Tuesday, 30 November 2010

Troy Smith - Founder of Sonic

Troy Smith opened The Top Hat in Stillwater, Oklahoma, in 1953. The Top Hat was a root beer stand with a gravel lot for parking, but after a trip to Louisiana, Smith wired up an intercom system so that customers could order their food from the ca and have car hops deliver it. When local grocery store manager Charles Pappe stopped by to see what he was up to, the two men became friends, and Pappe opened the first franchise location, in Woodward, Oklahoma, in 1956. They built two more locations in the Stillwater area before finding out somebody had trademarked the Top Hat name, so they changed the name of the restaurants to Sonic, with the slogan "Service at the Speed of Sound." While McDonald's and similar chains were building their empires with a no-frills assembly-line approach, the Sonic brand identity was based on car-side service. There was no standardized menu for franchisees to follow, no equivalent to the Big Mac or the like, and growth was primarily regional, with small towns favored over urban areas. In many rural areas, the Sonic became the gathering place for teenagers; family dining was encouraged by providing free peppermint candy with every meal, and plastic animals called zoo-picks to hang on drink cups, until consumer safety laws banned them as a choking hazard.

Smith and his business partners founded Sonic Supply -- later Sonic Industries -- in the 60s, to provide franchisees with the equipment they would need and provide some basic instruction in running the business. Menus varied a great deal, having picked up regional specialties over time -- the Midwestern Sonics often featured a pork tenderloin sandwich, deep-fried pickles were sold in Texas and Oklahoma, and chili recipes were as varied among the many Sonic locations as they were among any other restaurants or home kitchens. By the 70s, when fast-food chains like McDonald's depended on national advertising campaigns and international recognition, this was an enormous deviation from "the way things were done." While a strength in some ways, this seemed to impose a limit on growth -- and there was no quality control either.

In 1983, Smith and the Board of Directors brought in a new President (Stephen Lynn), who in turn hired a young lawyer as head of the legal department. Smith and Lynn encouraged franchisees to develop local advertising co-ops, pooling funds for joint advertising to stimulate growth. New franchise agreements were written, and over the next decade, Sonics became more standardized in their procedures, training, and menu offerings. With those changes in place, Sonic has begun to grow again after its brief unprofitable period.

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