10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended:  August 31, 2015

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________to ________________

Commission File Number 0-18859

SONIC CORP.

(Exact name of registrant as specified in its charter)

Delaware	73-1371046
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

300 Johnny Bench Drive	73104
Oklahoma City, Oklahoma	(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code:   (405) 225-5000

Securities registered pursuant to section 12(b) of the Act:

None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, Par Value $.01 (Title of class)

(Facing Sheet Continued)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ☒  No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ☐  No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file the reports), and (2) has been subject to the filing requirements for the past 90 days.  Yes  ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ☒  No  ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer ☒	Accelerated filer                  ☐
Non-accelerated filer   ☐ (Do no check if a smaller reporting company)	Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐  No  ☒

As of February 28,  2015, the aggregate market value of the 49,586,225 shares of common stock of the Company held by non-affiliates of the Company equaled $1,576,346,093 based on the closing sales price for the common stock as reported for that date.

As of October 15,  2015,  the Registrant had 49,779,353shares of common stock issued and outstanding.

Documents Incorporated by Reference

Part III of this report incorporates by reference certain portions of the definitive proxy statement which the Registrant will file with the Securities and Exchange Commission no later than 120 days after August 31, 2015.

FORM 10-K OF SONIC CORP.

TABLE OF CONTENTS

PART I
Item 1.	Business	1
Item1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	12
Item 4.	Mine Safety Disclosures	12
Item 4A.	Executive Officers of the Company	12
PART II
Item 5.	Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	16
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 8.	Financial Statements and Supplementary Data	30
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	30
Item 9A.	Controls and Procedures	30
Item 9B.	Other Information	33
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	33
Item 11.	Executive Compensation	33
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	33
Item 13.	Certain Relationships and Related Transactions, and Director Independence	33
Item 14.	Principal Accounting Fees and Services	33
PART IV
Item 15.	Exhibits and Financial Statement Schedules	34

FORM 10-K

SONIC CORP.

PART I

Item 1.  Business

Overview

Sonic Corp. operates and franchises the largest chain of drive-in restaurants (“Sonic Drive-Ins”) in the United States.  References to “Sonic Corp.,” “Sonic,” “the Company,” “we,” “us” and “our” in this Form 10-K are references to Sonic Corp. and its subsidiaries. 

The first Sonic Drive-In restaurant opened in 1953.  As of the end of our fiscal year on August 31, 2015, the Sonic system included 3,526 Sonic Drive-Ins in 44 states of which 387 were owned and operated by Sonic Restaurants, Inc., the Company’s operating subsidiary (“Company Drive-Ins”), and 3,139 were owned and operated by franchisees (“Franchise Drive-Ins”).

Sonic Corp. was incorporated in the State of Delaware in 1990 in connection with its 1991 initial public offering of common stock.  Sonic is publicly traded on the NASDAQ National Market Stock Exchange (“NASDAQ”) (Ticker: SONC).

Restaurant Design and Construction

The typical Sonic Drive-In consists of a kitchen housed in a one-story building, which is approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board.  At a typical Sonic Drive-In, a customer drives into one of the parking spaces, orders through the intercom speaker system and has the food delivered by a carhop.  Many Sonic Drive‑Ins also include a drive-thru lane and patio seating to provide customers alternative dining options.

Menu

Sonic maintains a highly diverse menu.  The menu strategy is to provide a broad range of items that appeal to target customer segments across different day-parts.  The menu includes a variety of traditional and healthier choices as well as creative and fun items.  Sonic’s signature food items include specialty drinks (such as cherry limeades and slushes), ice cream desserts, made-to-order sandwiches and hamburgers, a variety of hot dogs includingsix-inch premium beef hot dogs and footlong quarter-pound coneys, hand-battered onion rings, tater tots and wraps.  Sonic Drive-Ins also offer breakfast items that include a variety of breakfastburritos and serve the full menu all day.

Strategy

Sonic has developed and implemented a strategy designed to enhance the Sonic brand and to achieve high levels of customer satisfaction and repeat business.  The key elements of our strategy are:

· A distinctive drive-in concept focusing on a unique menu of quality, made-to-order food products including several signature items;

· A commitment to customer service featuring the quick delivery of food by friendly carhops; and

· A commitment to strong franchisee relationships.

Sonic’s growth strategies include the following:

· Same-store sales growth fueled by Sonic’s core brand strengths, including consistent drive-in execution, high-quality products, new product news and service differentiation with friendly carhops.  These strengths are complemented by increased media effectiveness and the use of innovative technology to enhance the customer experience;

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· Improved performance of Company Drive-Ins, including consistent operations execution, speed of service, cleanliness of drive-ins and drive-in margins with the use of the Sonic system’s point-of-sale technology; and

· Expansion of Sonic Drive-Ins.

Restaurant Locations

As of August 31, 2015, 3,526 Sonic Drive-Ins were in operation from coast to coast in 44 states, consisting of 387Company Drive-Ins and3,139 Franchise Drive-Ins.  

Expansion

During fiscal year 2015, we opened 41 Sonic Drive-Ins, which consisted of three Company Drive-Ins and 38 Franchise Drive-Ins.  Expansion plans for fiscal year 2016 involve the opening of multiple Sonic Drive-Ins under development agreements, as well as single-store development bynew and existing franchisees.  We believe that ourexisting, as well as newly opened markets, offer significant growth opportunities for both Company Drive-In and Franchise Drive-In expansion over the long term.

Marketing

We have a fully integrated marketing strategy that includes a national advertising campaign.  We have designed this marketing program to differentiate Sonic Drive-Ins from our competitors by emphasizing high-quality, distinctive, made-to-order menu items and personalized service featuring friendly carhops.  We support promotions with television, radio, digital media, point-of-sale materials and other communications as appropriate.  Those promotions generally highlight limited-time products and signature menu items.

Each year, Sonic develops a marketing plan with the involvement of the Sonic Franchise Advisory Council.  (Information concerning the Sonic Franchise Advisory Council is set forth on page 444 under Franchise Program -Franchise Advisory Council.)  Funding for our marketing plan is provided by the System Marketing Fund, the Sonic Brand Fundand local advertising expenditures.  The System Marketing Fund primarily focuses on purchasing advertising on national cable and broadcast networks and other national media, sponsorship and brand enhancement opportunities.  The Sonic Brand Fund supports national media production as well as other programs designed to promote or enhance the Sonic brand.   Franchisees also may be required to spend additional amounts on local advertising, typically through participation in the local advertising cooperative.  Our franchise agreements require advertising contributions by franchisees of up to 5.9% of gross sales to these marketing funds and local advertising cooperatives.

Purchasing

We negotiate with suppliers for the Sonic Drive-Ins’ primary food products and packaging supplies to obtain competitive prices and ensure adequate quantities of food and supplies.  We seek competitive bids from suppliers on many of our food and packaging items.  We approve suppliers of those products and require them to adhere to our established product and food safety specifications.  Suppliers manufacture several key products for Sonic under private label and sell them to authorized distributors for resale to Sonic Drive-Ins.  We require all Sonic Drive-Ins to purchase from approved distributors.

Food Safety and Quality Assurance

To ensure the consistent delivery of safe, high-quality food, we created a food safety and quality assurance program.  Sonic’s food safety program promotes the quality and safety of all products and procedures utilized by all Sonic Drive-Ins and provides certain requirements that must be adhered to by all suppliers, distributors and Sonic Drive-Ins.  Our comprehensive, restaurant-based food safety program is called Sonic Safe.  Sonic Safe is a risk-based system that utilizes Hazard Analysis & Critical Control Points (“HACCP”) principles for managing food safety and quality.  Our food safety program includes components to monitor and ensure the safety and quality of Sonic’s products and procedures at every stage of the food preparation and production cycle including, but not limited to, employee training, supplier product inspections and testing and unannounced drive-in food safety

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auditing by independent third parties.  All Sonic Drive-In employees are required to be trained in food safety in their first stage of training, utilizing an internal training program.  This program includes specific training on food safety information and requirements for every station in the drive-in.  We also require our drive-in managers and assistant managers to pass and maintain the ServSafe® certification.  ServSafe® is the most recognized food safety training certification in the restaurant industry.

Information Systems

Sonic Drive-Ins are equipped with information technology systems that are designed to provide operational tools for sales, labor and inventory. This technology includes industry-specific, off-the-shelf systems as well as proprietary software that assist in managing food and beverage costs. These solutions are integrated with our point-of-sale systems to provide information that is important for managers to run efficient and effective operations.  We have centralized financial and accounting systems for Company Drive-Ins.  We also have systems that receive transaction-level data from Franchise Drive-Ins.  We believe these systems are important in analyzing and improving sales and profit margins and accumulating marketing information.  We are also making strategic investments in customer facing digital technologies, including interactive menu boards, a multi-functional mobile app and electronic payment at the stall to enhance the customer’s experience and drive sales.  We are further investing in new point-of-sale systems to improve drive-in level operations and profits. 

Company Operations

Management Structure.  A typical Company Drive-In is operated by a manager, two to four assistant managers, and approximately 25 hourly employees, many of whom work part-time.  The manager has responsibility for the day-to-day operations of the Company Drive-In.  Supervisors oversee several Company Drive-Insand supervise the managers of those drive-ins.  The employee compensation program at Company Drive-Ins for managers and supervisors is comprised of a guaranteed base compensation with additional significant incentive compensation based on drive-in level performance.

Company Drive-In Data.  The following table provides certain financial information relating to Company Drive-Ins and the number of Company Drive-Ins opened, purchased from or sold to franchisees, and closed during the past five fiscal years and should be read in conjunction with the information in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7.

	2015		2014		2013		2012		2011
Average sales per Company Drive-In	$	1,116	$	1,043	$	990	$	958	$	920
(In thousands)
Number of Company Drive-Ins:
Total open at beginning of year		391		396		409		446		455
New Company Drive-Ins		3		3		2		1		3
Purchased from franchisees		3		-		1		-		1
Sold to franchisees		(9)		(7)		-		(35)		(6)
Closed (net of re-openings)		(1)		(1)		(16)		(3)		(7)
Total open at end of year		387		391		396		409		446

Franchise Program

General.  As of August 31, 2015, we had 3,139 Franchise Drive-Ins in operation.  A large number of successful multi-unit franchise groups have developed during the Sonic system’s more than 60 years of operation.  Those franchisees continue to develop new Franchise Drive-Ins either through development agreements or single-site development.  Our franchisees opened 38drive-ins during fiscal year 2015.  We consider our franchisees a vital part of our continued growth and believe our relationship with our franchisees is good.

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Franchise Agreements.  For traditional drive-ins, the current franchise agreement provides for a franchise fee of $45,000 per drive-in, a royalty fee of up to 5% of gross sales on a graduated percentage basis, and a 20-year term.  For fiscal year 2015, Sonic’s average royalty rate was 4.04%.  The franchisee also pays advertising fees of up to 5.9% of gross sales.  

Development Agreements.  We use development agreements to facilitate the planned expansion of the Sonic Drive-In restaurant chain through single and multiple unit development.  During fiscal year 2015, almost all of our new Franchise Drive-In openings occurred as a result of existing development agreements.  Each development agreement gives a developer the exclusive right to construct, own and operate Sonic Drive-Ins within a defined area.  In exchange, each developer agrees to open a minimum number of Sonic Drive-Ins in the area within a prescribed time period. Franchisees who enter into development agreements are required to pay a fee, which is credited against franchise fees due when Sonic Drive-Ins are opened in the future. Franchisees may forfeit such fees and lose their rights to future development if they do not maintain the required schedule of openings. 

Franchise Drive-In Development.  We assist each franchisee in selecting sites and developing Sonic Drive‑Ins.  Each franchisee has responsibility for selecting the franchisee’s drive-in location but must obtain our approval of each Sonic Drive-In design and each location based on accessibility and visibility of the site and targeted demographic factors, including population density, income, age and traffic.  We provide our franchisees with the physical specifications for the typical Sonic Drive-In. 

Franchise Advisory Council.  Our Franchise Advisory Council provides advice, counsel and input to Sonic on important issues impacting the business, such as marketing and promotions, operations, purchasing, building design, human resources, technology and new products.  The Franchise Advisory Council currently consists of 25 members selected by Sonic.  We have seven executive committee members who are selected at large and 18 regional members representing all regions of the country.  We also have four Franchise Advisory Council task groups comprised of 60 members who generally serve three-year terms and provide support on individual key priorities.

Franchise Drive-In Data.  The following table provides certain financial information relating to Franchise Drive-Ins and the number of Franchise Drive-Ins opened, purchased from or sold to Sonic, and closed during Sonic’s last five fiscal years.  The table should be read in conjunction with the information in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7.

	2015		2014		2013		2012		2011
Average sales per Franchise Drive-In	$	1,261	$	1,170	$	1,125	$	1,081	$	1,054
(In thousands)
Number of Franchise Drive-Ins:
Total open at beginning of year		3,127		3,126		3,147		3,115		3,117
New Franchise Drive-Ins		38		37		25		36		40
Sold to the Company		(3)		-		(1)		-		(1)
Purchased from the Company		9		7		-		35		6
Closed (net of re-openings)		(32)		(43)		(45)		(39)		(47)
Total open at end of year		3,139		3,127		3,126		3,147		3,115

Competition

We compete in the restaurant industry, specifically in the segment known as the quick-service restaurant (“QSR”) segment, a highly competitive industry in terms of price, service, location and food quality.  The restaurant industry is often affected by changes in consumer trends, economic conditions, demographics, traffic patterns and concerns about the nutritional content of quick-service foods.  We compete on the basis of distinctive food and service with signature food items, friendly carhops andthe method of food preparation (made-to-order and personalized).  The quality of service, featuring Sonic carhops, constitutes one of our primary marketable points of difference from the competition.  There are many well-established competitors with substantially greater financial and other resources.  These competitors include a large number of national, regional, and local food service establishments, including QSRs, casual-dining restaurants and convenience stores.  A significant change in market conditions or in pricing or other marketing strategies by one or more of Sonic’s competitors could have an adverse impact on Sonic’s sales, earnings

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and growth.  Furthermore, the restaurant industry has few barriers to entry, and new competitors may emerge at any time.  In selling franchises, we compete with many franchisors of QSR and other restaurants, in addition to franchisors of other business opportunities.

Seasonality

Our results during Sonic’s second fiscal quarter (the months of December, January and February) generally are lower than other quarters because of the lower temperatures in the locations of a number of Sonic Drive-Ins, which tends to reduce customer visits to our drive-ins.

Employees

As of August 31, 2015, we had 363full-time corporate employees and approximately 10,500 full-time and part-time restaurant employees.None of our employees are subject to a collective bargaining agreement.  We believe that we have good labor relations with our employees. 

Intellectual Property

Sonic owns or is licensed to use valuable intellectual property including trademarks, service marks, patents, copyrights, trade secrets and other proprietary information, including the “Sonic” logo and trademark, which are of material importance to our business.  Depending on the jurisdiction, trademarks and service marks generally are valid as long as they are used and/or registered. Patents, copyrights and licenses are of varying durations.

Customers

Our business is not dependent upon either a single customer or a small group of customers.

Government Contracts

No portion of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the U.S. government.

Government Regulation

Our restaurants are subject to licensing and regulation by state and local health, safety, fire and other authorities, including licensing requirements and regulations for the sale of food.  The development and construction of new restaurants is subject also to compliance with applicable zoning, land use and environmental regulations.  We are also subject to federal regulation and state laws that regulate the offer and sale of franchises and substantive aspects of the franchisor-franchisee relationship.  Various federal and state labor laws govern our relationship with our employees and affect operating costs.  These laws govern minimum wage requirements, overtime pay, meal and rest breaks, unemployment tax rates, health care and benefits, workers' compensation rates, citizenship or residency requirements, child labor regulations and discriminatory conduct.  Federal, state and local government agencies have established regulations requiring that we disclose to our customers nutritional information regarding our menu items.  We have processes in place to monitor compliance with applicable laws and regulations governing our operations.

Environmental Matters

We are not aware of any federal, state or local environmental laws or regulations that will materially affect our earnings or competitive position or result in material capital expenditures.  However, we cannot predict the effect on operations of possible future environmental legislation or regulations.  During fiscal year 2015, there were no material capital expenditures for environmental control facilities and no such material expenditures are anticipated.

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Available Information

We maintain a website with the address ofwww.sonicdrivein.com.  Copies of the Company’s reports filed with, or furnished to, the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K and any amendments to such reports are available for viewing and copying at such website, free of charge, as soon as reasonably practicable after filing such material with, or furnishing it to, the Securities and Exchange Commission.  In addition, copies of Sonic’s corporate governance materials, including the Corporate Governance Guidelines, Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter, Code of Ethics for Financial Officers and Code of Business Conduct and Ethics are available for viewing and copying at the website, free of charge.

Forward-Looking Information

This Annual Report on Form 10-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in the sections captioned “Business,” “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur.  In some cases, forward-looking statements can be identified by words such as “anticipate,” “estimate,” “expect,”  “goals,” “guidance,”  “plan,”  “may,” “will,”  “would” and similar expressions.  Investors should not place undue reliance on the forward-looking statements, which speak only as of the date of this report.  These forward-looking statements are all based on currently available operating, financial and competitive information and are subject to various risks and uncertainties.  Our actual future results and trends may differ materially depending on a variety of factors including, but not limited to, the risks and uncertainties discussed below.  We undertake no obligation to publicly update or revise them, except as may be required by law.

Item 1A.  Risk Factors

We caution you that our business and operations are subject to a number of risks and uncertainties.  The factors listed below are important factors that could cause our actual results to differ materially from our historical results and from projections in forward-looking statements contained in this report, in our other filings with the Securities and Exchange Commission, in our news releases and in oral statements by our representatives.  However, other factors that we do not anticipate or that we do not consider significant based on currently available information may also have an adverse effect on our results.

Events reported in the media, including social media, such as incidents involving food-borne illnesses or food tampering, whether or not accurate, can cause damage to our reputation and rapidly affect sales and profitability.

Reports, whether true or not, of food-borne illnesses or food tampering have in the past severely injured the reputations of participants in the restaurant industry and could affect us in the future.  The potential for terrorism affecting our nation’s food supply also exists and, if such an event occurs, it could have a negative impact on our brand’s reputation and could severely hurt sales, revenues and profits.  Our ability to remain a trusted brand and increase sales and profits depends on our ability to manage the potential impact on Sonic of food-borne illnesses or reports of food-borne illnesses.  Our food safety and quality assurance program minimizes the risk of food-borne illness.  Nevertheless, these risks cannot be completely eliminated.  Any outbreak of such illness attributed to our restaurants or within the food service industry, or any widespread negative publicity regarding our brand or the restaurant industry in general, could materially harm our brand, including sales and profitability.

The restaurant industry is highly competitive, and that competition could lower our revenues, margins and market share.

The restaurant industry is intensely competitive with respect to price, service, location, personnel, dietary trends, including nutritional content of quick-service foods, and quality of food and is often affected by changes in consumer tastes and preferences, economic conditions, population and traffic patterns.  We compete with international, regional and local restaurants, some of which operate more restaurants and have greater financial resources.  We compete primarily through the quality, price, variety and value of food products offered and our

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distinctive service experience. Other key competitive factors include the number and location of restaurants, speed of service, attractiveness of facilities, effectiveness of advertising and marketing programs and new product development by us and our competitors.  We cannot ensure that we will compete successfully in the restaurant industry on these factors.  In addition, some of our competitors have substantially larger marketing budgets, which may provide them with a competitive advantage.  Our system also competes within the QSR industry not only for customers but also for management and hourly employees, suitable real estate sites, and qualified franchisees.

Changing dietary preferences may cause consumers to avoid our products in favor of alternative foods.

The restaurant industry is affected by consumer preferences and perceptions.  Although we monitor these changing preferences and strive to adapt to meet changing consumer needs, the growth of our brand and, ultimately, system-wide sales depend on the sustained demand for our products.  If dietary preferences and perceptions cause consumers to avoid certain products offered by Sonic Drive-Ins in favor of different foods, demand for our products may be reduced and our business could be harmed.

Our earnings and business growth strategy depends in large part on the success of our franchisees, who exercise independent control of their businesses.

