Franchise owners see benefit to their bottom line with savings on purchases
For franchisees in the foodservice industry, food and paper costs will always be among the largest lines on their P&L statements. SONIC® is committed to managing the supply chain for our franchisees, which is helping keep costs down and ensuring our customers get the highest quality products in each of our drive-ins across the country.
“For every single category we purchase — whether it’s beef, chicken or pork products — we build out the associated contracts with the right suppliers,” explains Michele Varian, Vice President of Supply Chain and Purchasing. “We look at every single cost component that goes into that case, from inbound freight to packaging, to the actual commodity itself. We put together, if possible, long-term contracts to protect pricing, and then get into the real minutiae of managing those commodity costs. There’s an amazing amount of value that can be drawn on managing components separately, and we’re very excited about that.”
SONIC’s supply chain and distribution team helps franchise owners save on indirect purchases
Michele and her team look for areas of opportunity where SONIC can grow such as with indirect purchasing. Until recently, franchisees were not able to get the same benefit on necessary, but indirect, purchases like trash disposal. Michele’s team has been able to secure contracts for those types of costs. That means savings for franchise owners.
“We’re building purchasing strategies on waste management and used cooking oil resale,” says Michele. “By doing so, we’re pulling those expenses together, building and bringing value back to the system. If you think about indirect cost, or even food and packaging cost, any savings that we can generate fall 100% to the bottom line. So we’re thinking about those efforts through Supply Chain management as adding to the profitability of every single drive-in.”
Managing SONIC’s supply chain and distribution is like running a business within a business. When this aspect of SONIC’s overall operations is efficient, cost-effective and provides value, then the entire brand benefits, especially at the local drive-in level.
“I’m managing a $1.3 billion business inside SONIC’s total business. We run this $1.3 billion business like it’s our own company. We are making sure that we have strong business cases put into place for purchases that we are making, and we can support the franchise community with the total programs utilizing the economies of scale that we can bring together from the whole system,” says Michele.
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SONIC is America’s Drive-In®, serving more than 3 million customers a day at more than 3,500 locations nationwide. An iconic brand with a rich heritage encompassing more than 60 years, SONIC believes in excellent customer service and developing core relationships with customers in the communities where our franchise owners operate. Committed to helping our franchise owners succeed, we are in the middle of a major nationwide expansion.