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Sonic makes it easier for card-carrying customers

Paul Monies Published: January 5, 2005

The unique carhop service at Sonic Corp. is coming with a new menu option: plastic.

Although customers have been able to pay with credit and debit cards, the Oklahoma City-based company said Tuesday it plans to roll out card readers in the drive in stalls at its 544 company owned restaurants by the end of January.

"We've installed credit card terminals at each stall in most partner-owned drive-ins to make paying by credit card more convenient, Chief Financial Officer Steve Vaughan said in a conference call with analysts.

It may be some time before the stall-based payment option is available at Sonic's 2,373 franchised stores. Most of them have different "point of-sales systems from company-owned stores.

"We're working with another vendor to address the technological challenges of this, Vaughan said in a later interview. "We have it installed in a handful of (franchised) stores right now. Like other new initiatives, we try to make the investment in our company-stores and then let it sell itself to our franchisees.

Franchisees also may see some resistance initially from their carhops, who count on customer tips. The card readers don't allow for tips on the transactions. The system accepts credit cards from Visa, MasterCard, American Express and Discover, as well as most debit cards.

Executives said they don't see carhops most of whom make at least minimum wage losing money if customers use the stall-based credit card readers.

"The pattern appears to be that the consumer charges the meal and on a regular enough basis slips the carhop a buck (in cash), so the carhops come out OK, Chairman and Chief Executive Officer Cliff Hudson said. "It was a concern initially, but it has not manifested itself.

Americans charged more than $30.2 billion at fast-food restaurants in 2004, according to estimates from Visa's SpendTrak survey. That's a 134 percent increase since 2003, when customers charged $12.9 billion at fast-food restaurants.

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