A significant percentage of restaurants are owned and operated by our franchisees.  A portion of our earnings comes from royalties, rents and other amounts paid by our franchisees.  Franchisees are independent businesses, and their employees are not our employees.  We provide training and support to, and monitor the operations of, our franchisees, but the quality of their drive-in operations may be diminished by any number of factors beyond our control.  Franchisees may not successfully operate drive-ins in a manner consistent with our high standards and requirements, and they may not invest in facilities and initiatives as necessary to compete successfully in the restaurant industry.  Franchisees also may fail to properly implement the requirements of the Patient Protection and Affordable Care Act (the “ACA”) enacted in 2010 or may respond to the ACA in a manner that is viewed negatively by employees or consumers.  In addition, franchisees may not hire and train qualified managers and other restaurant personnel and may not adequately plan for and train their own successors.  Consumers could perceive an operational shortcoming of a Franchise Drive-In as a reflection of the entire Sonic brand, thus damaging our reputation and potentially affecting revenues and profitability.

Changes in economic, market and other conditions could adversely affect Sonic and its franchisees, and thereby Sonic’s operating results.

The QSR industry is affected by changes in economic conditions, consumer tastes and preferences and spending patterns, demographic trends, consumer perceptions of food safety, weather, traffic patterns, the type, number and location of competing restaurants and the effects of war or terrorist activities and any governmental responses thereto.  We are also affected by these factors, and the concentration of approximately 35% of our Drive-Ins in Texas and Oklahoma further subjects us to risk particularly if these factors impact those states.  Factors such as interest rates, inflation, gasoline prices, energy costs, food and packaging costs, labor and benefit costs, legal claims and the availability of management and hourly employees also affect restaurant operations and administrative expenses for all Drive-Ins.  Economic conditions, including disruptions in the financial markets, interest rates and other government policies impacting land and construction costs and the cost and availability of borrowed funds, affect our ability and our franchisees’ ability to finance new restaurant development, improvements and additions to existing restaurants, and the acquisition of restaurants from, and sale of restaurants to, franchisees.  Inflation can cause increased food, labor and benefits costs and can increase our operating expenses.  As operating expenses increase, we recover increased costs by increasing menu prices, to the extent permitted by competition and the consumer environment, or by implementing alternative products or processes, or by implementing other cost reduction procedures.  We cannot ensure, however, that we will be able to recover increases in operating expenses in this manner.

Our financial results may fluctuate depending on various factors, many of which are beyond our control.

Our sales and operating results can vary from quarter to quarter and year to year depending on various factors, many of which are beyond our control.  Certain events and factors may directly and immediately decrease demand for our products, and we cannot ensure that we will be able to respond to or address the events and factors

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sufficiently.  If customer demand decreases rapidly, our results of operations, including store-level sales and profits, would also decline precipitously.  These events and factors include:

· sales promotions and product offerings by Sonic and its competitors;

· changes in average same-store sales and customer visits;

· the inability to purchase sufficient levels of media;

· variations in the price, availability and shipping costs of supplies such as food products;

· seasonal effects on demand for Sonic’s products;

· unexpected slowdowns in new drive-in development or franchise agreement renewals;

· changes in competitive conditions;

· changes in economic conditions generally, including consumer spending;

· consumer sensitivity to price and value;

· changes in consumer tastes and preferences;

· changes in the cost of labor; and

· weather and other acts of God.

Shortages or interruptions in the supply or delivery of perishable food products or rapid price increases could adversely affect our operating results.

We are dependent on frequent deliveries of perishable food products that meet certain specifications.  Shortages or interruptions in the supply of perishable food products may be caused by unanticipated demand, problems in production or distribution, acts of terrorism, financial or other difficulties of suppliers, disease or food-borne illnesses, droughts, inclement weather or other conditions.  We source large quantities of food and supplies, which can be subject to significant price fluctuations due to seasonal shifts, climate conditions, industry demand, energy costs, changes in international commodity markets and other factors.  These shortages or rapid price increases could adversely affect the availability, quality and cost of ingredients, which would likely lower revenues and reduce our profitability.

Failure to successfully implement our growth strategy could reduce, or reduce the growth of, our revenue and net income.

We plan to continue to increase the number of Sonic Drive-Ins, but may not be able to achieve our growth objectives, and new drive-ins may not be profitable or provide a sufficient return on investment.  The opening and success of drive-ins depends on various factors, including:

· competition from other restaurants in current and future markets;

· the degree of saturation in existing markets;

· consumer interest in and acceptance of the Sonic brand in existing and new markets;

· the identification and availability of suitable and economically viable locations;

· sales and profit levels at existing drive-ins;

· the negotiation of acceptable lease or purchase terms for new locations;

· permitting and regulatory requirements;

· the cost and availability of construction resources and financing;

· the ability to meet construction schedules;

· the availability of qualified franchisees and their financial and other development capabilities, including their desire and ability to access and commit capital;

· the ability to hire and train qualified management personnel; 

· sufficient marketing efforts;

· weather; and

· general economic and business conditions.

If we are unable to open as many new drive-ins as planned, if the drive-ins are less profitable than anticipated or if we are otherwise unable to successfully implement our growth strategy, revenue and profitability may grow more slowly or even decrease.

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Our outstanding and future leverage could have an effect on our operations.

On May 20, 2011, the Company closed on a securitized financing facility comprised of a $500 million fixed rate term loan and a $100 million variable rate revolving credit facility.  Effective July 22, 2013, we refinanced $155 million of the fixed rate term loan.  As of August 31, 2015, we had outstanding two series of fixed rate notes:  1) $272.9million in debt including accrued interest at an interest rate of 5.4%, with an anticipated repayment date of May 2018, and 2) $155.2 million in debt including accrued interest at an interest rate of 3.75%, with an anticipated repayment date of July 2020.  In addition, as of August 31, 2015, we had $10.5 million in debt including accrued interest under the variable rate note.  Interest on the variable note is based on the one-month London Interbank Offered Rate (“LIBOR”) or Commercial Paper (“CP”), depending on the funding source, plus a  base spread of 3.50%, per annum.  The variable rate note has an anticipated repayment date of May 2018.We believe our current leverage ratio is moderate.  We have historically generated net operating cash flows significantly in excess of our debt service requirements.  In the event that we default on our debt obligations, the following consequences could apply:

· Our flexibility may be reduced in responding to changes in business, industry,regulatory or economic conditions.

· Our ability to obtain additional financing in the future for acquisitions, working capital, capital expenditures and general corporate or other purposes could be impaired or any such financing may not be available on terms favorable to us.

· Any substantial decrease in net operating cash flows or any substantial increase in expenses could make it difficult for us to meet our debt service requirements or force us to modify our operations or sell assets; as a result a substantial portion of our cash flows could be required for debt service and might not be available for our operations or other purposes.

· Unpaid amounts outstanding could become immediately due and payable. 

Sonic Drive-Ins are subject to health, employment, environmental and other government regulations, and failure to comply with existing or future government regulations could expose us to litigation, damage to our reputation and lower profits.

Sonic and its franchisees are subject to various federal, state and local laws affecting their businesses.  The successful development and operation of restaurants depends to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning, land use (including the placement of drive-thru windows), environmental (including litter), traffic and other regulations.  More stringent requirements of local and state governmental bodies with respect to zoning, land use and environmental factors could delay, prevent or make cost prohibitive the continuing operations of an existing restaurant or the development of new restaurants in particular locations.  Restaurant operations are also subject to licensing and regulation by state and local departments relating to health, food preparation, sanitation and safety standards, federal and state labor and immigration laws (including applicable minimum wage requirements, overtime, working and safety conditions and work authorization requirements), federal and state laws prohibiting discrimination and other laws regulating the design and operation of facilities, such as the Americans with Disabilities Act.  If we fail to comply with any of these laws, we may be subject to governmental action or litigation, and our reputation could be accordingly harmed.  Injury to our reputation would, in turn, likely reduce revenues and profits.

In recent years, there has been an increased legislative, regulatory and consumer focus on nutrition and advertising practices in the food industry, particularly among restaurants.  As a result, we have and will become subject to regulatory initiatives in the area of nutritional content, disclosure and advertising, such as requirements to provide information about the nutritional content of our food products, which could increase expenses.  The operation of our franchise system is also subject to franchise laws and regulations enacted by a number of states and rules promulgated by the U.S. Federal Trade Commission.  Any future legislation or legal changes regarding franchise relationships may negatively affect our operations, particularly our relationship with our franchisees and may increase our potential liability for franchisee practices and our costs.  Failure to comply with new or existing franchise laws and regulations in any jurisdiction or to obtain required government approvals could result in a ban or temporary suspension on future franchise sales.  Changes in applicable accounting rules imposed by governmental regulators or private governing bodies could also affect our reported results of operations.

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We are subject to the Fair Labor Standards Act, which governs such matters as minimum wage, overtime and other working conditions, along with the Americans with Disabilities Act, various family leave mandates and a variety of other laws enacted, or rules and regulations promulgated, by federal, state and local governmental authorities that govern these and other employment matters.  We have experienced and expect further increases in payroll expenses as a result of government-mandated increases in the minimum wage and future increases may be material.  Enactment and enforcement of various federal, state and local laws, rules and regulations on immigration and labor organizations may adversely impact the availability and costs of labor for our restaurants in a particular area or across the United States.  In addition, our vendors may be affected by higher minimum wage standards or availability of labor, which may increase the price of goods and services they supply to us. 

We have implemented various aspects of the ACA in our business.  There are no assurances that a combination of cost management and price increases can accommodate all of the costs associated with compliance.  

Litigation from customers, franchisees, employees and others could harm our reputation and impact operating results.

Our legal and regulatory environment exposes us to complex compliance and litigation risk.  Claims of illness or injury relating to food content, food quality or food handling are common in the QSR industry, as are intellectual property claims (including often aggressive or opportunistic attempts to enforce patents used in information technology systems).  In addition, class action lawsuits have been filed, and may continue to be filed, against various QSRs alleging, among other things, that QSRs have failed to disclose the health risks associated with foods we serve and that QSR marketing practices have encouraged obesity and other health issues.  There are also litigation and compliance risks and costs associated with privacy, consumer data protection and similar laws, particularly as they apply to children, as well as laws related to the collection and use of consumer, employee and franchisee data.  We additionally may be subject to employee, franchisee and other claims in the future based on, among other things, discrimination, harassment, wrongful termination and wage, rest break and meal break issues, including those relating to overtime compensation.  Litigation, as well as regulatory and legal changes, involving our relationship with our franchisees and the legal distinction between our franchisees and us for employment law purposes, if determined adversely, could increase costs, negatively impact the business prospects of our franchisees and subject us to incremental liability for their actions.  In addition to decreasing our sales and profitability and diverting management resources, adverse publicity or a substantial judgment against us could negatively impact our reputation, hindering the ability to attract and retain qualified franchisees and grow the business.

We may not be able to adequately protect our intellectual property, which could decrease the value of our brand and products.

The success of our business depends on the continued ability to use existing trademarks, service marks and other components of our brand in order to increase brand awareness and further develop branded products.  All of the steps we have taken to protect our intellectual property may not be adequate. 

Our reputation and business could be materially harmed as a result of data breaches.

Unauthorized intrusion into portions of our computer systems and networks or those of our franchisees that transmit, process and store information related to our customers and their transactions and to employees may result in the theft of data.  We rely on proprietary and commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential customer information, such as payment card and personal information, as well as employee information.  Improper activities by thirdparties, advances in computer and software capabilities and encryption technology, new tools and discoveries and other events or developments may facilitate or result in a compromise or breach of our or our franchisees’ computer systems and networks.  Any such compromises or breaches could cause interruptions in our operations and damage to our reputation, subject us to costs and liabilities and hurt sales, revenues and profits. 

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Unreliable or inefficient drive-in technology, lack of support for drive-in technology and failure to successfully implement technology initiatives could adversely impact operating results.

We rely on proprietary and commercially available technologies at our drive-ins, including point-of-sale and payment card systems.  We rely on this technology not only to efficiently operate our drive-ins but also to drive sales growth and margin improvement.  Our strategic technology initiatives may not be timely or effectively implemented or adequately resourced or may not achieve the desired results.  Certain technology networks and systems may also be unreliable or inefficient, and the technology vendors may limit or terminate product support and maintenance, which could impact the reliability of critical systems supporting drive-in operations.  Additionally, replacement parts and support and maintenance skills may become scarce, cost prohibitive or non-existent.  Any such deficiencies could impact sales and profitability by disrupting our operations, damaging our reputation or subjecting us to excessive costs and liabilities.

Ownership and leasing of significant amounts of real estate exposes us to possible liabilities and losses.

We own or lease the land and building for all Company Drive-Ins.  Accordingly, we are subject to all of the risks associated with owning and leasing real estate.  In particular, the value of our assets could decrease and our costs could increase because of changes in the investment climate for real estate, demographic trends and supply or demand for the use of our drive-ins, which may result from competition from similar restaurants in the area, as well as liability for environmental conditions.  We generally cannot cancel the leases, so if an existing or future Sonic Drive-In is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying rent for the balance of the lease term.  In addition, as each of the leases expires, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close drive-ins in desirable locations.

Catastrophic events may disrupt our business.

Unforeseen events, or the prospect of such events, including war, terrorism and other domestic or international conflicts, public health issues, including health epidemics or pandemics, and natural disasters such as hurricanes, earthquakes or other adverse weather and climate conditions, whether occurring in the United States or abroad, could disrupt our operations, disrupt the operations of franchisees, suppliers or customers, or result in political or economic instability.  These events could reduce demand for our products or make it difficult or impossible to receive products from suppliers.

Item 1B.  Unresolved Staff Comments

None.

Item 2.  Properties

Of the 387Company Drive-Ins operating as of August 31, 2015, we operated 174 of them on property leased from third parties and213of them on property we own.  The leases expire on dates ranging from 2015 to 2030, with the majority of the third-party leases providing for renewal options.  All third-party leases provide for specified monthly rental payments and/or rentals based on sales volume.  Most leases require Sonic to maintain the property and pay the cost of insurance and taxes.  We also own and lease 154 properties and sublease 46properties to franchisees and other parties.  These leases with franchisees expire on dates ranging from 2015 to 2030, with the majority of the leases providing for renewal options.  The majority of the leases for Franchise Drive-Ins provide for percentage rent based on sales volume, with a minimum base rent.  These leases generally require the franchisee to maintain the property and pay the costs of insurance and taxes.  Virtually all of our owned properties are pledged as collateral under the terms of our securitized financing facility, as described under “Liquidity and Sources of Capital” in Part II, Item 7.

Our corporate headquarters is located in Oklahoma City.  We have an existing lease to occupy approximately 96,300square feet.  This lease expires in November 2023 and has two five-year renewal options.  Sonic believes its properties are suitable for the purposes for which they are being used.

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Item 3.  Legal Proceedings

The Company is involved in various legal proceedings and has certain unresolved claims pending.  Based on the information currently available, management believes that all claims currently pending are either covered by insurance or would not have a material adverse effect on the Company’s business or financial condition.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 4A.  Executive Officers of the Company

Identification of Executive Officers

The following table identifies the executive officers of the Company:

Name	Age	Position	Executive Officer Since
J. Clifford Hudson	60	Chairman of the Board of Directors, Chief Executive Officer and President	1985
Claudia S. San Pedro	46	Executive Vice President and Chief Financial Officer	2007
John H. Budd III	48	Senior Vice President and Chief Development and Strategy Officer	2013
Craig J. Miller	54	Senior Vice President and Chief Information Officer of Sonic Industries Services Inc.	2011
Todd W. Smith	38	Senior Vice President and Chief Marketing Officer	2014
Paige S. Bass	46	Senior Vice President, General Counsel and Assistant Corporate Secretary	2007
Harold A. Ceron	40	President of Sonic Restaurants, Inc.	2015
Michelle E. Britten	48	Vice President and Controller	2012
Carolyn C. Cummins	57	Vice President of Compliance and Corporate Secretary	2004
Corey R. Horsch	37	Vice President of Investor Relations and Treasurer	2015

Business Experience

The following sets forth the business experience of the executive officers of the Company for at least the past five years:

J. Clifford Hudson has served as the Company’s Chairman of the Board since January 2000 and Chief Executive Officer since April 1995.  Mr. Hudson served as President of the Company from April 1995 to January 2000 and reassumed that position from November 2004 until May 2008 and again in April 2013 to the present.  He has served in various other offices with the Company since 1984.  Mr. Hudson has served as a Director of the Company since 1993.  Mr. Hudson has served on the Board of Trustees of the Ford Foundation since January 2006.

Claudia S. San Pedro has served as the Company’s Executive Vice President and Chief Financial Officer since August 2015.   She served as Senior Vice President and Chief Financial Officer from April 2015 until August 2015.   Ms. San Pedro served as Vice President of Investor Relations and Communications of the Company from

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January 2013 until April 2015 and was its Vice President of Investor Relations from July 2010 until January 2013.  She served as Vice President of Investor Relations and Brand Strategies from October 2009 until July 2010.  Ms. San Pedro has also served as Treasurer of the Company from January 2007 until October 2015.  She served as the Director of the Oklahoma Office of State Finance from June 2005 through November 2006.  From July 2003 to May 2005, Ms. San Pedro served as the Budget Division Director for the Oklahoma Office of State Finance.

John H. Budd III has served as Senior Vice President and Chief Development and Strategy Officer since joining the Company in August 2013.  Mr. Budd served in several progressive positions for Boston Consulting Group from 1997 until joining Sonic.  His most recent position with Boston Consulting Group was Partner and Managing Director.  

Craig J. Miller has served as Senior Vice President and Chief Information Officer of Sonic Industries Services Inc. since January 2010.  He served as the Executive Vice President and Chief Information Officer for MovieGallery, Inc., also known as Hollywood Video, from September 2008 until September 2009.  In February 2010, Movie Gallery, Inc. filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. Mr. Miller was Senior Vice President of Shared Information Services for Bank of America from February 2005 until July 2008.

Todd W. Smith has served as Senior Vice President and Chief Marketing Officer since April 2015.  Mr. Smith served as Vice President and Chief Marketing Officer of the Company from April 2014 to April 2015 and was Vice President of Marketing from April 2012 until April 2014.  Mr. Smith was director of marketing and menu innovation for Wendy’s International from December 2009 to April 2012.  He was employed by Yum! Brands (KFC) in various brand marketing roles from January 2006 to November 2009.

Paige S. Bass has served as Senior Vice President and General Counsel of the Company since October 2014 and served as Vice President and General Counsel of the Company from January 2007 until October 2014. She has also served as Assistant Corporate Secretary since October 2008.  Ms. Bass joined the Company as Associate General Counsel in 2004.  Prior to joining the Company, Ms. Bass was employed as an associate with the law firm of Crowe & Dunlevy in Oklahoma City, Oklahoma.

Harold A. Ceron has served as President of Sonic Restaurants, Inc. since September 2015.  Mr. Ceron served as Senior Vice President of Operations of Sonic Restaurants, Inc. from July 2014 until September 2015.  Prior to joining the Company, Mr. Ceron served as the Managing Director, Europe and Latin America, of 7-Eleven from April 2013 until June 2014 and as the Director of Global Business Development for 7-Eleven from August 2012 until June 2014.  He served as the Director of Global Operations, KFC for Yum! Brands from August 2010 until June 2012.  Prior to August 2010, Mr. Ceron worked for an additional 17 years with Yum! Brands in its Pizza Hut operations in various positions of increasing responsibility, lastly as Franchise Business Leader, Caribbean and Latin America.

Michelle E. Britten has served as Vice President and Controller of the Company since November 2012.  She served as Senior Director of Corporate Accounting from April 2009 until November 2012 and as Senior Director of SEC Reporting from January 2007 until April 2009.  Ms. Britten joined the Company in 2005 as its Director of SEC Reporting.

Carolyn C. Cummins has served as the Company’s Corporate Secretary since January 2007 and as the Company’s Vice President of Compliance since April 2004.  Ms. Cummins joined the Company as Assistant General Counsel in 1999. 

