Sonic exceeds expectations in Pagosa Springs, originally appeared in Four Courners Business Journal

PAGOSA SPRINGS — In a town with limited dining options, the opening of a new restaurant is momentous. The opening of a new SONIC drive-in in Pagosa Springs on Oct. 16 surpassed all forecasts for franchise owner, the Merritt Group, based in Las Cruces, N.M.

“The restaurant is exceeding expectations in a big way,” Merritt Group spokesperson Kristi Burkett said. “And customer traffic remains steady.”

However, according to Burkett, franchise agreements with SONIC Corp. do not allow them to disclose sales or traffic figures. The average unit sales for SONIC were $964,000 in 2004 and are projected to be more than $1 million in 2005.

“We definitely intend to exceed that number,” Burkett said in reference to the new Pagosa Springs SONIC.

The average drive-in sales for franchise-owned restaurants were $1,039,000 in fiscal year 2005, which ended Aug. 31. According to a news release from Oct. 12, SONIC expects to open 35-40 drive-ins during this, the first quarter of their fiscal year 2006. That number includes 30-35 franchise drive-ins such as the one in Pagosa Springs.

SONIC is the largest chain of drive-in restaurants in America. Started in 1953 by Troy Smith in Shawnee, Okla., as Top Hat Drive-in, the name was changed to SONIC in 1959. Today, SONIC has more than 3,000 locations, primarily across the southern United States. Over the past five years, sales have increased system wide 69 percent for SONIC. Most SONIC locations have 24-36 stalls and carhops who walk or roller skate food to the customer’s car.

The Pagosa Springs SONIC has 23 stalls, a drive-thru window and two patio areas for outdoor dining, and the ubiquitous carhops who seem to enjoy their job.

SONIC restaurants are located in communities of all sizes, from major metropolitan areas to small towns with 5,000 people. The community. SONIC provides a fundraising card for local schools and coupons for students on the honor roll and to promote reading programs. While it is against company policy to make monetary and raw food donations, SONIC is known to provide SONIC bottled water for blood drives and other community events.

The Merritt Group started in 1973 as a SONIC franchisee and now owns 132 drive-ins in New Mexico, Colorado, Texas, Arizona and Nevada. SONIC was ranked sixth on the Entrepreneur magazine Franchise 500 list in 2004.decision to locate a new restaurant is based upon community requests to the SONIC toll free number, as well as traffic and location evaluations by SONIC Corp. The decision to locate in Pagosa Springs was based on this information and the dream of Merritt Group managing partner, Rusty Stewart from Farmington, to live in Pagosa Springs. The Merritt Group considered opening a SONIC in Pagosa Springs for five years off and on before purchasing land near the intersection of Highway 160 and Piedra Road between a new Giant convenience store and gas station and Ponderosa Do-It-Best. Stewart and his wife, Sharon, run the newest SONIC in Southwest Colorado.

The Stewarts consider community involvement as a way to have a positive impact on their new home.

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