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SONIC CORP.
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1. |
What was announced today?
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Sonic announced that it has entered into an agreement to be acquired by Inspire Brands, Inc.
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Through this transaction, which is valued at approximately $2.3 billion, Sonic will transition from being a publicly traded company to a privately held company.
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Following the completion of the transaction, Sonic will operate as a separate business unit within Inspire and will continue to be based in Oklahoma City and led by our management team.
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This means our franchise structure, branding, operations, and commitment to exceeding the expectations of our guests will remain the same.
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Why are we doing this?
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We have much to gain by joining forces with this powerful group of distinct restaurants.
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As a privately held-company, we expect to have increased operational flexibility, and being part of a larger organization enables outsized investments in long-term growth initiatives and the ability to leverage scale to drive efficiencies.
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Working closely with Inspire, we will continue to provide made-to-order American classics, distinctive flavors and the most personalized guest experience in our industry.
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We unveiled our new vision and mission at Convention two weeks ago and this transaction is geared to help us achieve our vision to deliver a lifetime of delightful and delicious moments for our guests.
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How did this transaction come about?
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Our agreement with Inspire validates the actions we have taken over the last year to increase traffic and improve sales while delivering differentiated offerings and superior guest service.
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We hit a milestone this year with 3,606 drive-ins in operation in in 45 states.
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In a challenging market with heightened competition and changing consumer needs, we have successfully implemented a number of key strategic initiatives, including mobile order ahead, operational simplification, and a more streamlined go-to-market strategy, as we deliver the most personalized guest experience in the QSR industry, support our franchisees and drive growth.
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Our Board of Directors, taking into account the views of shareholders, conducted a comprehensive review of a wide range of strategic options to maximize shareholder value.
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Who is Inspire Brands?
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Inspire is a multi-brand restaurant company whose portfolio includes more than 4,700 Arby’s, Buffalo Wild Wings, and Rusty Taco locations worldwide.
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Inspire is majority-owned by Roark, an Atlanta-based private equity firm that specializes in consumer, multi-unit and franchise brands, including Focus Brands (Moe’s, McAllister’s, Jamba Juice), Seattle’s Best Coffee, Auntie Anne’s, Carl’s Jr / Hardee’s, Corner Bakery, and Culver’s among others.
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We have much to gain by joining forces with Inspire’s powerful group of distinct restaurants.
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Importantly, the Inspire team has great respect for the Sonic brand and confidence in our future. Inspire recognizes our loyal customer base, strong differentiation in the marketplace, unique culture of collaboration with our franchisees and the important role that our franchisees play in driving our brand’s success.
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When do you expect the transaction to close?
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We expect the transaction to close by the end of the year. It is subject to the approval of Sonic shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
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Until closing, we remain an independent company and day-to-day operations and implementation of strategic initiatives will continue as usual.
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During this time, we will continue to focus on building the Sonic brand together with you.
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How will this affect franchisees?
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Until the transaction closes, which is expected to occur by the end of the year, day-to-day operations and implementation of strategic initiatives will continue as usual.
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The Inspire team has communicated a great respect for the Sonic brand, and for all of you, Sonic’s franchisees. Inspire appreciates the unique culture of collaboration between Sonic and our franchisees.
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Inspire is committed to building the Sonic brand, increasing your sales and profits, and preserving our culture.
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Our partnership with you on strategic initiatives regarding technology, new products and marketing and operational programs will continue, and the team at Inspire recognizes the central role you have played, and will continue to play, in Sonic’s success.
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Let me reassure you that based on our conversations with Inspire, it is clear that this transaction is about growth, not cost cutting.
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We expect this to be a seamless transition for franchisees – our branding, operations, and commitment to exceeding the expectations of our guests will remain the same.
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We know you may have additional questions and we will continue to communicate with you throughout the transition this fall. We are committed to a transparent process and answering your questions as we are able.
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Will there be any changes to my franchisee agreement?
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Current franchisee agreements will not be impacted by this announcement.
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Will there be changes to the Sonic franchisee strategy?
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While the Company’s ownership structure will change, our branding, operations, and commitment to exceeding the expectations of our guests will remain the same.
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The Inspire team has communicated a great respect for the Sonic brand, and for all Sonic franchisees. Inspire appreciates the unique culture of collaboration between Sonic and our franchisees.
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We work hard to engage you in planning regarding technology, new products and marketing and operational programs, and the team at Inspire recognizes the central role you have played, and will continue to play, in Sonic’s success.
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Let me reassure you that based on our conversations with Inspire, it is clear that this transaction is about growth, not cost cutting.
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What should I do if I get questions from the media or investors?
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As a reminder, it is important that we continue to speak with one voice.
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Should you receive any inquiries from the media, please refer them to Christi Woodworth, VP of Public Relations at 405-627-1260 or christi.woodworth@sonicdrivein.com.
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Inquiries from shareholders or financial analysts should be referred to Corey Horsch, Chief Financial Officer at 405-225-4800 or corey.horsch@sonicdrivein.com.
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What should I tell my guests?
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You should tell them that it will remain business as usual at Sonic, and we look forward to continuing to provide made-to-order American classics, distinctive flavors and the most personalized guest experience in our industry.
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If you receive any questions or concerns from your guests and are not sure how to address them, please direct them to 1-866-OKSONIC (1-866-657-6642) or visit https://www.sonicdrivein.com/contact.
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What should I tell vendors?
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You should tell them that it will remain business as usual at Sonic. The Company is working with its vendors as it always has.
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If you receive any questions or concerns from vendors and are not sure how to address them, please have them reach out to their regular Sonic representative.
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