Corey R. Horsch has served as Vice President of Investor Relations and Treasurer of the Company since October 2015.  Mr. Horsch served as a Portfolio Manager with Surveyor Capital from May 2011 until September 2015.  He served as a Senior Research Analyst with Luther King Capital Management from June 2006 until April 2011.  Prior to June 2006, Mr. Horsch worked for almost six years with Credit Suisse in various positions of increasing responsibility, the most recent of which was Vice President, Senior U.S. Equity Research Analyst.

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PART II

Item 5.  Market for the Company’sCommon Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

The Company’s common stock trades on NASDAQ under the symbol “SONC.” The following table sets forth the high and low sales price for the Company’s common stock during each fiscal quarter within the two most recent fiscal years as reported on NASDAQ. 

Fiscal Year Ended					Fiscal Year Ended
August 31, 2015	High		Low		August 31, 2014	High		Low
First Quarter	$	27.88	$	21.10	First Quarter	$	20.28	$	15.64
Second Quarter	$	33.15	$	25.91	Second Quarter	$	21.48	$	16.92
Third Quarter	$	36.73	$	28.53	Third Quarter	$	23.56	$	18.61
Fourth Quarter	$	34.23	$	24.86	Fourth Quarter	$	23.74	$	20.25

Stockholders

As of October 15, 2015, the Company had 656record holders of its common stock.  

Dividends

In August 2014, the Company initiated a quarterly cash dividend program and paid a quarterly dividend of $0.09 per share of common stock, totaling $18.8 million for the fiscal year.  Subsequent to the end of the fiscal year, the Company declared a quarterly dividend of $0.11 per share of common stock to be paid to stockholders of record as of the close of business on November 11, 2015, with a payment date of November 20, 2015.  The Company did not pay any cash dividends on its common stock prior to fiscal 2015.  The future declaration of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of the Company’s Board of Directors. 

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Issuer Purchases of Equity Securities

Shares repurchased during the fourth quarter of fiscal 2015 are as follows (in thousands, except per share amounts): 

				Total Number
				of Shares	Maximum Dollar
				Purchased as	Value that May
	Total	Average		Part of Publicly	Yet Be
	Number of	Price		Announced	Purchased
	Shares	Paid per		Plans or	Under the
Period	Purchased	Share		Programs	Program(1)
June 1, 2015 through June 30, 2015(2)	448	$	29.01	448	$	4,900
July 1, 2015 through July 31, 2015	170		28.76	170		3
August 1, 2015 through August 31, 2015	664		28.23	664		126,259
Total	1282			1282
—————

(1)In August 2014, the Company’s Board of Directors extended the Company’s share repurchase program by authorizing the Company to purchase up to $105 million of its outstanding shares of common stock in fiscal year 2015.  In August 2015, the Company’s Board of Directors further extended the Company’s share repurchase program by authorizing the Company to purchase up to an additional $145million of its outstanding shares of common stock throughfiscal year 2016.  Share repurchases will be made from time to time in the open market or otherwise, including through an accelerated share repurchase program (“ASR”), under terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions.  The share repurchase program may be extended, modified, suspended or discontinued at any time.

(2)  The total number of shares purchased for the period of June 1, 2015 through June 30, 2015 includes the delivery of approximately 0.3 million shares related to the completion of the ASR initiated in February 2015.  The program required an up-front payment in February 2015and there was no additional cost at completion of the ASR, thus these shares are not included in the calculation of average price per share for the respective period.  For additional information on this program see Note 13 – Stockholders’ Equity.

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Item 6.  Selected Financial Data

The following table sets forth selected financial data regarding the Company’s financial condition and operating results.  One should read the following information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below in Part II, Item 7, and the Company’s Consolidated Financial Statements included elsewhere in this report.

Selected Financial Data
(In thousands, except per share data)
		Fiscal year ended August 31,
	2015		2014		2013		2012		2011
Income Statement Data:
Company Drive-In sales	$	436,031	$	405,363	$	402,296	$	404,443	$	410,820
Franchise Drive-Ins:
Franchise royalties and fees		161,342		138,416		130,737		128,013		125,871
Lease revenue		5,583		4,291		4,785		6,575		6,023
Other		3,133		4,279		4,767		4,699		3,237
Total revenues		606,089		552,349		542,585		543,730		545,951
Cost of Company Drive-In sales		363,938		342,109		343,209		347,470		356,236
Selling, general and administrative		79,336		69,415		66,022		65,173		64,943
Depreciation and amortization		45,892		42,210		40,387		41,914		41,225
Provision for impairment of long-lived assets		1,440		114		1,776		764		824
Other operating (income) expense, net		(945)		(176)		1,943		(531)		(585)
Total expenses		489,661		453,672		453,337		454,790		462,643
Income from operations		116,428		98,677		89,248		88,940		83,308
Interest expense, net(1)		24,706		24,913		32,949		30,978		54,929
Income before income taxes		91,722		73,764		56,299		57,962		28,379
Net income-attributable to Sonic Corp.	$	64,485	$	47,916	$	36,701	$	36,085	$	19,225
Income per share:
Basic	$	1.23	$	0.87	$	0.65	$	0.60	$	0.31
Diluted	$	1.20	$	0.85	$	0.64	$	0.60	$	0.31
Weighted average shares used in calculation:
Basic		52,572		55,164		56,384		60,078		61,781
Diluted		53,953		56,619		57,191		60,172		61,943
Cash dividends declared per common share(2)	$	0.27	$	0.09	$	-	$	-	$	-
Balance Sheet Data:
Working capital	$	(2,383)	$	16,201	$	67,792	$	26,635	$	22,178
Property, equipment and capital leases, net		421,406		441,969		399,661		443,008		464,875
Total assets		620,024		650,972		660,794		680,760		679,742
Obligations under capital leases
(including current portion)		24,440		26,743		26,864		31,676		34,063
Long-term debt (including current portion)		438,028		437,318		447,294		481,793		497,013
Stockholders’ equity		17,433		62,675		77,464		59,247		51,833
—————————

(1)  Includes net loss from early extinguishment of debt of $4.4 million and $23.0 millionfor fiscal years 2013 and 2011, respectively.

(2)  The first quarter dividend for fiscal year 2015 was declared in the fourth quarter of fiscal year 2014.

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Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Description of the Business.  Sonic operates and franchises the largest chain of drive-in restaurants in the United States.  As of August 31, 2015, the Sonic system was comprised of 3,526 drive-ins, of which 11% were Company Drive-Ins and 89% were Franchise Drive-Ins.  Sonic’s signature food items include specialty drinks (such as cherry limeades and slushes), ice cream desserts, made-to-order sandwiches and hamburgers, a variety of hot dogs including six-inch premium beef hot dogs and footlong quarter pound coneys, hand-battered onion rings, tater tots and wraps.  Sonic Drive-Ins also offer breakfast items that include a variety of breakfastburritos and serve the full menu all day.  We derive our revenues primarily from Company Drive-In sales and royalties from franchisees.  We also receive revenues from leasing real estate to franchisees, franchise fees, earnings from minority investments in franchise operations and other miscellaneous revenues.

Costs of Company Drive-In sales relate directly to Company Drive-In sales.  Other expenses, such as depreciation, amortization and general and administrative expenses, relate to our franchising operations, as well as Company Drive-In operations.  Our revenues and Company Drive-In expenses are directly affected by the number and sales volumes of Company Drive-Ins.  Our revenues and, to a lesser extent, selling, general and administrativeexpenses also are affected by the number and sales volumes of Franchise Drive-Ins.  Franchise royalties and franchise fees are directly affected by the number of operating Franchise Drive-Ins andnew drive-in openings.  Lease revenues are generated primarily by the leasing of land and buildings for Company Drive-In operations that have been sold to franchisees.

Overview of Business Performance.System-wide same-store sales increased 7.3% during fiscal year 2015 as compared to an increase of 3.5% for fiscal year 2014.  Same-store sales at Company Drive-Ins increased by 6.9% during fiscal year 2015 as compared to an increase of 3.5% for fiscal year 2014.  Our continued positive same-store sales are a result of the successful implementation of initiatives, including product quality improvements and innovation, a greater emphasis on personalized service, a tiered pricing strategy and a media strategy, that have set a solid foundation for growth.  Along with new technology initiatives implemented in Company Drive-Ins during fiscal 2014, we continue to focus on key initiatives such as product innovation, multi-day-part promotions and effective media to drive same-store sales.  All of these initiatives drive Sonic’s multi-layered growth strategy, which incorporates same-store sales growth, operating leverage, deployment of cash, an ascending royalty rate and new drive-in development.  Positive same-store sales is the most important layer and drives operating leverage and increased operating cash flows.

Revenues increased to $606.1 million for fiscal year 2015 or 9.7% from $552.3 million for the same period last year, which was primarily due to an increase in Franchise Drive-In royalties and Company Drive-In sales driven by the growth of same-store sales.  Franchising revenues increased $24.2 million during fiscal year 2015 or 17.0%, reflecting an increase in royalties related to a license conversion increasing royalty rates for approximately 900 Franchise Drive-Ins, as well as positive same-store sales of 7.3% at Franchise Drive-Ins.  Restaurant margins at Company Drive-Ins improved by 90 basis points during fiscal year 2015, reflecting the leverage of positive same-store sales, lower commodity costs in the latter half of the fiscal year and improved inventory management. 

Net income and diluted earnings per share for fiscal year 2015 were $64.5 million and $1.20, respectively, as compared to net income of $47.9 million or $0.85 per diluted share for fiscal year 2014.  Excluding the non‑GAAP adjustments further described below, net income per diluted share was $1.10 for fiscal year 2015, compared to $0.84 per diluted share in fiscal year 2014.

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The following analysis of non-GAAP adjustments is intended to supplement the presentation of the Company’s financial results in accordance with GAAP. We believe the exclusion of these items in evaluating the change in net income and diluted earnings per share for the periods below provides useful information to investors and management regarding the underlying business trends and the performance of our ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results for the Company and predicting future performance.

	Fiscal year ended				Fiscal year ended
	August 31, 2015				August 31, 2014
	Net		Diluted		Net		Diluted
	Income		EPS		Income		EPS
Reported – GAAP	$	64,485	$	1.20	$	47,916	$	0.85
Federal tax benefit of prior-year statutory tax deduction		(3,199)		(0.06)		-		-
Change in deferred tax valuation allowance		(1,701)		(0.04)		-		-
Retroactive effect of federal tax law change		612		0.01		-		-
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters		(666)		(0.01)		-		-
Benefit from the IRS's acceptance of a federal tax method change		-		-		(484)		(0.01)
Adjusted - Non-GAAP	$	59,531	$	1.10	$	47,432	$	0.84
—————————

	Fiscal year ended				Fiscal year ended
	August 31, 2014				August 31, 2013
	Net		Diluted		Net		Diluted
	Income		EPS		Income		EPS
Reported – GAAP	$	47,916	$	0.85	$	36,701	$	0.64
Benefit from the IRS's acceptance of a federal tax method change		(484)		(0.01)
After-tax loss from early extinguishment of debt						2,798		0.05
Retroactive tax benefit of WOTC and resolution of tax matters						(743)		(0.02)
After-tax loss on closure of Company Drive-Ins(1)						1,510		0.03
After-tax impairment charge for point-of-sale assets(2)						1,013		0.02
Adjusted - Non-GAAP	$	47,432	$	0.84	$	41,279	$	0.72
—————————

(1)  Loss of $2.4 million on the closure of 12 lower-performing Company Drive-Ins as a result of an assessment in advance of capital expenditures for planned technology initiatives.

(2)  Impairment charge of $1.6 million related to the write-off of assets associated with a change in the vendor for the Sonic system’s new point-of-sale technology.

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The following table provides information regarding the number of Company Drive-Ins and Franchise Drive-Ins operating as of the end of the years indicated as well as the system-wide change in sales and average unit volume.  System-wide information includes both Company Drive-In and Franchise Drive-In information, which we believe is useful in analyzing the growth of the brand as well as the Company’s revenues, since franchisees pay royalties based on a percentage of sales.

System-wide Performance
($ in thousands)
	Fiscal year ended August 31,
	2015			2014			2013
Increase in total sales		8.3	%		3.9	%		2.4	%
System-wide drive-ins in operation(1):
Total at beginning of year		3,518			3,522			3,556
Opened		41			40			27
Closed (net of re-openings)		(33)			(44)			(61)
Total at end of year		3,526			3,518			3,522
Average sales per drive-in	$	1,244		$	1,153		$	1,109
Change in same-store sales(2)		7.3	%		3.5	%		2.3	%
—————————

(1) Drive-ins that are temporarily closed for various reasons (repairs, remodeling, relocations, etc.) are not considered closed unless the Company determines that they are unlikely to reopen within a reasonable time.

(2) Represents percentage change for drive-ins open for a minimum of 15 months.

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Results of Operations

Revenues.  The following table sets forth the components of revenue for the reported periods and the relative change between the comparable periods.

Revenues
($ in thousands)
	Fiscal year ended						Percent
	August 31,				Increase		Increase
	2015		2014		(Decrease)		(Decrease)
Revenues:
Company Drive-In sales	$	436,031	$	405,363	$	30,668	7.6	%
Franchise Drive-Ins:
Franchise royalties		158,813		137,125		21,688	15.8
Franchise fees		2,529		1,291		1,238	95.9
Lease revenue		5,583		4,291		1,292	30.1
Other		3,133		4,279		(1,146)	(26.8)
Total revenues	$	606,089	$	552,349	$	53,740	9.7	%
	Fiscal year ended						Percent
	August 31,				Increase		Increase
		2014		2013	(Decrease)		(Decrease)
Revenues:
Company Drive-In sales	$	405,363	$	402,296	$	3,067	0.8	%
Franchise Drive-Ins:
Franchise royalties		137,125		130,009		7,116	5.5
Franchise fees		1,291		728		563	77.3
Lease revenue		4,291		4,785		(494)	(10.3)
Other		4,279		4,767		(488)	(10.2)
Total revenues	$	552,349	$	542,585	$	9,764	1.8	%

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The following table reflects the changes in sales and same-store sales at Company Drive-Ins.  It also presents information about average unit volumes and the number of Company Drive-Ins, which is useful in analyzing the growth of Company Drive-In sales.

Company Drive-In Sales
($ in thousands)
	Fiscal year ended August 31,
		2015			2014			2013
Company Drive-In sales		$	436,031		$	405,363		$	402,296
Percentage increase (decrease)			7.6	%		0.8	%		(0.5)	%
Company Drive-Ins in operation(1):
Total at beginning of year			391			396			409
Opened			3			3			2
Acquired from (sold to) franchisees, net			(6)			(7)			1
Closed (net of re-openings)			(1)			(1)			(16)
Total at end of year			387			391			396
Average sales per Company Drive-In		$	1,116		$	1,043		$	990
Change in same-store sales(2)			6.9	%		3.5	%		2.5	%
—————————

(1)Drive-ins that are temporarily closed for various reasons (repairs, remodeling, relocations, etc.) are not considered closed unless the Company determines that they are unlikely to reopen within a reasonable time.

(2)Represents percentage change for drive-ins open for a minimum of 15 months.

Same-store sales for Company Drive-Ins increased 6.9% for fiscal year 2015 and 3.5% for fiscal year 2014, showing continued momentum from the Company’s successful implementation of initiatives to improve product quality, service and value perception.  Furthermore, we continued to focus on our innovative product pipeline, multi-day-part promotions and increased media effectiveness while implementing new technology initiatives.  Company Drive-In sales increased $30.7 million, or 7.6%, during fiscal year 2015 compared to fiscal year 2014.  This improvement was primarily attributable to an increase of $27.4 million in same-store sales and $3.3 million in incremental sales from new drive-in openings.

For fiscal year 2014, Company Drive-In sales increased  $3.1 million, or 0.8%, as compared to 2013.  This improvement was primarily attributable to an increase of $14.4 million in same-store sales and $2.0 million in incremental sales from new drive-in openings.  These increases were partially offset by an  $8.9 million sales decrease primarily related to the closure of 12 lower-performing drive-ins on August 31, 2013 and a $4.4 million decrease related to the refranchising of seven drive-ins during the first quarter of fiscal year 2014.

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The following table reflects the change in franchise sales, the number of Franchise Drive-Ins, average unit volumes and franchising revenues.  While we do not record Franchise Drive-In sales as revenues, we believe this information is important in understanding our financial performance since these sales are the basis on which we calculate and record franchise royalties.  This information is also indicative of the financial health of our franchisees.

Franchise Information
($ in thousands)
	Fiscal year ended August 31,
	2015			2014			2013
Franchise Drive-In sales	$	3,931,365		$	3,627,395		$	3,479,880
Percentage increase		8.4	%		4.2	%		2.8	%
Franchise Drive-Ins in operation(1):
Total at beginning of year		3,127			3,126			3,147
Opened		38			37			25
Acquired from (sold to) the Company, net		6			7			(1)
Closed (net of re-openings)		(32)			(43)			(45)
Total at end of year		3,139			3,127			3,126
Average sales per Franchise Drive-In	$	1,261		$	1,170		$	1,125
Change in same-store sales(2)		7.3	%		3.5	%		2.3	%
Franchising revenues(3)	$	166,925		$	142,707		$	135,522
Percentage increase (decrease)		17.0	%		5.3	%		0.7	%
Effective royalty rate(4)		4.04	%		3.78	%		3.74	%
—————————

(1) Drive-ins that are temporarily closed for various reasons (repairs, remodeling, relocations, etc.) are not considered closed unless the Company determines that they are unlikely to reopen within a reasonable time.

(2)  Represents percentage change for drive-ins open for a minimum of 15 months.

(3)  Consists of revenues derived from franchising activities, including royalties, franchise fees and lease revenues. See Revenue Recognition Related to Franchise Fees and Royalties in the Critical Accounting Policies and Estimates section of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Form 10-K.

(4)  Represents franchise royalties as a percentage of Franchise Drive-In sales.

Same-store sales for Franchise Drive-Ins increased 7.3% for fiscal year 2015 and 3.5% for fiscal year 2014, showing continued momentum from the initiatives we have implemented to improve product quality, service and value perception.  Furthermore, we continued to focus on our innovative product pipeline, multi-day-part promotions and increased media effectiveness.  Franchising revenues increased $24.2 million, or 17.0%, for fiscal year 2015 compared to fiscal year 2014.  The increase in franchising revenues was driven by a license conversion increasing royalty rates for approximately 900 Franchise Drive-Ins, as well as a 7.3% increase in same-store sales.  Lease revenues increased compared to the prior year due to an increase in same-store sales and the addition of 14 new leases.  The effective royalty rate increased compared to fiscal year 2014 as a result of the license conversion discussed above, as well as improved same-store sales.

Franchising revenues increased $7.2 million, or 5.3%, for fiscal year 2014 as compared to fiscal year 2013.  The increase in franchising revenues was driven by an increase in franchise royalties primarily attributable to a 3.5% increase in same-store sales and an increase in franchise fees from the increase in Franchise Drive-In openings.  Lease revenues decreased compared to the prior year due to a franchisee’s purchase during the second quarter of fiscal year 2013 of land and buildings leased or subleased from the Company.  The effective royalty rate increased slightly compared to fiscal year 2013 primarily as a result of improved same-store sales.

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Other revenues decreased $1.2million to $3.1 in fiscal year 2015 and decreased $0.5 million to $4.3million in fiscal year 2014 as compared to the prior year.  The decrease in fiscal years 2015 and 2014 was primarily due to changes in minority investments in franchise operations. 

Operating Expenses.  The following table presents the overall costs of drive-in operations as a percentage of Company Drive-In sales.  Other operating expenses include direct operating costs such as marketing, telephone and utilities, repair and maintenance, rent, property tax and other controllable expenses.

