had expanded into its 45th state, Rhode Island, and recently announced plans to expand into Hawaii.

“The company is searching for the perfect site for its first Hawaiian location and determining how best to integrate the SONIC brand with the spirit and culture of Hawaii,” Ashby says.

This effort requires a little more planning than continental-US locations, as the company has to identify local resources to assist in design and construction as well as solve logistical problems such as getting branding elements (signage and canopies) into place. That includes determining whether to produce those elements locally or ship them in from the mainland.

Another area that SONIC is moving into is cobranding with convenience stores. “We’ve already opened two locations with Love’s Travel Stops, and there are more on the horizon with Love’s as well as with Exxon and Cefco,” Ashby says. The cobranded locations are already demonstrating success, so the company is developing prototypes that align with Love’s standard travel stop layouts. SONIC is also expanding into more urban markets, such as Newark, New Jersey, where it opened its first location in 2014.

SONIC Drive-In by the Numbers

3,529
drive-ins in 45 states

50–60 stores
planned to open in 2016

~3 million
customers served daily

1 million+
drink combinations on the menu

¾ acre
average site size

1 acre
average site size of locations with dine-in service

16 stalls
average in freestanding drive-in locations

$5 million+
donated to education through Limeades for Learning with DonorsChoose.org

“Space is often at a premium in urban locations, but we design them to be accessible by car, and we keep the drive-in stalls [when] possible,” Ashby says.

To choose sites for its restaurants, SONIC uses sophisticated market planning and market-research processes, then leverages that with the franchisee’s knowledge of the local market. SONIC offers franchisees significant support, providing not only site design and development assistance, but also an operations model that has been proven successful.

Building a store from the ground up takes six to eight months on average. Conversions are generally faster, taking three to four months on average, although that depends on the configuration and condition of the existing property, as well as on municipal requirements. When picking sites, SONIC considers factors such as bidirectional flow—whether it’s easy to enter and exit the site—as well as visibility of the location.

“We have a differentiated offering that attracts guests—we serve all day long, so we’re not as heavily dependent on traffic direction as some other brands are,” Ashby says, adding that the company’s primary indicators of a successful location are sales, traffic, and profits. “We use internal and customer-facing performance metrics and adapt business models and designs accordingly. For locations with dine-in service, we have additional performance metrics.”

Even with the success and momentum built up in recent years, Ashby says SONIC always needs to make sure the economics work.

“There’s a constant battle to keep costs under control,” he says. “We’re trying to mitigate the impact of inflation. We’re refining our prototypes, trying to make sure our buildings are right-sized. We’re testing more cost-effective materials and even exploring alternative construction methods.”

As far as the future of SONIC, Ashby says there are still states and markets that haven’t yet been tapped, and the company has no shortage of ideas to keep its momentum rolling.

“We have many avenues for serving customers—stalls, drive-through, dine-in—so we can adapt to the needs of local markets,” he says. “We’re taking advantage of conversions and cobranding opportunities—all while staying true to our core strategy of being America’s drive-in. The sky’s the limit.”