Sonic 2005 Annual Report Download - page 25

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Partner Drive-In Sales
Year Ended August 31,
2005 2004 2003
($ in thousands)
Partner Drive-In sales $525,988 $ 449,585 $ 371,518
Percentage increase 17.0% 21.0% 12.3%
Partner Drive-Ins in operation:
Total at beginning of period 539 497 452
Opened 37 21 35
Acquired from (sold to) franchisees, net (1) 21 11
Closed (1) – (1)
Total at end of period 574 539 497
Average sales per Partner Drive-In $ 957 $ 886 $ 799
Percentage increase 8.0% 10.9% 1.0%
Change in same-store sales (1) 7.4% 7.8% (0.3)%
(1) Represents percentage change for drive-ins open for a minimum of 15 months.
The increases in Partner Drive-In sales result from newly constructed and acquired drive-ins and same-store sales
increases in existing drive-ins, offset by the loss of sales for sold and closed drive-ins.
Change in
Partner Drive-In Sales
Year Ended August 31,
2005 2004
($ in thousands)
Increase from addition of newly constructed drive-ins (1) $ 28,184 $ 23,099
Increase from acquisition of drive-ins (2) 19,831 38,378
Increase from same-store sales 31,109 28,561
Decrease from drive-ins sold or closed (3) (2,721) (11,971)
Net increase in Partner Drive-In sales $ 76,403 $ 78,067
(1) Represents the increase for 58 and 55 drive-ins opened since the beginning of the prior fiscal year as of August 31,
2005 and 2004, respectively.
(2) Represents the increase for 28 and 77 drive-ins acquired since the beginning of the prior fiscal year as of August 31,
2005 and 2004, respectively.
(3) Represents the decrease for 9 and 45 drive-ins sold or closed since the beginning of the prior fiscal year as of
August 31, 2005 and 2004, respectively.
During fiscal year 2005, same-store sales at Partner Drive-Ins again exceeded the same-store sales performance of
our franchisees. The increase in average unit volume was also strong – growing 8.0% during the year as a result of the
acquisition of higher volume drive-ins in Colorado in July 2004 as well as strong performance from new stores.
Effective July 1, 2005, we rolled over the acquisition of the Colorado drive-ins which accounted for approximately
three percentage points of the growth in Partner Drive-In sales during fiscal year 2005.
Beginning in fiscal year 2004, we implemented initiatives designed to close the approximately $130 thousand
sales gap in annual average unit volumes between Partner Drive-Ins and Franchise Drive-Ins. To a large degree, this
effort is modeled on the best practices of our top-volume Partner and Franchise Drive-Ins. Our intent is to
complement the strong profit motive created through our partnership program with strong incentives focused on
top-line growth. During fiscal year 2004, this gap narrowed by 25% or approximately $30 thousand per drive-in.
During fiscal year 2005, the trend continued as same-store sales growth at Partner Drive-Ins outpaced same-store sales
of Franchise Drive-Ins, closing the gap by another $15 thousand.
Over the past several years, we have completed the acquisition of several Franchise Drive-Ins in various markets
including the acquisition of 51 drive-ins located in the San Antonio, Texas market in May 2003 and the acquisition of
Management’s Discussion and Analysis of Financial Condition and Results of Operations
15