Sonic Drive-Ins (Almost) Rejected A Billion-Dollar Idea

It’s a tale as old as time: Hard-working employee has an idea, employee gets chastised for not staying in their lane, employee becomes discouraged and buries their idea or quits finding independent success. This is how Sonic Drive-Ins almost lost a one billion dollar idea, explained Clifford Hudson, former CEO of Sonic Drive-In.

Clifford Hudson, Former CEO of Sonic Drive-Ins
Clifford Hudson, Former CEO of Sonic Drive-Ins

On The Justin Brady Show, Hudson recounted a story of an individual franchisee that had created a frozen drink program. It was wildly successful, but he quickly ran into a problem—it wasn’t ordained by leadership and a company officer issued instructions to shut it down. Frantic, this franchisee sought an audience with the CEO.

After learning about the program, giving him time to explain what he was up to, Hudson finally asked the key question: “What does your top store do in terms of sales? His answer? 30%.” Hudson was stunned.

“Well, I almost fell off my chair,” Hudson explained. Armed with the data, his team began immediately testing a variation of the franchisee’s program, and in a year and a half, rolled out across the entire company. And that’s when the cash really started to pour in.

Master of None - Clifford Hudson
Buy Master of None by Clifford Hudson

“The consequence of beginning to promote drinks and ice cream, which [resulted in] our “frozen fountain favorites” was transformative for our business because in one year it drove profitability up at the average store by 40%. That paid for all kinds of new store growth, new advertising, retrofit of existing stores—and this is what from ’97 to ’01 caused our system to double in size from 1 billion to 2 billion.”

Jump To The Segment Where Cliff tells the story »

What Clifford Hudson Did, Most CEOs Won’t

Consider how close Sonic was to losing this one billion dollar opportunity. Three things that go wrong at most companies, went right in Sonic’s case.

  • The franchisee fought for his idea and believed in it enough to take it to the CEO.
  • The franchisee was prepared with data.
  • Hudson was accessible and willing to hear him out.

All three factors are unusual in and of themselves, but together they are rarer than the Dodo bird. In this case, it worked out. But what about in your company?

If your company sucks at the three categories above, the fortunate part of this story is how easy it is to reverse this trend. Start listening, make yourself accessible, and encourage your employees to think big and come with data.

Unlike know-it-all leaders, wise leaders know great ideas can come from anyone from the C-Suite to the 18-year-old intern. Which leader are you and how many big ideas are right under your nose?

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