SONC
#Thank you.
Well, let's do that in reverse order, and when you made reference to dinner and evening being hit particularly hard.
What I had made reference to was post-April, excuse me, some shifting in promotional strategy and limited time offers that were focused on, in some cases specific dayparts and some not.
And so, I think what I had made reference to was the BOGO wings, the buy one, get one free after 5 PM Monday through Thursday, weekday BOGO wings.
And so, we're on something that drives traffic and check.
And so, now we've got to find the something, and how we're going to do that for other dayparts.
So as a matter of fact, the dinner and evening, in the more recent past have been our strongest, so just a slight reversal of what impression you got from my comment.
The progression then of same-store sales more recently, we did not comment on.
And I don't think we ever comment on things really by daypart, in terms of break-out in a quarter.
So no comment on the daypart break-out in the quarter.
And we've given you some general guidance as it relates to that first half of this year.
The specifics on this quarter, we'll divulge when we report our first fiscal quarter ended November.
Well, the answer I just gave you, I could repeat it, but there's no need to.
The other comment I made a moment ago was that, as we've refined the promotions, we've had more August, September into October, it gives us confidence that we can kind of find a way forward, even as this value demand stays with us, if that's where the consumer kind of maintains their perspective.
So from my view, there's ---+ and this does go back to the question a moment ago, what makes us more optimistic in the coming months, and more so in the latter half of the year ---+ but what makes us more optimistic, and it is how we're seeing some of things working that we're doing, and our need to kind of expand them into other dayparts, and see if the promotional activity can stick.
But we see our way through that today much better than we did five months ago so.
Go ahead.
< No, no, you go.
We do not sell them at a discount, number one.
Number two, we do require everyone acquiring stores to enter into an area development agreement for additional development of Sonic drive-ins in that marketplace.
So that is part and parcel of each transaction, and that's not been difficult as part of the deal.
The demand is there.
The interest in these stores, I'll guarantee you, the interest is there.
I mean, it's ---+ there are more franchisees with more interest in buying more stores, than there are stores we're selling.
So really, I think that context should be with respect to what we're seeing with industry trends, so no significant change with the industry trends as we look at them.
And again, as we provided context, I know you guys want us to pinpoint the exact same-store sales.
But we already provided the fact that, the first half of the fiscal year will be more challenging, based on what we're seeing with industry trends, and based on what we're comping over from a prior year perspective.
And then, in the second half of the fiscal year, seeing improvement.
So one of the aspects that impacts our royalty rate is not only our same-store sales, but obviously our unit growth numbers.
So if you look at our royalty rate for the fourth quarter, Joe, you'll see a slight increase, I want to say of about 6 or 7 basis points.
And that's really relating to the fact that we closed drive-ins probably at an [AUV] level of about $700,000 or $800,000, and we're opening up drive-ins at a higher ---+ that not only perform better, but are generally at a higher license term.
So that offsets the decline in same-store sales impact that you might see from an ascending royalty rate perspective.
Well, a couple of things.
I mean, there's always the potential for that.
And I think even with our operators, this kind of momentary pause in the business, is an opportunity for them to double it back from an investment and people standpoint, and ensure that they can take the average store, from a talent pool standpoint, and quantity of ---+ quantity and quality of staff, to help take the drive-in to another level.
All of our businesses have been transitioned over last several years within the Sonic system.
So there are those kind of demands, and meaning the challenges of growth.
However, when we looked at peer data, peer, peer data, this past summer, we saw shake sales down in almost all of our competitors.
So this was not a ---+ the second thing we saw, we saw select customers with feedback claiming, select customers claiming they're eating out less.
And my suspicion is, what may be happening, whether they're preparing food at home, I don't know ---+ they may be buying prepared food at grocery stores, and they're buying their ice cream there.
So you're right, it is an occasion.
It is an experience at Sonic.
So our late evening business was ---+ late evening business with our higher dollar items that you're less likely to find at a grocery store, we had continued movement of those items.
It was the shakes, where we had the softness.
And it was not just Sonic, by far.
We saw this with a whole slew of competitors.
Okay.
Thank you, Joe.
I think that was the last question.
We appreciate you all participating today.
<UNK> and Corey will be available, at the number given at the outset of the presentation, if you have questions.
We appreciate your interest in the brand.
We've got a lot of good stuff coming down the pike.
A lot of it's not this quarter sort of stuff, though we have some good news from that standpoint too, but more in long run, well into 2017, in the next several years, it should be a very exciting time for our brand.
And we look forward to sharing that with you along the way.
Take care.
Thank you.