Company Drive-In Margins
	Fiscal year ended August 31,				Percentage Points
	2015		2014		Increase (Decrease)
Costs and expenses:
Company Drive-Ins:
Food and packaging	27.9	%	28.7	%	(0.8)
Payroll and other employee benefits	34.8		34.5		0.3
Other operating expenses	20.8		21.2		(0.4)
Cost of Company Drive-In sales	83.5	%	84.4	%	(0.9)
	Fiscal year ended August 31,				Percentage Points
	2014		2013		Increase (Decrease)
Costs and expenses:
Company Drive-Ins:
Food and packaging	28.7	%	28.5	%	0.2
Payroll and other employee benefits	34.5		35.4		(0.9)
Other operating expenses	21.2		21.4		(0.2)
Cost of Company Drive-In sales	84.4	%	85.3	%	(0.9)

Drive-in level margins improved by 90 basis points during fiscal year 2015 reflecting leverage from improved same-store sales.  Food and packaging costs were favorable by 80 basis points, which reflected lower commodity costs primarily related to dairy,as well as implementation of an inventory management tool.  Payroll and other employee benefits were unfavorable by 30 basis points reflecting increased health care expenses and increased incentive compensation related to growth in same-store sales.  Other operating expenses improved 40 basis points mainly as a result of leveragefrom sales growth.

Drive-in level margins improved by 90 basis points during fiscal year 2014 reflecting leverage from improved same-store sales and, to a lesser extent, the closure of 12 lower-performing Company Drive-Ins on August 31, 2013.  Food and packaging costs were slightly unfavorable by 20 basis points, which primarily resulted from increased costs in beef and dairy that were partially offset by menu price increases in the second half of the fiscal year.  Payroll and other employee benefits, as well as other operating expenses,improved 110 basis points mainly as a result of leveraging improved sales and the closure of lower-performing Company Drive-Ins discussed above.

Selling, General and Administrative (“SG&A”).  SG&A expenses increased 14.3% to $79.3 million for fiscal year 2015, and increased5.1% to $69.4 million during fiscal year 2014 as compared to fiscal year 2013.  These increases in SG&A expense for fiscal years 2015 and 2014 were primarily related to the costs of additional headcount in support of the Company’s technology initiatives and higher variable compensation due to strong operating performance.

Depreciation and Amortization.Depreciation and amortization expense increased8.7% to $45.9 million in fiscal year 2015. The increase during fiscal year 2015 was primarily attributable to our increased investment in technology initiatives at Company Drive-Ins.  Depreciation and amortization expense increased4.5% to $42.2 million in fiscal year 2014. The increase during fiscal year 2014 was primarily attributable to our increased

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investment in technology initiatives at Company Drive-Ins partially offset by a franchisee’s purchase, during the second fiscal quarter of 2013, of land and buildings previously leased or subleased from the Company.

Provision for Impairment of Long-Lived Assets.  Provision for impairment of long-lived assets increased $1.3 million to $1.4 million in fiscal year 2015 compared to $0.1 million for fiscal year 2014 and $1.8million for 2013.  Theincrease in fiscal year 2015 was the result of the $1.3 million impairment charge in fiscal year 2015 for the write-off of assets associated with some lower performing drive-ins.  The decrease in fiscal year 2014 was primarily the result of the $1.6 million impairment charge in fiscal year 2013 for the write-off of assets associated with a change in the vendor for the Sonic system’s point-of-sale technology.

Other Operating Income and Expense, Net.  Fiscal year 2015 reflected $0.9 million in other operating income compared to other operating income of $0.2 million for fiscal year 2014 and other operating net expense of $1.9 million for fiscal year 2013.   The $2.1 million change for fiscal year 2014 was primarily the result ofthe loss recorded on the closure of 12lower-performing Company Drive‑Ins at the end of fiscal year 2013.

Net Interest Expense.  Net interest expense decreased $0.2 million in fiscal year 2015 and $3.6 million in fiscal year 2014.  The decrease in fiscal year 2014 was primarily related to a decline in our weighted-average interest rate attributable to our partial debt refinancing completed in the fourth quarter of fiscal year 2013 and a decline in our long-term debt balance.  See “Liquidity and Sources of Capital” and “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” below for additional information on factors that could impact interest expense.

Income Taxes.  The provision for income taxes reflects an effective tax rate of 29.7% for fiscal year 2015 compared with 35.0% for fiscal year 2014. The lower effective income tax rate for fiscal year 2015 was primarily attributable to the recognition of prior years’ federal tax deductions, a decrease in the valuation allowance for the deferred tax asset related to state net operating losses and legislation that reinstated and extended the Work Opportunity Tax Credit (“WOTC”). The tax rate for fiscal year 2014 increased slightly from the fiscal year 2013 rate of 34.8%, primarily due to legislation that reinstated and extended the WOTC in fiscal year 2013 but expired in fiscal year 2014.  Our fiscal year 2016 tax rate may vary depending upon the reinstatement of the WOTC, which expired on December 31, 2014, and pending resolution of certain tax matters.  Further, our tax rate may continue to vary significantly from quarter to quarter depending on the timing of stock option exercises and dispositions by option holders and as circumstances on other tax matters change. 

Financial Position

Total assets decreased $31.0 million, or 4.8%, to $620.0 million during fiscal year 2015 from $651.0 million at the end of fiscal year 2014.  The decrease during the year was primarily attributable to a decline in cash and restricted cash of $8.5 million.  Additionally, there was a decrease in net property, equipment and capital leases of $20.6 million, driven by depreciation and asset retirements, partially offset by purchases of property and equipment. 

Total liabilities increased $14.3 million, or 2.4%, to $602.6 million during fiscal year 2015 from $588.3 million at the end of fiscal year 2014.  The increase was primarily attributable to an increase of $9.3 million in deferred tax liability that relates to retroactive reinstatement of bonus depreciation.  Additionally, the increase relates to the $10.5 million balance from borrowing on the Company’s Series 2011-1 Senior Secured Variable Funding Notes, Class A-1 (the "2011 Variable Funding Notes") partially offset by $9.8 million of scheduled debt principal payments that were made in fiscal year 2015.

Total stockholders’ equity decreased $45.2 million, or 72.2%, to $17.4 million during fiscal year 2015 from $62.7 million at the end of fiscal year 2014. This decrease was primarily attributable to $123.8million in purchases of common stock under our stock repurchase programand was partially offset by current-year earnings of $64.5 million and $18.7 million from the issuance of stock related to stock option exercises during fiscal year 2015.

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Liquidity and Sources of Capital

Operating Cash Flows.  Net cash provided by operating activities increased $32.9million to $136.4million for fiscal year 2015 as compared to $103.5million in fiscal year 2014.  This increase resulted from changes in working capital along with a $16.6million increase in net income.

Investing Cash Flows.Cash used in investing activities decreased $45.2million to $25.3million for fiscal year 2015 compared to $70.5 million for fiscal year 2014.  During fiscal year 2015, we used $42.2 million of cash for investments in property and equipment as outlined in the table below (in millions). 

Purchase and replacement of equipment and technology	$	12.2
Brand technology investments		11.2
Acquisition of underlying real estate for drive-ins		6.6
Newly constructed drive-ins leased or sold to franchisees		5.5
Rebuilds, relocations, remodels and retrofits of existing drive-ins		3.8
Newly constructed Company drive-ins		2.9
Total investments in property and equipment	$	42.2

These purchases decreased $36.8million in fiscal year 2015 compared to the same period last year mainly due to the completion of the new technology installations at Company Drive-Ins during the first quarter of the fiscal year.  Additionally, proceeds from the sale of assets increased $11.6million primarily related to the sale of operations and real estate for nineCompany Drive-Ins, as well as the sale of surplus property.

Financing Cash Flows.Net cash used in financing activities increased $44.3 million to $119.5 million for fiscal year 2015 as compared to $75.2million in fiscal year 2014.  This increase primarily relates to a $40.7 million increase in purchases of treasury stock and $18.8million in dividend payments.  This increase is partially offset by $91.0million in proceeds from drawdowns on the 2011 Variable Funding Notes throughout fiscal year 2015, and offset by the  $80.5million of repayments on the 2011 Variable Funding Notes.

In the second quarter of fiscal year 2013, we made a debt prepayment, at par, of $20.0 million on our Series 2011-1 Senior Secured Fixed Rate Notes, Class A-2 (“2011 Fixed Rate Notes” and, together with the 2011 Variable Funding Notes, the “2011 Notes”).  In the fourth quarter of fiscal year 2013, in a private transaction we refinanced $155 million of the 2011 Fixed Rate Notes with the issuance of $155 million of Series 2013-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2013 Fixed Rate Notes”), which bear interest at 3.75% per annum.  The 2013 Fixed Rate Notes have an expected life of seven years, interest payable monthly, with no scheduled principal amortization.  As a result, mandatory debt payments have decreased from $15.0 million to $9.8 million per year.  Additionally, in the fourth quarter of fiscal year 2013, we extended the renewal date of our 2011 Variable Funding Notes by two years to May 2018 and decreased the base spread from 3.75% to 3.50%. 

At August 31, 2015, the balance outstanding under the 2011 Fixed Rate Notes, the 2011 Variable Funding Notes and the 2013 Fixed Rate Notes, including accrued interest, was $272.9 million, $10.5 million and $155.2 million, respectively.  The weighted-average interest cost of the 2011 Fixed Rate Notes, 2011 Variable Funding Notes and 2013 Fixed Rate Notes was 5.9%,  4.1% and 4.1%, respectively.  The weighted-average interest cost includes the effect of the loan origination costs.

In fiscal year 2013, the debt prepayment and the partial debt refinancing mentioned above resulted in a pro-rata write-off of loan origination costs from the 2011 Fixed Rate Notes, representing a majority of the $4.4 million loss which is reflected in “Net loss from early extinguishment of debt” on the Consolidated Statements of Income.  An additional $4.1 million in debt origination costs were capitalized in conjunction with the 2013 Fixed Rate Notes.  Loan costs are being amortized over each note’s expected life.  The amount of loan costs expected to be amortized over the next 12 months is reflected in “Other current assets” on the Consolidated Balance Sheets.For additional information on our 2011 Notes and 2013 Fixed Rate Notes, see note 10 – Debt, included in Part II, Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

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In August 2012, our Board of Directors approved a $40 million share repurchase program.  Under that program, we were authorized to purchase up to $40million of our outstanding shares of common stock through August 31, 2013.  In January 2013, the Board of Directors increased the purchase authorization to $55million.  During fiscal year 2013, we completed this share repurchase program.

In August 2013, the Board of Directors extended the share repurchase program, authorizing us to purchase up to $40million of our outstanding shares of common stock. In January 2014, our Board of Directors approved an incremental $40 million authorization for this program that allowed for up to $80million of common stock to be repurchased through August 31, 2014. 

As part of this program, in February2014, we entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to purchase $40million of our common stock.  In exchange for a $40 million up-front payment, the financial institution delivered approximately 2.1 million shares.  During March2014, the ASR purchase period concluded with no additional shares delivered, resulting in an average price per share of $19.13.  We reflected the ASR transaction as a repurchase of common stock for purposes of calculating earnings per share and as a forward contract indexed to its own common stock.  The forward contract met all of the applicable criteria for equity classification.

The Company completed the Board-approved share repurchase program during fiscal year 2014, with approximately 4.1 million shares repurchased, resulting in an average price per share of $19.61. 

In August 2014, our Board of Directors further extended our share repurchase program, authorizing us to purchase up to $105 million of our outstanding shares of common stock during fiscal year 2015.In October2014, the Company entered into an ASR agreement with a financial institution to purchase $15 million of the Company’s common stock.  In exchange for a $15million up-front payment, the financial institution delivered approximately 0.6million shares.  During January2015, the ASR purchase period concluded.  The Company paid an additional $0.1million with no additional shares delivered, resulting in an average price per share of $26.32.  In February2015, the Company entered into additional ASR agreements with a financial institution to purchase $75million of the Company’s common stock.  In exchange for a $75million up-front payment, the financial institution delivered approximately 2.1million shares.  The ASR transactions completed in July2015 with 0.3million additional shares delivered, resulting in an average price per share of $31.38.  The Company reflected the ASR transactions as a repurchase of common stock for purposes of calculating earnings per share and as a forward contract indexed to its own common stock.  The forward contract met all of the applicable criteria for equity classification.

In August 2015, the Board of Directors further extended the Company’s share repurchase program, authorizing the Company to purchase up to $145million of its outstanding shares of common stock through August31,2016.

Share repurchases will be made from time to time in the open market or otherwise, including through an ASR program, under the terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions. The share repurchase program may be extended, modified, suspended or discontinued at any time.  We plan to fund the share repurchase program from existing cash on hand at August31,2015, cash flows from operations and borrowings under our 2011 Variable Funding Notes.

As of August31,2015, our total cash balance of $47.0million ($27.2 million of unrestricted and $19.8 million of restricted cash balances) reflected the impact of the cash generated from operating activities, cash used for share repurchases,  debt prepayment and capital expenditures mentioned above.We believe that existing cash, funds generated from operations and the $89.5 million available under our 2011 Variable Funding Notes will meet our needs for the foreseeable future.

In August2014, the Company initiated a quarterly cash dividend program and paid a quarterly dividend of $0.09per share of common stock, totaling $18.8million for the fiscal year.  Subsequent to the end of the fiscal year, the Company declared a quarterly dividend of $0.11per share of common stock to be paid to stockholders of record as of the close of business on November11,2015, with a payment date of November20,2015.  The Company did not pay any cash dividends on its common stock prior to fiscal 2015.  The future declaration of quarterly dividends and

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the establishment of future record and payment dates are subject to the final determination of the Company’s Board of Directors.

Off-Balance Sheet Arrangements

The Company has obligations for guarantees on certain franchisee loans, which in the aggregate are immaterial, and obligations for guarantees on certain franchisee lease agreements.  Other than such guarantees and various operating leases and purchase obligations, which are disclosed below in “Contractual Obligations and Commitments” and in note 7 - Leases and note 15 – Commitments and Contingencies to our Consolidated Financial Statements, the Company has no other material off-balance sheet arrangements.

Contractual Obligations and Commitments

In the normal course of business, Sonic enters into purchase contracts, lease agreements and borrowing arrangements.  The following table presents our commitments and obligations as of August 31, 2015 (in thousands):

				Payments Due by Fiscal Year
										More than
				Less than		1 - 3		3 - 5		5 Years
				1 Year		Years		Years		(2021 and
		Total		(2016)		(2017-2018)		(2019-2020)		thereafter)
Contractual Obligations
Long-term debt(1)	$	506,189	$	30,663	$	309,547	$	165,979	$	-
Capital leases		31,236		5,254		9,405		6,694		9,883
Operating leases		123,396		11,374		22,050		20,974		68,998
Purchase obligations(2)		283,171		28,895		45,657		48,640		159,979
Other(3)		17,640		-		-		-		-
Total	$	961,632	$	76,186	$	386,659	$	242,287	$	238,860
————

(1)  Includes scheduled principal and interest payments on our 2011 Notes and 2013 Fixed Rate Notes and assumes these notes will be outstanding for the expected seven-year life with anticipated repayment dates in May 2018 and July 2020, respectively.

(2)  Purchase obligations primarily relate to the Company’s estimated share of system-wide commitments to purchase food products.  We have excluded agreements that are cancelable without penalty. These amounts require estimates and could vary due to the timing of volumes and changes in market pricing.

(3)  Includes $3.6 million of unrecognized tax benefits related to uncertain tax positions and $14.0 million related to guarantees of franchisee leases and loan agreements.  As we are not able to reasonably estimate the timing or amount of these payments, if any, the related balances have not been reflected in the “Payments Due by Fiscal Year” section of the table.

Impact of Inflation

We are impacted by inflation which has caused increases in our food, labor and benefits costs and has increased our operating expenses. To the extent permitted by competition, increased costs are recovered through a combination of menu price increases and alternative products or processes, or by implementing other cost reduction procedures.

Critical Accounting Policies and Estimates

The Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this document contain information that is pertinent to management's discussion and analysis. The preparation of financial statements in conformity with generally accepted accounting principles requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities. These assumptions and estimates could have a material effect on our financial statements.  We evaluate our assumptions and estimates on an ongoing basis using historical experience and various other factors that are believed to be relevant under the circumstances.  Actual results may differ from these estimates under different assumptions or conditions.

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We perform a periodic review of our financial reporting and disclosure practices and accounting policies to ensure that our financial reporting and disclosures provide accurate and transparent information relative to the current economic and business environment.  We believe the following significant accounting policies and estimates involve a high degree of risk, judgment and/or complexity.

Accounting for Long-Lived Assets.We review Company Drive-In assets for impairment when events or circumstances indicate they might be impaired.  We test for impairment using historical cash flows and other relevant facts and circumstances as the primary basis for our estimates of future cash flows.  This process requires us to estimate fair values of our drive-ins by making assumptions regarding future cash flows and other factors.  It is reasonably possible that our estimates  of future cash flows could change resulting in the need to write down to fair value certain Company Drive-In assets.

We assess the recoverability of goodwill at least annually and more frequently if events or changes in circumstances occur indicating that the carrying amount of goodwill may not be recoverable or as a result of allocating goodwill to Company Drive-Ins that are sold.  Since the Company is one reporting unit, we identify potential goodwill impairment by comparing the fair value of the Company to its carrying value.  The fair value of the Company is determined using a market approach.  If the carrying value of the Company exceeds fair value, a comparison of the fair value of goodwill against the carrying value of goodwill is made to determine whether goodwill has been impaired.

During the fourth quarter of fiscal year 2015, we performed our annual assessment of the recoverability of goodwill and determined that no impairment was indicated.  As of the impairment testing date, the fair value of the Company significantly exceeded the carrying value.  As of August 31, 2015, the Company had $77.1 million of goodwill.

Revenue Recognition Related to Franchise Fees and Royalties.  Franchise fees are recognized in income when we have substantially performed or satisfied all material services or conditions relating to the sale of the franchise and the fees are nonrefundable.  Development fees are nonrefundable and are recognized in income on a pro-rata basis when the conditions for revenue recognition under the individual development agreements are met.  Both franchise fees and development fees are generally recognized upon the opening of a Franchise Drive-In or upon termination of the agreement between Sonic and the franchisee.

Our franchisees pay royalties based on a percentage of sales.  Royalties are recognized as revenue when they are earned.

Accounting for Stock-Based Compensation.  We estimate the fair value of stock options granted using the Black-Scholes option pricing model along with the assumptions shown in note 13 – Stockholders’ Equity in the Notes to the Consolidated Financial Statements in this Form 10-K.  The assumptions used in computing the fair value of stock-based payments reflect our best estimates, but involve uncertainties relating to market and other conditions, many of which are outside of our control.  We estimate expected volatility based on historical daily price changes of the Company’s stock for a period equal to the current expected term of the options.  The expected option term is the number of years the Company estimates that options will be outstanding prior to exercise considering vesting schedules and our historical exercise patterns.  If other assumptions or estimates had been used, the stock-based compensation expense that was recorded could have been materially different.  Furthermore, if different assumptions are used in future periods, stock-based compensation expense could be materially impacted.

Income Taxes.  We estimate certain components of our provision for income taxes.  These estimates include, among other items, depreciation and amortization expense allowable for tax purposes, allowable tax credits for items such as wages paid to certain employees, effective rates for state and local income taxes and the tax deductibility of certain other items.

Although we believe we have adequately accounted for our uncertain tax positions, from time to time, audits result in proposed assessments where the ultimate resolution may give rise to us owing additional taxes. We adjust our uncertain tax positions until they are resolved in light of changing facts and circumstances, such as the completion of a tax audit, expiration of a statute of limitations, the refinement of an estimate and penalty and interest accruals associated with uncertain tax positions. We believe that our tax positions comply with applicable tax law and that we

28

have adequately provided for these matters. However, to the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.

Our estimates are based on the best available information at the time that we prepare the provision, including legislative and judicial developments.  We generally file our annual income tax returns several months after our fiscal year end.  Income tax returns are subject to audit by federal, state and local governments, typically several years after the returns are filed.  These returns could be subject to material adjustments or differing interpretations of the tax laws.  Adjustments to these estimates or returns can result in significant variability in the tax rate from period to period.

Leases.We lease the land and buildings for certain Company Drive-Ins from third parties.  Rent expense for operating leases is recognized on a straight-line basis over the expected lease term, including cancelable option periods when it is deemed to be reasonably assured that we would incur an economic penalty for not exercising the options.  Judgment is required to determine options expected to be exercised.  Within the terms of some of our leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods.  The effects of the rent holidays and escalations are reflected in rent expense on a straight-line basis over the expected lease term, including cancelable option periods when appropriate.  The lease term commences on the date when we have the right to control the use of lease property, which can occur before rent payments are due under the terms of the lease.  Contingent rent is generally based on sales levels and is accrued at the point in time we determine that it is probable that such sales levels will be achieved.

