Sonic Is Booming

Topics: Business law, Corporation, Types of companies, Corporate tax, Sole proprietorship, Legal entities / Pages: 2 (382 words) / Published: Jun 15th, 2012
Do you think that Sonic would have grown as large as it did today if it had remained a sole proprietorship? No they wouldn’t have lasted if they stayed as a Sole Proprietorship why or why not? The way Sonic has expanded it would have too much for a single owner to open up 3000 sonic stores to date.

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?
In my

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