Sonic Drive-In, which is owned by Inspire Brands, has more than 3,500 locations in 47 states.
With over 1,000 Taco Bells, KFCs and Arby’s restaurants in its portfolio, KBP Brands had the Mexican, chicken and sandwich segments covered.
The one glaring hole in the multi-unit, multi-brand franchisee’s collection of quick-service brands was a burger concept.
That came to an end when the Kansas-based operator recently acquired 85 Sonic Drive-In restaurants in Delaware, Georgia, Kentucky, North Carolina, South Carolina, and Virginia from Columbia, South-Carolina-based Boom Inc. Terms of the deal were not disclosed, but KBP CEO Mike Kulp shared that his company received an RFP last December and that negotiations with the seller began about six months ago.
“Burgers was an obvious hole in our portfolio and we couldn’t be more excited to be able to partner with an iconic brand like Sonic that’s been around a long time and has established itself as a popular and iconic brand in the burger category,” Kulp said.
The acquisition brings KBP’s portfolio to more than 1,000 restaurants, including 832 KFCs in 28 states, 118 Arby’s and 54 Taco Bells. It has 147 dual-brand units, including 109 KFC/Taco Bell locations, 33 KFC/Long John Silver’s and five KFC/A&W locations.
KBP ranked No. 4 on the Franchise Times Restaurant 200 list with $1.34 billion in sales for 2023.
Sonic, meanwhile, lands at No. 20 on the Top 400 rankings with $5.5 billion in sales and more than 3,500 restaurants in 47 states. Inspire Brands, the owner of Buffalo Wild Wings, Arby’s, Dunkin’ and Jimmy John’s among other brands, purchased Sonic for $2.3 billion in 2018.
Kulp said KBP explored adding a burger concept for the past decade and after considering “pretty much every major burger brand out there, with the exception of McDonald’s,” which he said presented “too many challenges with scalability as a franchisee,” landed on Sonic.
KBP Brands CEO Mike Kulp
“There were a number of reasons for us wanting to get this transaction done, but the thing that really was a deciding factor for us was the geography of the restaurants available,” Kulp said. “They are in a part of the country where Sonic does really well. Lexington, Kentucky. Norfolk, Virginia. Winston-Salem, North Carolina. Columbia, South Carolina. Savannah, Georgia. They are all good markets for the Sonic brand, which gives us a kind of operating leverage and platform as we move into new geography.”
Kulp said the 85 Sonics acquired by KBP are for the most part performing above the systemwide sales average of $1.5 million. He also said that Mark Everett, the executive vice president and general manager at KPB, will lead operations for all KBP-owned Sonic locations.
Prior to his new role, Everett led half of KBP’s Yum Brands portfolio of KFCs and Taco Bells as the division vice president with oversight of approximately 400 locations. Previously, he was the group vice president at Target Corp., where he managed the company’s largest geography and one of its highest-volume regions and was responsible for over $4 billion in annual sales.
“Out of the chute, we’re going to really focus on becoming experts in the brand, building the analysis capabilities that we need to execute at a very high level,” Kulp said. “The first 90 days of our 180-day plan will be spent getting to know the new group that we brought on with the phase two focus being on growing that business.”
Asked what’s next for KBP and should we anticipate the company taking on additional QSR brands, Kulp said that’s highly unlikely, at least for the time being.
“If I had a crystal ball, I would tell you that I would hope that when I look back a few years from now we’ve been able to satisfy all of our desires from a growth perspective with the four brands that we now have in the portfolio,” he said.