Accounts and Notes Receivable.We charge interest on past due accounts receivable and recognize income as it is collected.  Interest accrues on notes receivable based on the contractual terms of the respective notes.  We monitor all accounts and notes receivable for delinquency and provide for estimated losses for specific receivables that are not likely to be collected.  We assess credit risk for accounts and notes receivable of specific franchisees based on payment history, current payment patterns, the health of the franchisee’s business and an assessment of the franchisee’s ability to pay outstanding balances.  In addition to allowances for bad debt for specific franchisee receivables, a general provision for bad debt is estimated for accounts receivable based on historical trends. Account balances generally are charged against the allowance when we believe it is probable that the receivable will not be recovered and legal remedies have been exhausted. We continually review our allowance for doubtful accounts.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Sonic’s use of debt directly exposes the Company to interest rate risk.  Fixed rate debt, where the interest rate is fixed over the life of the instrument, exposes the Company to changes in market interest rates reflected in the fair value of the debt and to the risk that the Company may need to refinance maturing debt with new debt at a higher rate.  Sonic is also exposed to market risk from changes in commodity prices.  The Company does not utilize financial instruments for trading purposes.  Sonic manages its debt portfolio to achieve an overall desired position of fixed and floating rates. 

Interest Rate Risk.  Our exposure to interest rate risk at August 31, 2015,was primarily based on the 2011Fixed Rate Notes and 2013 Fixed Rate Notes with an effective rate of 5.4% and3.75%, respectively, before amortization of debt-related costs.  At August 31, 2015, the fair value of the 2011 Fixed Rate Notes and 2013 Fixed Rate Notes approximated their carrying value of $428.1 million,including accrued interest.  To derive the fair value, management used market information available for public debt transactions for companies with ratings that are similar to our ratings and information gathered from brokers who trade in our notes.  Management believes this fair value is a reasonable estimate.  Should interest rates and/or credit spreads increase or decrease by one percentage point, the estimated fair value of the 2011 Fixed Rate Notes and 2013 Fixed Rate Notes would decrease or increase by approximately $12million, respectively.  The fair value estimate required significant assumptions by management.

Commodity Price Risk.  The Company and its franchisees purchase certain commodities such as beef, potatoes, chicken and dairy products.  These commodities are generally purchased based upon market prices established with vendors. These purchase arrangements may contain contractual features that limit the price paid by establishing price floors or caps; however, we generally do not make any long-term commitments to purchase any minimum quantities under these arrangements other than as disclosed above in Part II, Item 7, “Management’s

29

Discussion and Analysis of Financial Condition and Results of Operations” under “Contractual Obligations and Commitments.”We also do not use financial instruments to hedge commodity prices because these purchase arrangements help control the ultimate cost. 

This market risk discussion contains forward-looking statements.  Actual results may differ materially from this discussion based upon general market conditions and changes in financial markets.

Item 8.  Financial Statements and Supplementary Data

The Company has included the financial statements and supplementary financial information required by this item immediately following Part IV of this report and hereby incorporates by reference the relevant portions of those statements and information into this Item 8.

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-14 under the Securities Exchange Act of 1934).  Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.  Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level. 

There were no significant changes in the Company’s internal controls over financial reporting during the quarter ended August 31, 2015, that have materially affected or are reasonably likely to materially affect the Company’s internal controls over financial reporting.

30

Management's Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of August 31, 2015.  In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework - 2013.  Based on our assessment, we believe that, as of August 31, 2015, the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm that audited the 2015financial statements included in this annual report has issued an attestation report on the Company’s internal control over financial reporting. The report appears on the following page.

31

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Sonic Corp.

We have audited Sonic Corp.’s internal control over financial reporting as of August  31, 2015, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Sonic Corp.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Sonic Corp’s internal control over financial reporting based on our audit.  

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.  

A  company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.  

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  

In our opinion, Sonic Corp. maintained, in all material respects, effective internal control over financial reporting as of August 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013)  issued by COSO. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Sonic Corp. and subsidiaries as of August 31, 2015 and 2014, and the related consolidated statements of income, stockholders’ equity, and cash flows for the years then ended, and our report dated October 23, 2015 expressed an unqualified opinion on those consolidated financial statements.  

/s/ KPMG LLP

Oklahoma City, Oklahoma
October 23, 2015

32

Item 9B.  Other Information

None.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

Sonic has adopted a Code of Ethics for Financial Officers and a Code of Business Conduct and Ethics that applies to all directors, officers and employees.  Sonic has posted copies of these codes on the investor section of its website,www.sonicdrivein.com. 

Information regarding Sonic’s executive officers is set forth under Item 4A of Part I of this report.  The other information required by this item is incorporated by reference from the definitive proxy statement which Sonic will file with the Securities and Exchange Commission no later than 120 days after August 31, 2015 (the “Proxy Statement”), under the captions “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance.”

Item 11.  Executive Compensation

The information required by this item is incorporated by reference from the Proxy Statement under the caption “Executive Compensation – Compensation Discussion and Analysis.”

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference from the Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information.”

Item 13.  Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference from the Proxy Statement under the captions “Certain Relationships and Related Transactions,” “Director Independence,” “Committees of the Board of Directors” and “Compensation Committee Interlocks and Insider Participation.”

Item 14.  Principal Accounting Fees and Services

The information required by this item is incorporated by reference from the Proxy Statement under the caption “Independent Registered Public Accounting Firm.”

33

PART IV

Item 15.  Exhibits and Financial Statement Schedules

Financial Statements

The following consolidated financial statements of the Company appear immediately following this Item 15:

	Page
Reports of Independent Registered Public Accounting Firms	F-1
Consolidated Balance Sheets at August 31, 2015 and 2014	F-3
Consolidated Statements of Income for each of the three years in the period ended August 31, 2015	F-4
Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended August 31, 2015	F-5
Consolidated Statements of Cash Flows for each of the three years in the period ended August 31, 2015	F-6
Notes to Consolidated Financial Statements	F-7

Financial Statement Schedule

The Company has included the following schedule immediately following this Item 15:

	Page
Schedule II - Valuation and Qualifying Accounts	F-27

The Company has omitted all other schedules because the conditions requiring their filing do not exist or because the required information appears in Sonic’s Consolidated Financial Statements, including the notes to those statements.

Exhibits

The Company has filed the exhibits listed below with this report.  The Company has marked all management contracts and compensatory plans or arrangements with an asterisk (*).

3.01.Certificate of Incorporation of the Company, which the Company incorporates by reference from Exhibit 3.1 to the Company’s Form S-1 Registration Statement No. 33-37158 filed on October 3, 1990.

3.02.         Certificate of Amendment of Certificate of Incorporation of the Company, March 4, 1996, which the Company incorporates by reference from Exhibit 3.05 to the Company’s Form 10-K for the fiscal year ended August 31, 2000.

3.03.         Certificate of Amendment of Certificate of Incorporation of the Company, January 22, 2002, which the Company incorporates by reference from Exhibit 3.06 to the Company’s Form 10-K for the fiscal year ended August 31, 2002.

3.04.         Certificate of Amendment of Certificate of Incorporation of the Company, January 31, 2006, which the Company incorporates by reference from Exhibit 3.04 to the Company’s Form 10-K for the fiscal year ended August 31, 2006.

4.01.         Bylaws of the Company, as amended and restated January 14, 2010, which the Company incorporates by reference from Exhibit 3.05 to the Company’s Form 10-K for fiscal year ended August 31, 2010.

4.02.         Certificate of Designations of Series A Junior Preferred Stock, which the Company incorporates by reference from Exhibit 99.1 to the Company’s Form 8-K filed on June 17, 1997.

4.03.         Specimen Certificate for Common Stock, which the Company incorporates by reference from Exhibit 4.01 to the Company’s Form 10-K for the fiscal year ended August 31, 1999.

34

10.01.       Form of Sonic License Agreement, which the Company incorporates by reference from Exhibit 10.10 to the Company’s Form 10-K for the fiscal year ended August 31, 2007.

10.02.       Form of Sonic Development Agreement, which the Company incorporates by reference from Exhibit No. 10.13 to the Company’s Form 10-K for the fiscal year ended August 31, 2007.

10.03.Form of Sonic Sign Lease Agreement, which the Company incorporates by reference from Exhibit 10.4 to the Company’s Form S-1 Registration Statement No. 33-37158.

10.04.       Sonic Corp. Stock Purchase Plan, as amended and restated effective April 20, 2011, which the Company incorporates by reference from Exhibit 10.07 to the Company’s Form 10-K for the fiscal year ended August 31, 2012.*

10.05.       Sonic Corp. Savings and Profit-Sharing Plan, as amended and restated effective January 1, 2013, which the Company incorporates by reference from Exhibit 10.1 to the Company’s Form 10-Q filed on July 3, 2013.*

10.06.       Sonic Corp. Nonqualified Deferred Compensation Plan as amended and restated April 10, 2013,which the Company incorporates by reference from Exhibit 10.06 to the Company’s Form 10-K for the fiscal year ended August 31, 2013.*

10.07.       Form of Indemnification Agreement for Directors, which the Company incorporates by reference from Exhibit 10.7 to the Company’s Form S-1 Registration Statement No. 33-37158.*

10.08.       Form of Indemnification Agreement for Officers, which the Company incorporates by reference from Exhibit 10.14 to the Company’s Form 10-K for the fiscal year ended August 31, 1995.*

10.09.       Form of Chief Executive Officer Amended and Restated Employment Agreement dated November 1, 2012, which the Company incorporates by reference from Exhibit 10.12 to the Company’s Form 10-K for the fiscal year ended August 31, 2012.*

10.10.       Form of Executive Officer Amended and Restated Employment Agreement dated November1,2012, which the Company incorporates by reference from Exhibit 10.13 to the Company’s Form 10-K for the fiscal year ended August 31, 2012.*

10.11.       Amended and Restated Sonic Corp. Executive Severance Plan dated September 1, 2014, which the Company incorporates by reference from Exhibit 10.11 to the Company’s Form 10-K for the fiscal year ended August 31, 2014.*

10.12.       2001 Sonic Corp. Stock Option Plan, as amended and restated effective January 14, 2010, which the Company incorporates by reference from Exhibit (d)(3) to the Company’s Schedule TO filed March 31, 2010.*

10.13.       2001 Sonic Corp. Directors’ Stock Option Plan, as amended and restated January 14, 2010, which the Company incorporates by reference from Exhibit 10.27 to the Company’s Form 10-K filed on October 29, 2010.*

10.14.Sonic Corp. 2006 Long-Term Incentive Plan, as amended and restated effective January 16, 2014, which the Company incorporates by reference from Exhibit 4.1 to the Company’s Form S-8 filed on April 4, 2014.*

10.15.       Form of Award Agreement under Sonic Corp. 2006 Long-Term Incentive Plan, which the Company incorporates by reference from Exhibit (d)(2) to the Company’s Schedule TO filed March 31, 2010.*

10.16.       Sonic Corp. Senior Executive Cash Incentive Plan dated January 6, 2011, which the Company incorporates by reference from Exhibit 10.01 to the Company’s Form 10-Q filed on April 8, 2011.*

10.17.       Sonic Corp. Employee Cash Incentive Plan dated January 6, 2011, which the Company incorporates by reference from Exhibit 10.02 to the Company’s Form 10-Q filed on April 8, 2011.*

10.18.       Base Indenture dated May 20, 2011 among Sonic Capital LLC, Sonic Industries LLC, America’s Drive-In Brand Properties LLC, America’s Drive-In Restaurants LLC, SRI Real Estate Holding LLC and SRI Real

35

Estate Properties LLC, each as Co-Issuer of the Fixed Rate Notes and Citibank, N.A., as Trustee and Securities Intermediary, which the Company incorporates by reference from Exhibit 99.1 to the Company’s Form 8-K filed on May 26, 2011.

10.19.Supplemental Indenture dated May 20, 2011 among Sonic Capital LLC, Sonic Industries LLC, America’s Drive-In Brand Properties LLC, America’s Drive-In Restaurants LLC, SRI Real Estate Holding LLC and SRI Real Estate Properties LLC, each as Co-Issuer of the Fixed Rate Notes, and Citibank, N.A. as Trustee and the Series 2011-1 Securities Intermediary, which the Company incorporates by reference from Exhibit 99.2 to the Company’s Form 8-K filed on May 26, 2011.

10.20.       Class A-1 Note Purchase Agreement dated May 20, 2011 among Sonic Capital LLC, Sonic Industries LLC, America’s Drive-In Brand Properties LLC, America’s Drive-In Restaurants LLC, SRI Real Estate Holding LLC and SRI Real Estate Properties LLC, each as Co-Issuer and Sonic Industries Services Inc., as Manager, certain private conduit investors, financial institutions and funding agents, Barclays Bank PLC, as provider of letters of credit, and Barclays Bank PLC, as a swing-line lender and as Administrative Agent of the Fixed Rate Notes, which the Company incorporates by reference from Exhibit 99.3 to the Company’s Form 8-K filed on May 26, 2011.

10.21.       Guarantee and Collateral Support Agreement dated May 20, 2011 made by Sonic Franchising LLC, as Guarantor in favor of Citibank N.A. as Trustee, which the Company incorporates by reference from Exhibit 99.4 to the Company’s Form 8-K filed on May 26, 2011.

10.22.       Parent Company Support Agreement dated May 20, 2011 made by Sonic Corp. in favor of Citibank N.A., as Trustee, which the Company incorporates by reference from Exhibit 99.5 to the Company’s Form 8-K filed on May 26, 2011.

10.23.       Supplemental Indenture dated July 18, 2013 among Sonic Capital LLC, Sonic Industries LLC, America's Drive-In Brand Properties LLC, America's Drive-In Restaurants LLC, SRI Real Estate Holding LLC and SRI Real Estate Properties LLC, each as Co-Issuer of the Series 2013-1 Notes, and Citibank, N.A., as Trustee and Series 2013-1 Securities Intermediary, which the Company incorporates by reference to the Company’s Form 8‑K filed on July 24, 2013.

21.01.       Subsidiaries of the Company.

23.01.       Consent of Independent Registered Public Accounting Firm.

23.02.       Consent of Independent Registered Public Accounting Firm.

31.01.       Certification of Chief Executive Officer pursuant to S.E.C. Rule 13a-14.

31.02.       Certification of Chief Financial Officer pursuant to S.E.C. Rule 13a-14.

32.01.       Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.02.       Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS    XBRL Instance Document

101.SCHXBRL Taxonomy Extension Schema Document

101.CAL  XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF   XBRL Taxonomy Extension Definition Linkbase Document

101.LAB  XBRL Taxonomy Extension Label Linkbase Document

101.PRE  XBRL Taxonomy Extension Presentation Linkbase Document

36

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders ofSonic Corp.

We have audited the accompanying consolidated balance sheets of Sonic Corp. and subsidiaries as of August 31, 2015 and 2014, and the related consolidated statements of income, stockholders’ equity, and cash flows for the years then ended. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule II as of August 31, 2015 and 2014, and for the years then ended. These consolidated financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Sonic Corp. and subsidiaries as of August 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Sonic Corp.’s internal control over financial reporting as of August 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated October 23, 2015, expressed an unqualified opinion on the effectiveness of Sonic Corp.’s internal control over financial reporting.

/s/ KPMG LLP

Oklahoma City, Oklahoma

October 23, 2015

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders ofSonic Corp.

We have audited the accompanying consolidated statements of income, stockholders’ equity, and cash flows of Sonic Corp. for the year ended August 31, 2013.  Our audit also included the 2013 financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provided a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated results of Sonic Corp.’soperations and its cash flows for the year ended August 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related 2013 financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP

Oklahoma City, Oklahoma

October 25, 2013

F-2

SONIC CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
	August 31,
	2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	27,191	$	35,694
Restricted cash		13,246		13,208
Accounts and notes receivable, net		31,577		32,833
Income taxes receivable		1,741		1,887
Inventories		3,824		3,349
Prepaid expenses		5,544		5,917
Other current assets		2,315		2,824
Total current assets		85,438		95,712
Noncurrent restricted cash		6,524		6,652
Notes receivable, net		7,216		8,155
Property, equipment and capital leases, net		421,406		441,969
Goodwill		77,076		77,093
Other assets, net		22,364		21,391
Total assets	$	620,024	$	650,972
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	13,860	$	17,207
Franchisee deposits		870		2,678
Accrued liabilities		50,714		43,681
Income taxes payable		8,910		2,461
Current maturities of long-term debt and capital leases		13,467		13,484
Total current liabilities		87,821		79,511
Obligations under capital leases due after one year		20,763		23,050
Long-term debt due after one year		428,238		427,527
Deferred income taxes		43,549		37,611
Other non-current liabilities		22,220		20,598
Commitments and contingencies (Notes 7,8,14,15)
Stockholders’ equity:
Preferred stock, par value $.01;1,000 shares authorized; none outstanding		-		-
Common stock, par value $.01;245,000 shares authorized; shares issued
118,309 in 2015 and in 2014		1,183		1,183
Paid-in capital		232,550		225,004
Retained earnings		851,715		801,202
Treasury stock, at cost; 67,249 shares in 2015 and 64,505 shares in 2014		(1,068,015)		(964,714)
Total stockholders’ equity		17,433		62,675
Total liabilities and stockholders’ equity	$	620,024	$	650,972

The accompanying notes are an integral part of the consolidated financial statements.

F-3

SONIC CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
	Fiscal year ended August 31,
	2015		2014		2013
Revenues:
Company Drive-In sales	$	436,031	$	405,363	$	402,296
Franchise Drive-Ins:
Franchise royalties and fees		161,342		138,416		130,737
Lease revenue		5,583		4,291		4,785
Other		3,133		4,279		4,767
Total revenues		606,089		552,349		542,585
Costs and expenses:
Company Drive-Ins:
Food and packaging		121,701		116,325		114,545
Payroll and other employee benefits		151,801		139,939		142,511
Other operating expenses, exclusive of
depreciation and amortization included below		90,436		85,845		86,153
Total cost of Company Drive-In sales		363,938		342,109		343,209
Selling, general and administrative		79,336		69,415		66,022
Depreciation and amortization		45,892		42,210		40,387
Provision for impairment of long-lived assets		1,440		114		1,776
Other operating (income) expense, net		(945)		(176)		1,943
Total costs and expenses		489,661		453,672		453,337
Income from operations		116,428		98,677		89,248
Interest expense		25,114		25,382		29,098
Interest income		(408)		(469)		(592)
Net loss from early extinguishment of debt		-		-		4,443
Net interest expense		24,706		24,913		32,949
Income before income taxes		91,722		73,764		56,299
Provision for income taxes		27,237		25,848		19,598
Net income	$	64,485	$	47,916	$	36,701
Basic income per share	$	1.23	$	0.87	$	0.65
Diluted income per share	$	1.20	$	0.85	$	0.64
Cash dividends declared per common share	$	0.27	$	0.09	$	-

The accompanying notes are an integral part of the consolidated financial statements.

