Sonic 2011 Annual Report Download - page 20

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Management's Discussion and Analysis of Financial Condition and Results of Operations
The following table provides information regarding the number of Company Drive-Ins and Franchise Drive-Ins operating
as of the end of the years indicated as well as the system-wide change in sales and average unit volume. System-wide
information includes both Company Drive-In and Franchise Drive-In information, which we believe is useful in analyzing the
growth of the brand as well as the company’s revenues, since franchisees pay royalties based on a percentage of sales.
System-wide Performance
Year Ended August 31,
($ in thousands) 2011 2010 2009
Percentage increase (decrease) in sales 1.9% (5.7)% 0.7%
System-wide drive-ins in operation (1):
Total at beginning of period 3,572 3,544 3,475
Opened 43 85 141
Closed (net of re-openings) (54) (57) (72)
Total at end of period 3,561 3,572 3,544
Average sales per drive-in: $ 1,037 $ 1,023 $ 1,093
Change in same-store sales (2): 0.5% (7.8)% (4.3)%
(1) Drive-ins that are temporarily closed for various reasons (repairs, remodeling, relocations, etc.) are not considered
closed unless the company determines that they are unlikely to reopen within a reasonable time.
(2) Represents percentage change for drive-ins open for a minimum of 15 months.
System-wide same-store sales continued to improve during fiscal year 2011 which we believe is largely attributable
to the ongoing positive impact of our strategic initiatives as well as a slightly improving economy. We implemented a
number of initiatives throughout fiscal year 2010 designed to provide a unique and high quality customer service experience
with the goal of improving same-store sales by driving both traffic and average check. These initiatives include focusing
on customer service and improving the quality of our differentiated food and drink products. System-wide same-store sales
increased 0.5% during fiscal year 2011, an improving trend as compared to a decrease of 7.8% for fiscal year 2010.
During fiscal year 2011, our system-wide media expenditures were approximately $170 million as compared to $167
million in fiscal year 2010. We use varying forms of local advertising mediums, such as television, outdoor billboards, radio,
online and print to optimize media impressions in drive-in trade areas. We also continue to invest in system-wide marketing
fund efforts, which are largely used for national cable television advertising. Expenditures for national media advertising
represented 32% of system-wide media expenditures during fiscal year 2011, down from 43% in 2010. For fiscal year
2012, we expect system-wide media expenditures to be approximately $170 million to $175 million with expenditures for
national media advertising representing approximately 45% of that amount.
The following table provides information regarding drive-in development across the system.
Year Ended August 31,
2011 2010 2009
New drive-ins:
Company 35 11
Franchise 40 80 130
System-wide 43 85 141
Rebuilds/relocations:
Company 3– 4
Franchise 11 23 46
System-wide 14 23 50
1 8