Question

In: Operations Management

4. You are an executive involved with Sonic’s franchise operations. Sonic franchisees have become increasingly popular....

4. You are an executive involved with Sonic’s franchise operations. Sonic franchisees have become increasingly popular. On the other hand, you have heard about some notable cases of misconduct at a few franchisees. You think making the franchise requirements more stringent and/or increasing the initial investment will help the company maintain additional control over its franchise operations and increase profit. Develop a list of requirements for opening up a new Sonic franchise that will be distributed to new entrepreneurs wanting to open up their own.

Solutions

Expert Solution

The requirements that need to be satisfied to open a Sonic franchisee are as listed below.

1.The firm should have experience in the restaurant industry with proven records.

2. Good location availability within the city easily reachable for the customers.

3. The franchisee should ensure good infrastructure with quality interior.

3. The franchisee owner must have $ 2 million in liquidity and should pay $45000 as franchisee fee. The initial investment required is &90000 with 6 percent royalty fee and 7 percent advertisement fee.

4. The franchisees should accept the terms and conditions mentioned in the request form and ensure the adherence.

5. The firm should employ required number of experienced workers and all the workers should be trained on customer service skill development and the organizational culture followed by Sonic.

6. The franchisee should provide performance report on monthly basis with achievements and the losses incurred in the particular month with reason for losses and the plans for improvement.


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