F-4

SONIC CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
										Total
	Common		Paid-in		Retained		Treasury Stock			Stockholders’
	Stock		Capital		Earnings		Shares	Amount		Equity
Balance at August 31, 2012	$	1,183	$	230,543	$	722,614	60,325	$	(895,093)	$	59,247
Net income		-		-		36,701	-		-		36,701
Stock-based compensation expense		-		3,630		-	-		-		3,630
Purchase of treasury stock		-		-		-	3,332		(35,480)		(35,480)
Exercise of stock options and
issuance of restricted stock		-		(6,127)		(1,057)	(1,607)		23,527		16,343
Other		-		(3,278)		(120)	(25)		421		(2,977)
Balance at August 31, 2013	$	1,183	$	224,768	$	758,138	62,025	$	(906,625)	$	77,464
Net income		-		-		47,916	-		-		47,916
Cash dividends		-		-		(4,852)	-		-		(4,852)
Stock-based compensation expense		-		3,742		-	-		-		3,742
Purchase of treasury stock		-		-		-	4,080		(80,045)		(80,045)
Exercise of stock options and
issuance of restricted stock		-		(4,186)		-	(1,575)		21,593		17,407
Other		-		680		-	(25)		363		1,043
Balance at August 31, 2014	$	1,183	$	225,004	$	801,202	64,505	$	(964,714)	$	62,675
Net income		-		-		64,485	-		-		64,485
Cash dividends		-		-		(13,972)	-		-		(13,972)
Stock-based compensation expense		-		3,520		-	-		-		3,520
Purchase of treasury stock		-		-		-	4,201		(123,786)		(123,786)
Exercise of stock options and
issuance of restricted stock		-		(1,458)		-	(1,438)		20,190		18,732
Other		-		5,484		-	(19)		295		5,779
Balance at August 31, 2015	$	1,183	$	232,550	$	851,715	67,249	$	(1,068,015)	$	17,433

Theaccompanying notes are an integral part of the consolidated financial statements.

F-5

SONIC CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
	Fiscal year ended August 31,
	2015		2014		2013
Cash flows from operating activities:
Net income	$	64,485	$	47,916	$	36,701
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization		45,892		42,210		40,387
Stock-based compensation expense		3,520		3,742		3,630
Net loss from early extinguishment of debt		-		-		4,443
Other		3,743		(1,628)		2,381
(Increase) decrease in operating assets:
Restricted cash		(61)		(1,428)		(2,431)
Accounts receivable and other assets		2,885		(5,977)		1,613
Increase (decrease) in operating liabilities:
Accounts payable		(1,288)		640		2,324
Accrued and other liabilities		10,296		7,347		5,129
Income taxes		6,890		10,726		(6,338)
Total adjustments		71,877		55,632		51,138
Net cash provided by operating activities		136,362		103,548		87,839
Cash flows from investing activities:
Purchases of property and equipment		(42,153)		(79,008)		(41,338)
Proceeds from sale of assets		13,701		2,148		33,475
Other		3,132		6,337		6,679
Net cash used in investing activities		(25,320)		(70,523)		(1,184)
Cash flows from financing activities:
Payments on debt		(90,290)		(9,976)		(189,499)
Proceeds from borrowings		91,000		-		155,000
Restricted cash for securitization obligations		151		181		1,921
Purchases of treasury stock		(120,463)		(79,786)		(36,582)
Proceeds from exercise of stock options		18,732		17,407		16,343
Payment of dividends		(18,808)		-		-
Debt issuance and extinguishment costs		(12)		(151)		(5,137)
Other		145		(2,902)		(3,452)
Net cash used in financing activities		(119,545)		(75,227)		(61,406)
Net increase (decrease) in cash and cash equivalents		(8,503)		(42,202)		25,249
Cash and cash equivalents at beginning of year		35,694		77,896		52,647
Cash and cash equivalents at end of year	$	27,191	$	35,694	$	77,896
Supplemental cash flow information
Cash paid during the year for:
Interest	$	23,330	$	23,701	$	27,352
Income taxes (net of refunds)	$	11,360	$	14,143	$	25,440
Non-cash investing and financing activities:
Change in obligation to acquire treasury stock		3,323		259		(1,102)
Notes receivable and direct financing leases from property disposition		-		-		8,661
Stock options exercised by stock swap		3,385		4,634		-
Change in obligation for purchase of property and equipment		(2,121)		3,097		(477)
Dividend payable		13		4,852		-

The accompanying notes are an integral part of the consolidated financial statements.

F-6

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

1.Summary of Significant Accounting Policies

Operations

Sonic Corp. (the “Company”) operates and franchises a chain of quick-service restaurants in the United States.  It derives its revenues primarily from Company Drive-In sales and royalty fees from franchisees.  The Company also leases real estate and receives equity earnings in noncontrolling ownership in a number of Franchise Drive‑Ins.

Principles of Consolidation

The accompanying financial statements include the accounts of the Company, its whollyowned subsidiaries and a number of Company Drive-Ins in which a subsidiary has a controlling ownership interest.  All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) requires management to make estimates and assumptions that affect the amounts reported and contingent assets and liabilities disclosed in the financial statements and accompanying notes.  Actual results may differ from those estimates, and such differences may be material to the financial statements.

Segment Reporting

In accordance with Accounting Standards Update (“ASU”) 280, “Segment Reporting,” the Company uses the management approach for determining its reportable segments.  The management approach is based upon the way that management reviews performance and allocates resources.  The Company’s chief operating decision maker and his management team review operating results on a consolidated basis for purposes of allocating resources and evaluating the financial performance of the Sonic brand.  Accordingly, the Company has determined that it has one operating segment and, therefore, one reporting segment.

Cash Equivalents

Cash equivalents consist of highly liquid investments, primarily money market accounts that mature in three months or less from date of purchase, and depository accounts.

Restricted Cash

As of August 31, 2015, the Company had restricted cash balances totaling $19.8 million for funds required to be held in trust for the benefit of senior noteholders under the Company’s debt arrangements.  The current portion of restricted cash of $13.3 million represents amounts to be returned to Sonic or paid to service current debt obligations.  The noncurrent portion of $6.5 million represents interest reserves required to be set aside for the duration of the debt.

Accounts and Notes Receivable

The Company charges interest on past due accounts receivable and recognizes income as it is collected.  Interest accrues on notes receivable based on the contractual terms of the respective note.  The Company monitors all accounts and notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected.  The Company assesses credit risk for accounts and notes receivable of specific franchisees based on payment history, current payment patterns, the health of the franchisee’s business, and an assessment of the franchisee’s ability to pay outstanding balances.  In addition to allowances for bad debt for specific franchisee

F-7

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

receivables, a general provision for bad debt is estimated for the Company’s accounts receivable based on historical trends. Account balances generally are charged against the allowance when the Company believes that the collection is no longer reasonably assured.  The Company continually reviews its allowance for doubtful accounts.

Inventories

Inventories consist principally of food and supplies that are carried at the lower of cost (first-in, first-out basis) or market.

Property, Equipment and Capital Leases

Property and equipment are recorded at cost, and leased assets under capital leases are recorded at the present value of future minimum lease payments.  Depreciation of property and equipment and amortization of capital leases are computed by the straight-line method over the estimated useful lives or the lease term, including cancelable option periods when appropriate, and are combined for presentation in the financial statements.

Accounting for Long-Lived Assets

The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable.  Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which generally represents the individual drive-in.  The Company’s primary test for an indicator of potential impairment is operating losses of the related drive-in.  If an indication of impairment is determined to be present, the Company estimates the future cash flows expected to be generated from the use of the asset and its eventual disposal.  If the sum of undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized.  The impairment loss is measured by comparing the fair value of the asset to its carrying amount.  Fair value is typically determined to be the value of the land since drive-in buildings and improvements are single-purpose assets and have little value to market participants.  The equipment associated with a store can be easily relocated to another store and therefore is not adjusted.

Surplus property assets are carried at the lower of depreciated cost or fair value less cost to sell.  The majority of the value in surplus property is land.  Fair values are estimated based upon management’s assessment as well as independent market value assessments of the assets’ estimated sales values. 

Goodwill and Other Intangible Assets

Goodwill is determined based on an acquisition purchase price in excess of the fair value of identified assets.  Intangible assets with lives restricted by contractual, legal or other means are amortized over their useful lives.  The Company tests goodwill at least annually for impairment using the fair value approach on a reporting unit basis. 

Since the Company is one reporting unit, potential goodwill impairment is evaluated by comparing the fair value of the Company to its carrying value.  The fair value of the Company is determined using a market approach.  If the carrying value of the Company exceeds fair value, a comparison of the fair value of goodwill against the carrying value of goodwill is made to determine whether goodwill has been impaired.  During the fourth quarters of fiscal years2015 and 2014, the annual assessment of the recoverability of goodwill was performed and no impairment was indicated. 

The Company’s intangible assets subject to amortization consist primarily of acquired franchise agreements, intellectual propertyand other intangibles.  Amortization expense is calculated using the straight-line method over the asset’s expected useful life.  See note 5 - Goodwill and Other Intangibles for additional related disclosures.

F-8

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

Refranchising and Closureof Company Drive-Ins

Gains and losses from the sale or closure of Company Drive-Ins are recorded as “Other operating (income) expense, net” on the Consolidated Statements of Income. 

Revenue Recognition, Franchise Fees and Royalties

Revenue from Company Drive-In sales is recognized when food and beverage products are sold.  Company Drive-In sales are presented net of sales tax and other sales-related taxes.

The Company’s gift card program serves all Sonic Drive-Ins and is administered by the Company on behalf of a system advertising fund.  The Company records a liability in the period in which a gift card is sold.The gift cards do not have expiration dates.  As gift cards are redeemed, the liability is reduced with revenue recognized on redemptions at Company Drive-Ins.  Breakage is the amount on a gift card that is not expected to be redeemed and that the Company is not required to remit to a state under unclaimed property laws.  The Company estimates breakage based upon the historical trend in redemption patterns from previously sold gift cards.  The Company’s policy is to recognize the breakage, using the delayed recognition method, when it is apparent that there is a remote likelihood the gift card balance will be redeemed.  The Company reduces the gift card liability for the estimated breakage and uses that amount to defray the costs of operating the gift card program.  There is no income recognized on unredeemed gift card balances. Costs to administer the gift card program, net of breakage, are included in the receivables from advertising funds as set forth in note 4 – Accounts and Notes Receivable.  Such costs were not material in fiscal years 2015, 2014 and 2013.

Franchise fees are recognized in income when the Company has substantially performed or satisfied all material services or conditions relating to the sale of the franchise and the fees are nonrefundable.  Development fees are nonrefundable and are recognized in income on a pro-rata basis when the conditions for revenue recognition under the individual development agreements are met.  Both franchise fees and development fees are generally recognized upon the opening of a Franchise Drive-In or upon termination of the agreement between the Company and the franchisee.

The Company’s franchisees pay royalties based on a percentage of sales.  Royalties are recognized as revenue when they are earned.  

Advertising Costs

Costs incurred in connection with advertising and promoting the Company’s products are included in other operating expenses and are expensed as incurred.  Such costs amounted to $24.5million in fiscal year 2015 and to $22.4 millionin each of fiscal years 2014 and 2013.

Under the Company’s franchise agreements, both Company Drive-Ins and Franchise Drive-Ins must contribute a minimum percentage of revenues to a national media production fund (“Sonic Brand Fund”) and spend an additional minimum percentage of gross revenues on advertising, either directly or through Company-required participation in advertising cooperatives.  A significant portion of the advertising cooperative contributions isremitted to theSystem Marketing Fund, which purchases advertising on national cable and broadcast networks and local broadcast networks and also funds other national media expenses and sponsorship opportunities.  As stated in the terms of existing franchise agreements, these funds do not constitute assets of the Company, and the Company acts with limited agency in the administration of these funds. Accordingly, neither the revenuesand expenses nor the assets and liabilities of the advertising cooperatives, the Sonic Brand Fund or the System Marketing Fund are included in the Company’s consolidated financial statements.  However, all advertising contributions by Company Drive-Ins are recorded as expense on the Company’s financial statements.

F-9

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

Under the Company’s franchise agreements, the Company is reimbursed by the Sonic Brand Fund for costs incurred to administer the fund at an amount not to exceed 15% of the Sonic Brand Fund’s gross receipts.  Reimbursements from the Sonic Brand Fund are offset against selling, general and administrative expenses and totaled $5.0 million, $4.4 million and $4.2 million in fiscal years 2015, 2014 and 2013, respectively.

Operating Leases

Rent expense is recognized on a straight-line basis over the expected lease term, including cancelable option periods when it is deemed to be reasonably assured that the Company would incur an economic penalty for not exercising the options.  Within the terms of some of the leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods.  The effects of the holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term, which includes cancelable option periods when appropriate.  The lease term commences on the date when the Company has the right to control the use of the leased property, which can occur before rent payments are due under the terms of the lease.  Contingent rent is generally based on sales levels and is accrued at the point in time it is probable that such sales levels will be achieved.

Stock-Based Compensation

The Company grants incentive stock options (“ISOs”), non-qualified stock options (“NQs”) and restricted stock units (“RSUs”).  For grants of NQs and RSUs, the Company expects to recognize a tax benefit upon exercise of the option or vesting of the RSU.  As a result, a tax benefit is recognized on the related stock-based compensation expense for these types of awards.  For grants of ISOs, a tax benefit only results if the option holder has a disqualifying disposition.  As a result of the limitation on the tax benefit for ISOs, the tax benefit for stock-based compensation will generally be less than the Company’s overall tax rate and will vary depending on the timing of employees’ exercises and sales of stock. 

Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the requisite service period of the award, generally the vesting period of the grant.  For additional information on stock-based compensation see note 13 - Stockholders’ Equity.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date.

Income tax benefits credited to equity relate to tax benefits associated with amounts that are deductible for income tax purposes but do not affect earnings.  These benefits are principally generated from employee exercises of NQs, the vesting of RSUs, and disqualifying dispositions of ISOs.

The threshold for recognizing the financial statement effects of a tax position is when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority.  Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority.  Interest and penalties related to unrecognized tax benefits are included in income tax expense.

Additional information regarding the Company’s unrecognized tax benefits is provided in note 12 - Income Taxes.

F-10

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

Fair Value Measurements

The Company’s financial assets and liabilities consist of cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt.  The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates their carrying amounts due to the short-term nature of these assets and liabilities. 

The following methods and assumptions were used by the Company in estimating fair values of its financial instruments:

· Notes receivable - As of August 31, 2015 and 2014, the carrying amounts of notes receivable (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts.

· Long-term debt - The Company prepares a discounted cash flow analysis for its fixed rate borrowings to estimate fair value each quarter.  This analysis uses Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes.  The fair value estimate required significant assumptions by management.  Management believes this fair value is a reasonable estimate.  For more information regarding the Company’s long-term debt, see note 10- Debt and note 11- Fair Value of Financial Instruments.

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis, which means these assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests.  For the Company, these items primarily include long-lived assets, goodwill and other intangible assets.  Refer to sections “Accounting for Long-Lived Assets”and “Goodwill and Other Intangible Assets,” discussed above, for inputs and valuation techniques used to measure the fair value of these nonfinancial assets.  The fair value was based upon management’s assessment as well as independent market value assessments which involved Level 2 and Level3 inputs.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which requires entities to recognize revenue in the way it expects to be entitled for the transfer of promised goods or services to customers.  The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective.  This pronouncement is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The update permits the use of either the retrospective or cumulative effect transition method, with early application not permitted.  The Company is currently evaluating the effect that this pronouncement will have on its financial statements and related disclosures.

In April 2015, FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.”  This update requires debt issuance costs to be presented in the balance sheet as a reduction of the related liability rather than an asset.  This pronouncement is effective for reporting periods beginning after December 15, 2015, including interim periods within that reporting period, and is to be applied retrospectively; early adoption is permitted.  The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

In April 2015, FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.”  The guidance provides clarification on whether a cloud computing arrangement includes a software license.  If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract.  The update is effective for reporting periods beginning after December 15, 2015.  The Company is currently evaluating the effect that this pronouncement will have on its financial statements and related disclosures.

F-11

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

2.  Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Fiscal year ended August 31,
	2015		2014		2013
Numerator:
Net income	$	64,485	$	47,916	$	36,701
Denominator:
Weighted average common shares outstanding– basic		52,572		55,164		56,384
Effect of dilutive employee stock options and
unvested restricted stock units		1,381		1,455		807
Weighted average common shares – diluted		53,953		56,619		57,191
Net income per common share – basic	$	1.23	$	0.87	$	0.65
Net income per common share – diluted	$	1.20	$	0.85	$	0.64
Anti-dilutive securities excluded(1)		342		988		3,278
—————————

(1) Anti-dilutive securities consist of stock options and unvested restricted stock units that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive.

3.  Impairment of Long-Lived Assets

During the fiscal year ended August 31, 2015, the Company identified impairments for certain drive-in assets and surplus property through regular quarterly reviews of long-lived assets.  During the fiscal years ended August31,2014 and 2013, the Company identified impairments for certain brand technology assets and surplus property through regular quarterly reviews of long-lived assets.  The recoverability of Company Drive-Ins is assessed by estimating the undiscounted net cash flows expected to be generated over the remaining life of the Company Drive-Ins.  This involves estimating same-store sales and margins for the cash flow periods.  When impairment exists, the carrying value of the asset is written down to fair value.  

In fiscal years 2015, 2014 and 2013, the Company recorded $1.4 million, $0.1 million and $1.8 million, respectively, in provisions for impairment resulting from the assessment of certain drive-in assets and surplus properties.  These write-downs were completed to reduce the carrying amount of these properties to fair value.

The Company’s assessment in fiscal year 2013 resulted in provisions for impairment totaling $1.8 million.  Of this total, $1.6 million related to the write-off of assets associated with a change in the vendor providing technology for the Sonic system’s new point-of-sale technology.  The remaining $0.2 million reflects reducing the carrying amount of surplus properties to fair value.

F-12

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

4.  Accounts and Notes Receivable

Accounts and notes receivable consist of the following:

	August 31,		August 31,
	2015		2014
Current Accounts and Notes Receivable:
Royalties and other trade receivables	$	19,713	$	18,292
Notes receivable from franchisees		996		1,468
Receivables from advertising funds		4,965		5,597
Other		6,977		9,068
Accounts and notes receivable, gross		32,651		34,425
Allowance for doubtful accounts and notes receivable		(1,074)		(1,592)
Accounts and notes receivable, net	$	31,577	$	32,833
Noncurrent Notes Receivable:
Receivables from franchisees	$	5,676	$	4,688
Receivables from advertising funds		1,571		3,646
Allowance for doubtful notes receivable		(31)		(179)
Notes receivable, net	$	7,216	$	8,155

The Company’s receivables are primarily due from franchisees, all of whom are in the restaurant business.  Substantially all of the notes receivable from franchisees are collateralized by real estate or equipment.

5.  Goodwill andOther Intangibles

As of August 31, 2015, the Company had $77.1 million of goodwill.

The changes in the carrying amount of goodwill were as follows:

	August 31,
	2015		2014
Balance at beginning of year	$	77,093	$	77,093
Goodwill acquired during the year		65		-
Goodwill disposed of related to the sale of Company Drive-Ins		(82)		-
Balance at end of year	$	77,076	$	77,093

The gross carrying amount of franchise agreements, intellectual property, franchise fees and other intangibles subject to amortization was $10.4 million and $10.3 million at August 31, 2015 and 2014, respectively, and is included in other assets in the accompanying consolidated balance sheets.  Accumulated amortization related to these intangible assets was $5.9 million and $5.0 million at August 31, 2015 and 2014, respectively.  Intangible assets amortization expense was $0.9 million for each of the fiscal years ended August 31, 2015, 2014 and 2013.  At August 31, 2015, the remaining weighted-average life of amortizable intangible assets was approximately 10 years.  Estimated intangible assets amortization expense is $0.9 million annually for fiscal years 2016 and 2017 and $0.3 million for fiscal years 2018, 2019 and 2020.

F-13

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

6.  Other Operating Income and Expenses

During fiscal year 2013, the Company completed an assessment in advance of capital expenditures for planned technology initiatives and closed 12 lower-performing Company Drive-Ins as of August31,2013, resulting in a loss of $2.4 million.  The loss included rent accruals for the remaining lease term, write-down of real estate and other costs associated with store closures.  Additionally, in the second quarter of fiscal year 2013, a franchisee purchased land and buildings leased or subleased from the Company relating to previously refranchised drive-ins.  At the time of the sale, these assets had a carrying value of $38.4million.  The Company received $29.7million in cash at closing and received the remaining $8.7million through the combination of a note receivable and a direct financing lease, all of which were repaid as of August31,2014.  In conjunction with the sale and the assignment of third-party leases, the Company removed its escalating lease liability related to the sold properties, which resulted in a small gain and partially offset the drive-in closure loss described above.

