Sonic Is Booming
What were the advantages and disadvantages to Sonic of each form of business ownership? The advantage of the owner of Sonic been a Sole Proprietor would have been, being your own boss, having the creativity freedom, tax benefits, leaving a Legacy, easy start-up. Disadvantages of Sonic staying a Sole Proprietor would be limited growth, limited financial resources, and unlimited liability.
The advantage of Sonic as a partnership the partner could have been skilled in inventory control, as well having more financial resources, longer survival, no special taxes.
The disadvantages of Sonic as a partnership are conflicts with your partner, division of profits, difficulty termination, and unlimited liability.
The advantage of Sonic as a Corporation you will have limited liability, the ability to raise more money for investments, ease of ownership change, and the ease of separations of ownership from management.
The disadvantages of Sonic as a Corporation are double taxation, two tax returns, Initial cost to be incorporated.
Now that Sonic is franchisors they can sell the rights to use the business name and sell a product or service. there are several advantages of been a franchise, are the ability to have many Sonic restaurants all over the world, personal ownership, lower failure rate, and Managements marketing assistance, compared with someone who starts a business from scratch
The disadvantages of franchise are large start-up costs, shared profits, Management regulation, and the coattail effect.
There have been lots of drive-in and fast food restaurants over time. In your opinion, what makes Sonic and other major franchises more successful than others?