Satellite Communications Brings Savings

| November 01, 2007

Eight years ago, Clint Kleppe and his team of IT specialists created a Web-based back-office system that communicated with all of his 25 Arizona-based SONIC restaurants. This allowed Kleppe to gather data, remotely monitor drive-in operations, and perform impromptu computer training sessions for franchise managers.

For years, the back-office systems operated over a combination of communications technologies. Due to geographic locations, however, there was not a single source of connectivity to facilitate communication among Kleppe's franchises. In some areas, frame relay was a cost-effective solution, but when it was deployed in certain rural areas, the technology became very expensive. Locations operating on dial-up Internet often experienced difficulty accessing and submitting pertinent information due to slow Internet connections.

To solve the connectivity issue, SONIC's corporate office presented its franchise owners with the opportunity to deploy satellite technology. Kleppe was one of the first owners to take advantage of the network.

"You can be in the middle of the boondocks and as long as you've got a satellite dish, you've got a connection. That was the main draw for us," Kleppe says. "There have been dozens of situations where we have been able to head off a problem at the pass."

Kleppe cancelled contracts with his DSL, dial-up and frame relay vendors and opted for Hughes Network Systems, LLC (www.hughes.com) as the single point of contact that could provide Internet connectivity to all stores, regardless of location.

"Having just one person to contact in the event of an outage makes it easy to identify and solve problems," says Kleppe. "Before contracting with Hughes, we had to contact multiple vendors to find the source, let alone fix a problem. Now it's one partner, one phone call."

SONIC's satellite network has lead to fewer headaches and cost savings in other areas as well. The satellite network is also used to power SONIC Radio, the music drive-in customers hear as they eat in their cars. Kleppe's contract with his former satellite radio music provider has since been eliminated and Kleppe estimates that his franchise now saves $70 per month per store.

The satellite network has also saved an estimated $100 per month per store in phone expenses, replacing the dedicated phone lines once used for credit card transactions. Fees associated with credit card transactions have also dropped due to the more favorable rates charged by credit card companies over satellite.

"SONIC Corp. has created an excellent program for franchisees to deploy Hughes' satellite communications system, giving the franchise owners access to technology and services that are on par with SONIC Corp.'s companyowned locations," say Kleppe.


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