7.  Leases

Leasing Arrangements as a Lessor

The Company’s leasing activities consist principally of leasing certain land and buildings as well as subleasing certain buildings to franchise operators.  The land and building portions of all leases are classified as operating leases with lease terms expiring through September 2030.  These leases include provisions for contingent rentals that may be received on the basis of a percentage of sales in excess of stipulated amounts.  Income is not recognized on contingent rentals until sales exceed the stipulated amounts.  Some leases contain escalation clauses over the lives of the leases.  For property owned by third parties, the lease term runs concurrently with the term of the third-party lease arrangement.  Most of the leases contain renewal options at the end of the initial term for periods of five years. 

Future minimum rental payments receivable as of August 31, 2015, are as follows:

	Operating
Years ended August 31:
2016	$	5,905
2017		6,245
2018		6,667
2019		7,084
2020		7,440
Thereafter		36,481
	$	69,822

Leasing Arrangements as a Lessee

Certain Company Drive-Ins lease land and buildings from third parties.  These leases, with lease terms expiring through August 2030, include provisions for contingent rents that may be paid on the basis of a percentage of sales in excess of stipulated amounts.  For the majority of leases, the land portions are classified as operating leases, and the building portions are classified as capital leases.

F-14

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

Future minimum rental payments required under operating leases and maturities under capital leases that have initial or remaining noncancelable lease terms in excess of one year as of August 31, 2015, are as follows:

	Operating		Capital
Years ended August 31:
2016	$	11,374	$	5,254
2017		10,992		5,004
2018		11,058		4,401
2019		10,767		3,517
2020		10,207		3,177
Thereafter		68,998		9,883
Total minimum lease payments(1)	$	123,396		31,236
Less amount representing interest averaging 6.3%				(6,796)
Present value of net minimum lease payments				24,440
Less amount due within one year				(3,677)
Amount due after one year			$	20,763
—————————

(1)  Minimum payments have not been reduced by future minimum rentals receivable under noncancelable operating and capital subleases of $9.5 million and $1.4 million, respectively.  They also do not include contingent rentals which may be due under certain leases.  Contingent rentals for capital leases amounted to $1.0 million in fiscal year 2015 and to $0.8 million in fiscal years 2014 and 2013.

Total rent expense for all operating leases consists of the following for the years ended August 31:

	2015		2014		2013
Minimum rentals	$	12,659	$	12,449	$	13,154
Contingent rentals		174		161		93
Total rent expense		12,833		12,610		13,247
Less sublease rentals		(2,235)		(1,905)		(1,747)
Net rent expense	$	10,598	$	10,705	$	11,500

F-15

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

8.Property, Equipment and Capital Leases

Property, equipment and capital leases consist of the following at August 31:

	Estimated
	Useful Life	2015		2014
Property, equipment and capital leases:
Land		$	157,861	$	156,336
Buildings and improvements	8 – 25 yrs		343,256		345,309
Drive-In equipment	5 – 7 yrs		139,801		136,556
Brand technology development and other equipment	2 – 5 yrs		92,860		82,575
Property and equipment, at cost			733,778		720,776
Accumulated depreciation			(330,219)		(298,580)
Property and equipment, net			403,559		422,196
Capital leases	Life of lease		48,079		50,243
Accumulated amortization			(30,232)		(30,470)
Capital leases, net			17,847		19,773
Property, equipment and capital leases, net		$	421,406	$	441,969

Depreciation expense for property and equipment was $41.7million,$37.6 million and $35.6 million for fiscal years 2015,  2014 and 2013, respectively.  Land, buildings and equipment with a carrying amount of $165.8 million at August 31, 2015, were leased under operating leases to franchisees and other parties.  The accumulated depreciation related to these buildings and equipment was $63.1 million at August 31, 2015.  Amortization expense related to capital leases is included within “Depreciation and amortization” on the Consolidated Statements of Income.  As of August 31, 2015, the Company had three drive-ins under construction with costs to complete.

Interest incurred in connection with the construction of new drive-ins and technology projects is capitalized.  Capitalized interest was $0.4 million,  $0.5 million and $0.7 million for fiscal years2015, 2014 and 2013, respectively.

9.  Accrued Liabilities

Accrued liabilities consist of the following at August 31:

	2015		2014
Wages and employee benefit costs	$	20,501	$	14,302
Property taxes, sales and use taxes and employment taxes		9,282		9,570
Unredeemed gift cards		9,285		8,577
Dividend payable		13		4,852
Other		11,633		6,380
	$	50,714	$	43,681

F-16

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

10.  Debt

Long-term debt consists of the following at August 31:

	2015		2014
Class A-2 2013-1 senior secured fixed rate notes	$	155,000	$	155,000
Class A-2 2011-1 senior secured fixed rate notes		272,488		282,238
Class A-1 2011-1 senior secured variable funding notes		10,500		-
Other		40		80
		438,028		437,318
Less long-term debt due within one year		(9,790)		(9,791)
Long-term debt due after one year	$	428,238	$	427,527

At August 31, 2015, future maturities of long-term debt were $9.8 million for fiscal year 2016, $9.7 million for fiscal year 2017, $263.5 million for fiscal year 2018, no maturities for fiscal year 2019 and $155.0 million for fiscal year 2020.

On May 20, 2011, in a private transaction, various subsidiaries of the Company (the “Co-Issuers”) issued $500 million of Series 2011-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2011 Fixed Rate Notes”), which bear interest at 5.4% per annum.  The 2011 Fixed Rate Notes have an expected life of seven years with an anticipated repayment date in May 2018.  The Co-Issuers also entered into a securitized financing facility of Series 2011-1 Senior Secured Variable Funding Notes, Class A-1 (the “2011 Variable Funding Notes” and, together with the 2011 Fixed Rate Notes, the “2011 Notes”).  This revolving credit facility allows for the issuance of up to $100 million of 2011 Variable Funding Notes and certain other credit instruments, including letters of credit.  Interest on the 2011 Variable Funding Notes is based on the one-month London Interbank Offered Rate (“LIBOR”) or Commercial Paper (“CP”), depending on the funding source, plus the base spread mentioned below, per annum.  There is a 0.5% annual commitment fee payable monthly on the unused portion of the 2011 Variable Funding Notes facility. 

In the second quarter of fiscal year 2013, the Co-Issuers made a debt prepayment, at par, of $20.0 million on the 2011 Fixed Rate Notes.  In the fourth quarter of fiscal year 2013, in a private transaction the Co-Issuers refinanced and paid $155 million of the 2011 Fixed Rate Notes with the issuance of $155 million of Series 2013-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2013 Fixed Rate Notes”), which bear interest at 3.75% per annum.  The 2013 Fixed Rate Notes have an expected life of seven years, interest payable monthly, no scheduled principal amortization and an anticipated repayment date in July 2020.  Additionally, the Co-Issuers extended the 2011 Variable Funding Notes’ renewal date by two years to May 2018 and decreased the base spread from 3.75% to 3.50% in the fourth quarter of fiscal year 2013. 

As of August 31, 2015, the weighted-average interest cost of the 2011 Fixed Rate Notes, 2011 Variable Funding Notes and 2013 Fixed Rate Notes was 5.9%,  4.1% and 4.1%, respectively.  The weighted-average interest cost includes the effect of the loan origination costs.

In fiscal year 2013, the debt prepayment and the partial debt refinancing resulted in a pro-rata write-off of loan origination costs from the 2011 Fixed Rate Notes, representing a majority of the $4.4 million loss which is reflected in “Net loss from early extinguishment of debt” on the Consolidated Statements of Income.  An additional $4.1 million in debt origination costs was capitalized in conjunction with the 2013 Fixed Rate Notes.  Loan costs are being amortized over each note’s expected life. 

While the 2011 Notes and the 2013 Fixed Rate Notes are structured to provide for seven-year lives from their original issuance dates, they have legal final maturity dates of May 2041 and July 2043, respectively.  The Company

F-17

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

intends to repay or refinance the 2011 Notes and the 2013 Fixed Rate Notes on or before the end of their expected lives.  If the Company prepays the debt prior to the anticipated repayment date the Company may be required to pay a prepayment penalty under certain circumstances.  In the event the 2011 Notes and the 2013 Fixed Rate Notes are not paid in full by the end of their expected lives, they are subject to an upward adjustment in the interest rate of at least 5% per annum.  In addition, principal payments will accelerate by applying all of the royalties, lease revenues and other fees securing the debt, after deducting certain expenses, until the debt is paid in full.  Also, any unfunded amount under the 2011 Variable Funding Notes will become unavailable.

The Co-Issuers and Sonic Franchising LLC (the “Guarantor”) are existing special purpose, bankruptcy remote, indirect subsidiaries of Sonic Corp. that holdsubstantially all of Sonic's franchising assets and real estate.  As of August 31, 2015, assets for these combined indirect subsidiaries totaled $318.2 million, including receivables for royalties, certain Company and Franchise Drive-In real estate, intangible assets and restricted cash balances of $19.8 million.  The 2011 Notes and the 2013 Fixed Rate Notes are secured by franchise fees, royalty payments and lease payments, and the repayment of the 2011 Notes and the 2013 Fixed Rate Notes is expected to be made solely from the income derived from the Co-Issuer's assets.  In addition, the Guarantor, a Sonic Corp. subsidiary that acts as a franchisor, has guaranteed the obligations of the Co-Issuers under the 2011 Notes and the 2013 Fixed Rate Notes and pledged substantially all of its assets to secure those obligations.

Neither Sonic Corp., the ultimate parent of the Co-Issuers and the Guarantor, nor any other subsidiary of Sonic, guarantees or is in any way liable for the obligations of the Co-Issuers under the 2011 Notes and the 2013 Fixed Rate Notes.  The Company has, however, agreed to cause the performance of certain obligations of its subsidiaries, principally related to managing the assets included as collateral for the 2011 Notes and the 2013 Fixed Rate Notes and certain indemnity obligations relating to the transfer of the collateral assets to the Co-Issuers.

The 2011 Notes and the 2013 Fixed Rate Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) required actions to better secure collateral upon the occurrence of certain performance-related events, (ii) application of certain disposition proceeds as note prepayments after a set time is allowed for reinvestment, (iii) maintenance of specified reserve accounts, (iv) maintenance of certain debt service coverage ratios, (v) optional and mandatory prepayments upon change in control, (vi) indemnification payments for defective or ineffective collateral, and (vii) covenants relating to recordkeeping, access to information and similar matters.  If certain covenants or restrictions are not met, the 2011 Notes and the 2013 Fixed Rate Notes are subject to customary accelerated repayment events and events of default.  Although management does not anticipate an event of default or any other event of noncompliance with the provisions of the debt, if such event occurred, the unpaid amounts outstanding could become immediately due and payable.

11.  Fair Value of Financial Instruments

The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The Company has no financial liabilities that are required to be measured at fair value on a recurring basis.

The Company categorizes its assets and liabilities recorded at fair value based upon the following fair value hierarchy established by FASB:

· Level 1 valuations use quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.  An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

· Level 2 valuations use inputs other than actively quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: (a) quoted prices for similar assets or liabilities in active markets, (b) quoted prices for identical or similar assets or liabilities F-18  

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

in markets that are not active, (c) inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves observable at commonly quoted intervals and (d) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

· Level 3 valuations use unobservable inputs for the asset or liability. Unobservable inputs are used to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The Company’s cash equivalents are carried at cost which approximates fair value and totaled $41.1 million and $34.4 million at August 31, 2015 and 2014, respectively.  This fair value is estimated using Level 1 methods.

At August 31, 2015, the fair value of the Company’s 2011 Fixed Rate Notes and 2013 Fixed Rate Notes approximated the carrying value of $428.1 million, including accrued interest.  The fair value of the Company’s 2011 Variable Funding Notes at August 31, 2015 approximated the carrying value of $10.5 million, including accrued interest.  The fair value of the 2011 Fixed Rate Notes,  2013 Fixed Rate Notes and the 2011 Variable Funding Notes is estimated using Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes.

12.  Income Taxes

The Company’s income before the provision for income taxes is classified by source as domestic income.

The components of the provision for income taxes consist of the following for the years ended August 31:

	2015		2014		2013
Current:
Federal	$	14,597	$	16,580	$	16,741
State		3,576		3,490		2,688
		18,173		20,070		19,429
Deferred:
Federal		10,592		5,328		439
State		(1,528)		450		(270)
		9,064		5,778		169
Provision for income taxes	$	27,237	$	25,848	$	19,598

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate due to the following for the fiscal years ended August 31:

	2015		2014		2013
Amount computed by applying a tax rate of 35%	$	32,103	$	25,818	$	19,705
State income taxes (net of federal income tax benefit)		1,330		2,562		1,572
Employment related and other tax credits, net		(2,096)		(1,537)		(1,572)
Federal tax benefit of statutory tax deduction		(4,093)		-		-
Other		(7)		(995)		(107)
Provision for income taxes	$	27,237	$	25,848	$	19,598

F-19

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

Deferred tax assets and liabilities consist of the following at August 31:

	2015		2014
Deferred tax assets:
Allowance for doubtful accounts and notes receivable	$	411	$	677
Leasing transactions		3,260		3,252
Deferred income		2,810		1,773
Accrued liabilities		5,630		3,399
Stock compensation		2,831		4,921
Other		541		688
State net operating losses		14,222		11,305
Total deferred tax assets		29,705		26,015
Valuation allowance		(12,041)		(11,305)
Total deferred tax assets after valuation allowance	$	17,664	$	14,710
Deferred tax liabilities:
Prepaid expenses	$	(1,315)	$	(1,498)
Investment in partnerships, including differences in capitalization,
depreciation and direct financing leases		(3,711)		(2,954)
Property, equipment and capital leases		(31,167)		(24,655)
Intangibles and other assets		(20,341)		(19,514)
Debt extinguishment		(2,515)		(3,353)
Total deferred tax liabilities		(59,049)		(51,974)
Net deferred tax liabilities	$	(41,385)	$	(37,264)
Net deferred tax assets and liabilities are classified as follows:
Current	$	2,164	$	347
Noncurrent		(43,549)		(37,611)
Total	$	(41,385)	$	(37,264)

State net operating loss carryforwards expire beginning in December 2015 through May 2036.  Management does not believe the Company will be able to realize the state net operating loss carryforwards utilizing future income exclusive of the reversal of existing deferred tax liabilities and therefore has provided a valuation allowance of $12.0 million and $11.3 million as of August 31, 2015 and 2014, respectively.

As of August 31, 2015 and 2014, the Company had approximately $3.7 million and $2.5 million of unrecognized tax benefits, including approximately $0.4 million and $0.4 million of accrued interest and penalty, respectively.  If recognized, these benefits would favorably impact the effective tax rate.  The liability for unrecognized tax benefits increased $1.2 million in fiscal year 2015.  The increase was primarily related to recognition of an uncertain position related to current and prior years’ federal tax deductions.  This entire change in balance impacted the Company’s tax rate.

The Company recognizes estimated interest and penalties as a component of its income tax expense, net of federal benefit, as a component of “Provision for income taxes” in the Consolidated Statements of Income.  During the year ended August 31, 2015, the Company recognized net expenses of $0.1 million.  The Company recognized negligible net expenses in fiscal year 2014 and a net benefit of $0.4 million in fiscal year 2013.

F-20

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

A reconciliation of unrecognized tax benefits is as follows for fiscal years ended August 31:

	2015		2014
Balance at beginning of year	$	2,461	$	2,583
Additions based on tax positions related to the current year		254		255
Additions for tax positions of prior years		937		115
Reductions for tax positions of prior years		-		(492)
Balance at end of year	$	3,652	$	2,461

The Company or one of its subsidiaries is subject to U.S. federal income tax and income tax in multiple U.S. state jurisdictions.  At August 31, 2015, the Company was subject to income tax examinations for its U.S. federal income taxes and for state and local income taxes generally after fiscal year 2009.  The Company anticipates that the results of any examinations or appeals, combined with the expiration of applicable statutes of limitations and the additional accrual of interest related to unrecognized benefits on various return positions taken in years still open for examination, could result in a change to the liability for unrecognized tax benefits during the next 12 months ranging from an increase of $0.1 million to a decrease of $3.0 million depending on the timing and terms of the examination resolutions. 

13.  Stockholders’ Equity

Employee Stock Purchase Plan

The Company has an employee stock purchase plan (“ESPP”) that permits eligible employees to purchase the Company’s common stock at a 15% discount from the stock’s fair market value.  Participating employees may purchase shares of common stock each year up to the lesser of 10% of their base compensation or $25 thousand in the stock’s fair market value.  At August 31, 2015, 0.8 million shares were available for grant under the ESPP.

Stock-Based Compensation

The Sonic Corp. 2006 Long-Term Incentive Plan (the “2006 Plan”) provides flexibility to award various forms of equity compensation, such as stock options, stock appreciation rights, performance shares, restricted stock units (“RSUs”) and other share-based awards.  At Sonic’s annual meeting of stockholders on January 16, 2014, the stockholders approved an amendment to the 2006 Plan which added an additional 6.6 million shares of common stock available for issuance.  At August 31, 2015, 7.6 million shares were available for grant under the 2006 Plan.  The Company grants stock options with contractual terms of seven to 10 years and a vesting period of three years and RSUs also with a vesting period of three years.  Effective in January 2013, awards granted to the Company’s Board of Directors vest over one year.  The Company’s policy is to issue shares from treasury stock to satisfy stock option exercises, the vesting of RSUs and shares issued under the ESPP.

Total stock-based compensation cost recognized for fiscal years 2015, 2014 and 2013 was $3.5 million, $3.7 million and $3.6 million, respectively, net of related income tax benefits of $1.0 million, $1.7 million and $1.2 million, respectively.  At August 31, 2015, total remaining unrecognized compensation cost related to unvested stock-based arrangements was $6.3 million and is expected to be recognized over a weighted average period of 2.1 years.

The Company measures the compensation cost associated with stock option-based payments by estimating the fair value of stock options as of the grant date using the Black-Scholes option pricing model.  The Company believes the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options granted during 2015, 2014 and 2013.  Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive equity awards.  The fair value of RSUs granted is equal to the Company’s closing stock price on the date of the grant.

F-21

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

The per share weighted average fair value of stock options granted during 2015, 2014 and 2013 was $8.83,  $6.82 and $4.69, respectively.  In addition to the exercise and grant date prices of the awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants in the respective periods are listed in the table below:

	2015		2014		2013
Expected term (years)	5.0		4.7		4.9
Expected volatility	34	%	37	%	48	%
Risk-free interest rate	1.3	%	1.5	%	0.8	%
Expected dividend yield	1.2	%	-	%	-	%

The Company estimates expected volatility based on historical daily price changes of the Company’s common stock for a period equal to the current expected term of the options.  The risk-free interest rate is based on the United States treasury yields in effect at the time of grant corresponding with the expected term of the options.  The expected option term is the number of years the Company estimates that options will be outstanding prior to exercise considering vesting schedules and historical exercise patterns. 

Stock Options

A summary of stock option activity under the Company’s stock-based compensation plans for the year ended August 31, 2015, is presented in the following table:

	Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (Yrs.)		Aggregate Intrinsic Value
Outstanding September 1, 2014	4,160	$	12.73
Granted	424		31.08
Exercised	(1,519)		14.56
Forfeited or expired	(192)		19.77
Outstanding at August 31, 2015	2,873	$	14.00	3.38	$	38,892
Exercisable at August 31, 2015	2,119	$	10.46	2.55	$	35,035

Proceeds from the exercise of stock options for fiscal years 2015, 2014 and 2013 were $18.7million, $17.4million and $16.3million, respectively.  The total intrinsic value of options exercised during the years ended August31,2015, 2014 and 2013 was $21.8 million, $13.0million and $3.8million, respectively.

F-22

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

Restricted Stock Units

A summary of the Company’s RSU activity during the year ended August 31, 2015 is presented in the following table:

	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding September 1, 2014	46	$	16.78
Granted	53		30.26
Vested	(33)		15.19
Forfeited	-
Outstanding at August 31, 2015	66	$	28.49

The aggregate fair value of RSUs that vested was $1.1 million during the years ended August31,2015 and 2014 and was $0.9 million for the year ended August31,2013.

