Sonic 2008 Annual Report Download - page 51

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Managemen' Discuio  Anali  nancia Condo  Resu  Operaon
5
Sonic Corp. 2008 Annual Report
During fiscal year 2008, our system-wide media expenditures were approximately $190 million as compared
to $175 million in fiscal year 2007, which we believe continues to increase overall brand awareness.
Approximately one-half of our media dollars are spent on system-wide marketing fund efforts, which are largely
used for network cable television advertising. Expenditures for national cable advertising increased from
approximately $90 million in fiscal year 2007 to approximately $95 million in fiscal year 2008. Increased network
cable advertising provides several benefits including the ability to more effectively target and better reach the
cable audience, which has now surpassed broadcast networks in terms of viewers. In addition, national cable
advertising also allows us to bring additional depth to our media and expand our message beyond our
traditional emphasis on a single monthly promotion. The balance of our system-wide media expenditures is
focused on local store advertising. Looking forward, we expect system-wide media expenditures to exceed $200
million in fiscal 2009, with the system-wide marketing fund representing approximately one-half of total media
expenditures.
The following table provides information regarding drive-in development across the system. Retrofits
represent investments to upgrade the exterior look of our drive-ins, typically including an upgraded building
exterior, new more energy-efficient lighting, a significantly enhanced patio area, and improved menu housings.
Year Ended August 31,
2008 2007 2006
New drive-ins:
Partner 29 29 35
Franchise 140 146 138
System-wide 169 175 173
Rebuilds/relocations:
Partner 576
Franchise 64 35 11
System-wide 69 42 17
Retrofits, including rebuilds/relocations:
Partner 167 175 120
Franchise 800 316 12
System-wide 967 491 132
Results of Operations
Revenues. The following table sets forth the components of revenue for the reported periods and the
relative change between the comparable periods.
Revenues Percent
Year Ended August 31, Increase/ Increase/
2008 2007 (Decrease) (Decrease)
($ in thousands)
Revenues:
Partner Drive-In sales $ 671,151 $ 646,915 $ 24,236 3.8%
Franchise revenues:
Franchise royalties 121,944 111,052 10,892 9.8
Franchise fees 5,167 4,574 593 13.0
Other 6,451 7,928 (1,477) (18.6)
Total revenues $ 804,713 $ 770,469 $ 34,244 4.4