Detailed Information on Sonic Drive-In’s Initial Franchise Fee, Royalty Fee + 13 Other Fees (Items 5 and 6, 2022 FDD)

1.  Initial License Fee:  $45,000 for a Traditional Drive-In Location and for a Non-Drive-In Location; $22,500 (or $2,250 multiplied by the number of full or partial years in the term, up to 10 years) for a Non-Traditional Location

• You must pay Sonic an initial license fee when you sign the License Agreement. Sonic’s standard initial license fee for a Traditional Drive-In Location and for a Non-Drive-In Location is currently $45,000, and Sonic’s standard initial license fee for a Non-Traditional Location is currently $22,500 (or $2,250 multiplied by the number of full or partial years in the term, up to 10 years).

• The initial license fees described here are fully earned when paid and are not refundable under any circumstances.

2.  Development Fee:  $10,000 multiplied by the number of Sonic Restaurants to be developed under the Development Schedule

• Under the Development Agreement, you must pay Sonic a nonrefundable development fee of $10,000 multiplied by the number of Sonic Restaurants to be developed under the Development Schedule when you sign the Development Agreement.

• Sonic will credit $10,000 towards the license fee for each Sonic Restaurant opened under the Development Agreement. You (or your Controlled Affiliate) must pay Sonic the balance of the license fee when you (or your Controlled Affiliate) signs the License Agreement for the Sonic Restaurant being developed.

• Sonic and you will determine the number of Restaurants you must develop, and the dates by which you must develop them, before signing the Development Agreement. No portion of the development fee is refundable under any circumstances.

3.  Royalty Fee:  5.0% (maximum) of Gross Sales Traditional and 4% of Gross Sales Non-Traditional

• Due Date:  Payable monthly on the 10th day of the next month.

4.  Brand Fee/Sonic Brand Fund Contribution:  0.90% of Gross Sales

• Due Date:  Payable monthly on the 10th day of the next month.

• Payable to the Sonic Brand Fund.

5.  Advertising Cooperative Fee/System Marketing Fund Contribution:  3.25% (minimum) of Gross Sales Traditional and 1.85% Non-Traditional

• Due Date:  Payable monthly on the 10th day of the next month.

• For Traditional Drive-Ins, this is payable to the advertising cooperative which then forwards part to the System Marketing Fund. For Non-Traditional Restaurants, this is payable to the System Marketing Fund.

6.  Technology Fee/Brand Technology Fund Contribution:  0.25% of Gross Sales

• Due Date:  Payable monthly on the 10th day of the next month.

• Payable to the Brand Technology Fund.

7.  Additional Training Fee:  $500 per person

• Due Date:  Before training.

• Sonic trains 1 principal and 1 manager at no charge.

8.  Transfer Fee:  $1,000 for each non-control transfer, immediate family transfer, or transfer to a wholly-owned entity, and $3,000 for other transfers

• Due Date:  Before transfer.

9.  Audit Fee, Interest, and Surcharge:  unpaid amounts, interest, plus additional 10% of unpaid amounts

• Due Date:  When billed.

• You also must reimburse Sonic for the costs of the audit if the audit shows an understatement of at least 3% of Gross Sales.

10.  Late Charge:  1.75% per month of amount overdue

• Due Date:  When billed (monthly).

11.  Renewal Fee:  20% of then-current license fee (currently would be $9,000 for Traditional Drive-Ins and $450/yr of term for Non-Traditional Restaurants)

• Due Date:  Upon signing new license agreement for renewal term.

12.  Insurance:  cost of obtaining insurance

• Due Date:  As incurred.

• If you fail to obtain insurance, Sonic may obtain coverage at your expense.

13.  Management Fee:  3% of Gross Sales

• Due Date:  Payable monthly on the 10th day of the next month.

• Due only if Sonic or its appointee manages the Restaurant pending exercise or closing of the option to purchase after the License Agreement terminates.

14.  Indemnification:  will vary with the circumstances

• Due Date:  On demand.

• You must reimburse Sonic for claims and liabilities relating to your Restaurant’s development or operation, or your breach of the License Agreement.

15.  Enforcement Costs:  will vary with the circumstances

• Due Date:  On demand.

• If Sonic or its affiliates become involved in any action to enforce any agreement relating to the Restaurant, the prevailing party may recover costs and legal fees.