Share Repurchase Programs

In August 2012, the Company’s Board of Directors approved a share repurchase program authorizing the Company to purchase up to $40 million of its outstanding shares of common stock.  In January 2013, the Board of Directors increased the repurchase program to $55 million in authorized purchases through August 31, 2013.  During fiscal year 2013, approximately 3.3 million shares were acquired pursuant to this program for a total cost of $35.5 million; this is in addition to the approximately 0.1million shares that were acquired for a total cost of $1.1 million during the fourth quarter of fiscal year 2012. 

In August 2013, the Board of Directors extended the share repurchase program through August 31, 2014, with a total authorization of up to $40 million of its outstanding shares of common stock.  In January 2014, the Company’s Board of Directors approved an incremental $40 million authorization for the program that allowed for up to $80million of common stock to be repurchased through August 31, 2014.  As part of this program, in February2014, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to purchase $40million of the Company’s common stock.  In exchange for a $40 million up-front payment, the financial institution delivered approximately 2.1 million shares.  During March2014, the ASR purchase period concluded with no additional shares delivered, resulting in an average price per share of $19.13.  The Company completed this share repurchase program during fiscal year2014, with approximately 4.1 million shares repurchased, resulting in an average price per share of $19.61. 

In August 2014, the Board of Directors further extended the Company’s share repurchase program, authorizing the Company to purchase up to $105 million of its outstanding shares of common stock beginning September 1, 2014 through August 31, 2015.  In October 2014, the Company entered into an ASR agreement with a financial institution to purchase $15 million of the Company’s common stock.  In exchange for a $15 million up-front payment, the financial institution delivered approximately 0.6 million shares.  During January2015, the ASR purchase period concluded.  The Company paid an additional $0.1 million with no additional shares delivered, resulting in an average price per share of $26.32.  In February 2015, the Company entered into additional ASR agreements with a financial institution to purchase $75 million of the Company’s common stock.  In exchange for a $75 million up-front payment, the financial institution delivered approximately 2.1 million shares.  The ASR transactions completed in July 2015 with 0.3 million additional shares delivered, resulting in an average price per share of $31.38.  The

F-23

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

Company reflected the ASR transactions as a repurchase of common stock for purposes of calculating earnings per share and as a forward contract indexed to its own common stock.  The forward contract met all of the applicable criteria for equity classification.

In August 2015, the Board of Directors further extended the Company’s share repurchase program, authorizing the Company to purchase up to $145 million of its outstanding shares of common stock through August 31, 2016. 

Including shares repurchased through the ASR transactions described above, during the fiscal year 2015, approximately 4.2 million shares were repurchased for a total cost of $123.8 million, resulting in an average price per share of $29.46.  The total remaining amount authorized under the share repurchase program, as of August 31, 2015, was $126.3 million.

Share repurchases will be made from time to time in the open market or otherwise, including through an accelerated share repurchase program, under the terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions. The share repurchase program may be extended, modified, suspended or discontinued at any time.  We plan to fund the share repurchase program from existing cash on hand at August 31, 2015, cash flows from operations and borrowings under our 2011 Variable Funding Notes.

Dividends

In August 2014, the Company initiated a quarterly cash dividend program and paid a quarterly dividend of $0.09 per share of common stock, totaling $18.8million for the fiscal year.  Subsequent to the end of the fiscal year, the Company declared a quarterly dividend of $0.11 per share of common stock to be paid to stockholders of record as of the close of business on November11, 2015, with a payment date of November 20, 2015.  The Company did not pay any cash dividends on its common stock prior to fiscal 2015.  The future declaration of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of the Company’s Board of Directors.

14.  Employee Benefit and Cash Incentive Plans

The Company sponsors a qualified defined contribution 401(k) plan for employees meeting certain eligibility requirements.  Under the plan, employees are entitled to make pre-tax contributions.  The Company matches an amount equal to the employee’s contributions up to a maximum of 6% of the employee’s salaries depending on years of service.  The Company’s contributions during fiscal years 2015,  2014 and 2013 were $1.6 million, $1.3 million and $1.9 million, respectively. 

The Company has short-term and long-term cash incentive plans (the “Incentive Plans”) that apply to certain employees, and grants of awards under the Incentive Plans are at all times subject to the approval of the Company’s Board of Directors.  Under certain awards pursuant to the Incentive Plans, if predetermined earnings goals are met, a predetermined percentage of the employee’s salary may be paid in the form of a bonus.  The Company recognized as expense incentive bonuses of $12.4 million, $9.5 million and $8.2 million during fiscal years 2015,  2014 and 2013, respectively.

F-24

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

15.  Commitments and Contingencies

Litigation

The Company is involved in various legal proceedings and has certain unresolved claims pending.  Based on the information currently available, management believes that all claims currently pending are either covered by insurance or would not have a material adverse effect on the Company’s business, operating results or financial condition.

Note Repurchase Agreement

On December 20, 2013, the Company extended a note purchase agreement to a bank that serves to guarantee the repayment of a franchisee loan, with a term through 2018, and also benefits the franchisee with a lower financing rate.  In the event of default by the franchisee, the Company would purchase the franchisee loan from the bank, thereby becoming the note holder and providing an avenue of recourse with the franchisee.  The Company recorded a liability for this guarantee which was based on the Company’s estimate of fair value.  As of August 31, 2015, the balance of the franchisee’s loan was $6.0 million.

Lease Commitments

The Company has obligations under various operating lease agreements with third-party lessors related to the real estate for certain Company Drive-In operations that were sold to franchisees.  Under these agreements, which expire through 2029, the Company remains secondarily liable for the lease payments for which it was responsible as the original lessee.  As of August 31, 2015, the amount remaining under these guaranteed lease obligations totaled $8.0 million.  At this time, the Company does not anticipate any material defaults under the foregoing leases; therefore, no liability has been provided. 

Purchase Obligations

At August 31, 2015, the Company had purchase obligations of approximately $283.2 million which primarily related to its estimated share of system-wide commitments for food products.  The Company has excluded agreements that are cancelable without penalty.

F-25

SONIC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2015, 2014 and 2013

(In thousands, except per share data)

16.  Selected Quarterly Financial Data (Unaudited)

	First Quarter				Second Quarter				Third Quarter					Fourth Quarter
	2015		2014		2015		2014			2015		2014		2015		2014
Total revenues	$	139,856	$	126,652	$	126,219	$	109,741		$	164,748	$	152,187	$	175,266	$	163,769
Income from operations		22,538		18,359		16,991		12,349			36,370		31,681		40,529		36,288
Net income(1)	$	10,085	$	8,208	$	7,662	$	4,107		$	20,442	$	16,776	$	26,296	$	18,825
Basic income
per share(2)	$	0.19	$	0.15	$	0.14	$	0.07		$	0.39	$	0.31	$	0.51	$	0.35
Diluted income
per share(2)	$	0.18	$	0.14	$	0.14	$	0.07		$	0.38	$	0.30	$	0.50	$	0.34
—————————

(1)Includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter of fiscal year 2015; a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter of fiscal year 2015; and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter of fiscal year 2015. Also includes a $0.5 million tax benefit resulting from the IRS’s acceptance of a federal tax method change during the first quarter of fiscal year 2014.

(2)The sum of per share data may not agree to annual amounts due to rounding.

F-26

Sonic Corp.
Schedule II – Valuation and Qualifying Accounts
			Additions		Amounts
	Balance at		Charged to		Written Off
	Beginning of		Costs and		Against the		(Transfers)		Balance at
Description	Year		Expenses		Allowance		Recoveries		End of Year
		(In thousands)
Allowance for doubtful accounts and notes receivable
Fiscal years ended:
August 31, 2015	$	1,771		(81)		(601)		16	$	1,105
August 31, 2014		2,347		(434)		(142)		-		1,771
August 31, 2013	$	2,992		(367)		(278)		-	$	2,347
Accrued liability for drive-in closings and disposals
Fiscal years ended:
August 31, 2015	$	871		367		(422)		(9)	$	807
August 31, 2014		1,099		339		(546)		(21)		871
August 31, 2013	$	568		809		(249)		(29)	$	1,099

See accompanying Report of Independent Registered Pubic Accounting Firm.

F-27

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 23rdday of October,2015.

	Sonic Corp.
By:	/s/  J. Clifford Hudson
	J. Clifford Hudson
	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ J. Clifford Hudson	Chairman of the Board of Directors, Chief Executive Officer and President	October 23, 2015
J. Clifford Hudson, Principal Executive Officer
/s/ Claudia S. San Pedro	Executive Vice President and Chief Financial Officer	October 23, 2015
Claudia S. San Pedro,   Principal Financial Officer
/s/ Michelle E. Britten	Vice President and Controller	October 23, 2015
Michelle E. Britten,   Principal Accounting Officer
/s/ Tony D. Bartel	Director	October 23, 2015
Tony D. Bartel
/s/ Lauren R. Hobart	Director	October 23, 2015
Lauren R. Hobart
/s/ Kate S. Lavelle	Director	October 23, 2015
KateS.  Lavelle
/s/ J. Larry Nichols	Director	October 23, 2015
J. Larry Nichols
/s/ Federico F. Peña	Director	October 23, 2015
Federico F. Peña
/s/ Frank E. Richardson	Director	October 23, 2015
Frank E. Richardson
/s/ Robert M. Rosenberg	Director	October 23, 2015
Robert M. Rosenberg
/s/ Jeffrey H. Schutz	Director	October 23, 2015
Jeffrey H. Schutz
/s/ Kathryn L. Taylor	Director	October 23, 2015
Kathryn L. Taylor
/s/ Susan E. Thronson	Director	October 23, 2015
Susan E. Thronson

EXHIBIT INDEX

Exhibit Number and Description

21.01	Subsidiaries of the Company
23.01	Consent of Independent Registered Public Accounting Firm
23.02	Consent of Independent Registered Public Accounting Firm
31.01	Certification of Chief Executive Officer pursuant to SEC Rule 13a-14
31.02	Certification of Chief Financial Officer pursuant to SEC Rule 13a-14
32.01	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
32.02	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
101. INS	XBRL Instance Document
101. SCH	XBRL Taxonomy Extension Schema Document
101. CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF	XBRL Taxonomy Extension Definition Linkbase Document
101. LAB	XBRL Taxonomy Extension Label Linkbase Document
101. PRE	XBRL Taxonomy Extension Presentation Linkbase Document

EX-21.01

Exhibit 21.01

Subsidiaries of the Company

America’s Drive-In Brand Properties LLC, a Kansas limited liability company

America’s Drive-In Restaurants LLC, a Delaware limited liability company

SDI Interests Inc., an Oklahoma corporation

Sonic Capital LLC, a Delaware limited liability company

Sonic Franchising LLC, a Delaware limited liability company

Sonic Industries LLC, a Delaware limited liability company

Sonic Industries Services Inc., an Oklahoma corporation

Sonic Restaurants, Inc., an Oklahoma corporation

Sonic Technology Fund, L.L.C., an Oklahoma limited liability company

Sonic Value Card, L.L.C., a Virginia limited liability company

SPOTlight, LLC, an Oklahoma limited liability company

SRI Real Estate Holding LLC, a Delaware limited liability company

SRI Real Estate Properties LLC, a Delaware limited liability company

As of August 31, 2015, Sonic Restaurants, Inc. owned the majority interest in 13 general partnerships and one limited liability company, each of which operates a Sonic Drive-In restaurant.  The names of those 13general partnerships and one limited liability company have been omitted.

EX-23.01

Exhibit 23.01

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Sonic Corp.:

We consent to the incorporation by reference in the registration statements (Nos. 33 95716, 333-26359, 333-168623, 333-131450 and 333-195086) on Forms S-3 and S-8 of Sonic Corp. and subsidiaries of our reports dated October23,  2015, with respect to the consolidated balance sheets of Sonic Corp. and subsidiaries as of August31,2015 and 2014, and the related consolidated statements of income, stockholders’ equity, and cash flows for the yearsthen ended, and the related financial statement schedule II, and the effectiveness of internal control over financial reporting as of August 31, 2015, which reports appear in the August 31, 2015annual report on Form 10-K of Sonic Corp.

	/s/ KPMG LLP
Oklahoma City, Oklahoma
October 23,  2015

EX-23.02

Exhibit 23.02

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1)  Registration Statement (Form S-3 No. 33-95716) of Sonic Corp. for the registration of 1,420,000 shares of its common stock, and the related Prospectuses,

(2)  Registration Statement (Form S-8 No. 333-26359) pertaining to the Sonic Corp. Savings and Profit Sharing Plan,

(3)  Registration Statements (Forms S-8 No. 333-168623, No. 333-131450and No. 333-195086) pertaining to the Sonic Corp. 2006 Long-Term Incentive Plan,

of our report dated October 25, 2013, with respect to the 2013 consolidated statements of income, stockholders’ equity and cash flows and schedule of Sonic Corp., included in this Annual Report (Form 10-K) of Sonic Corp. for the year ended August 31, 2015.

	/s/ ERNST & YOUNG LLP
Oklahoma City, Oklahoma
October 23, 2015

EX-31.01

Exhibit 31.01

CERTIFICATION PURSUANT TO

SEC RULE 13a-14

I, J. Clifford Hudson, certify that:

1. I have reviewed this annual report on Form 10-K of Sonic Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 23, 2015

/s/ J. Clifford Hudson

J. Clifford Hudson

Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATION PURSUANT TO

SEC RULE 13a-14

I, Claudia S. San Pedro, certify that:

1. I have reviewed this annual report on Form 10-K of Sonic Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have asignificant role in the registrant’s internal control over financial reporting.

Date: October 23, 2015

/s/ Claudia S. San Pedro

Claudia S. San Pedro

Chief Financial Officer

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

The undersigned hereby certifies that to his knowledge the annual report of Sonic Corp. (the “Company”) filed with the Securities and Exchange Commission on the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly represents, in all material respects, the financial condition and results of operations of the Company.

Date: October 23, 2015

/s/ J. Clifford Hudson

J. Clifford Hudson

Chief Executive Officer

EX-32.02

Exhibit 32.02

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

The undersigned hereby certifies that to his knowledge the annual report of Sonic Corp. (the “Company”) filed with the Securities and Exchange Commission on the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly represents, in all material respects, the financial condition and results of operations of the Company.

Date: October 23, 2015

/s/ Claudia S. San Pedro

Claudia S. San Pedro

Chief Financial Officer

XML

Goodwill And Other Intangibles (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Goodwill And Other Intangibles [Abstract]
Goodwill	$ 77,076	$ 77,093	$ 77,093
Gross carrying amount of franchise agreements, intellectual property franchise fees and other intangibles	10,400	10,300
Accumulated amortization of intangible assets	5,900	5,000
Amortization of intangible assets	$ 900	$ 900	$ 900
Weighted-average life of amortizable intangible assets	10 years
Estimated intangible assets amortization expense, 2016	$ 900
Estimated intangible assets amortization expense, 2017	900
Estimated intangible assets amortization expense, 2018	300
Estimated intangible assets amortization expense, 2019	300
Estimated intangible assets amortization expense, 2020	$ 300

XML

Income Taxes (Provision For Income Taxes Computed By Applying The Statutory Federal Income Tax Rate) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Income Taxes [Abstract]
Amount computed by applying a tax rate of 35%	$ 32,103	$ 25,818	$ 19,705
State income taxes (net of federal income tax benefit)	1,330	2,562	1,572
Employment related and other tax credits, net	(2,096)	(1,537)	(1,572)
Federal tax benefit of statutory tax deduction	(4,093)
Other	(7)	(995)	(107)
Provision for income taxes	$ 27,237	$ 25,848	$ 19,598
Statutory federal income tax rate	35.00%

XML

Accrued Liabilities (Details) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Accrued Liabilities [Abstract]
Wages and employee benefit costs	$ 20,501	$ 14,302
Property taxes, sales and use taxes and employment taxes	9,282	9,570
Unredeemed gift cards	9,285	8,577
Dividend payable	13	4,852
Other	11,633	6,380
Accrued liabilities	$ 50,714	$ 43,681

XML

Income Taxes (Schedule Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Deferred tax assets:
Allowance for doubtful accounts and notes receivable	$ 411	$ 677
Leasing transactions	3,260	3,252
Deferred income	2,810	1,773
Accrued liabilities	5,630	3,399
Stock compensation	2,831	4,921
Other	541	688
State net operating losses	14,222	11,305
Total deferred tax assets	29,705	26,015
Valuation allowance	(12,041)	(11,305)
Total deferred tax assets after valuation allowance	17,664	14,710
Deferred tax liabilities:
Prepaid expenses	(1,315)	(1,498)
Investment in partnerships, including differences in capitalization, depreciation and direct financing leases	(3,711)	(2,954)
Property, equipment and capital leases	(31,167)	(24,655)
Intangibles and other assets	(20,341)	(19,514)
Debt extinguishment	(2,515)	(3,353)
Total deferred tax liabilities	(59,049)	(51,974)
Net deferred tax liabilities	(41,385)	(37,264)
Net deferred tax assets and liabilities are classified as follows:
Current	2,164	347
Noncurrent	(43,549)	(37,611)
Net deferred tax liabilities	$ (41,385)	$ (37,264)

XML

Property, Equipment And Capital Leases (Narrative) (Details) $ in Thousands	12 Months Ended
	Aug. 31, 2015 USD ($) item	Aug. 31, 2014 USD ($)	Aug. 31, 2013 USD ($)
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 733,778	$ 720,776
Accumulated depreciation related to buildings and equipment	330,219	298,580
Interest costs capitalized	400	500	$ 700
Property And Equipment [Member]
Property, Plant and Equipment [Line Items]
Depreciation expense	41,700	$ 37,600	$ 35,600
Leased To Franchisees And Other Parties [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	165,800
Accumulated depreciation related to buildings and equipment	$ 63,100
Drive-ins under construction
Property, Plant and Equipment [Line Items]
Drive-ins under construction | item	3

XML

Stockholders’ Equity (Tables)

12 Months Ended

Aug. 31, 2015

Stockholders’ Equity [Abstract]

Weighted Average Assumptions Used To Estimate The Fair Value Of Stock Option Grants

	2015		2014		2013
Expected term (years)	5.0		4.7		4.9
Expected volatility	34	%	37	%	48	%
Risk-free interest rate	1.3	%	1.5	%	0.8	%
Expected dividend yield	1.2	%	-	%	-	%

Summary Of Stock Option Activity

	Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (Yrs.)		Aggregate Intrinsic Value
Outstanding September 1, 2014	4,160	$	12.73
Granted	424		31.08
Exercised	(1,519)		14.56
Forfeited or expired	(192)		19.77
Outstanding at August 31, 2015	2,873	$	14.00	3.38	$	38,892
Exercisable at August 31, 2015	2,119	$	10.46	2.55	$	35,035

Summary Of Restricted Stock Units

	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding September 1, 2014	46	$	16.78
Granted	53		30.26
Vested	(33)		15.19
Forfeited	-
Outstanding at August 31, 2015	66	$	28.49

XML

Stockholders’ Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended						3 Months Ended					12 Months Ended
	Oct. 16, 2015	Jul. 31, 2015	Feb. 28, 2015	Jan. 31, 2015	Oct. 31, 2014	Mar. 31, 2014	Feb. 28, 2014	Aug. 31, 2015	May. 31, 2015	Feb. 28, 2015	Nov. 30, 2014	Aug. 31, 2012	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013	Jan. 31, 2014	Jan. 16, 2014	Jan. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation cost recognized													$ 3,520	$ 3,742	$ 3,630
Excess tax benefits													1,000	$ 1,700	$ 1,200
Unvested unrecognized compensation cost								$ 6,300					$ 6,300
Unvested unrecognized compensation cost, period													2 years 1 month 6 days
Weighted average fair value of stock options granted													$ 8.83	$ 6.82	$ 4.69
Proceeds from exercise of stock options													$ 18,732	$ 17,407	$ 16,343
Total intrinsic value of options exercised													21,800	13,000	3,800
Shares repurchase authorized amount								145,000				$ 40,000	145,000	105,000	40,000	$ 80,000		$ 55,000
Total cost for shares acquired through stock repurchase program												$ 1,100	$ 123,786	$ 80,045	35,480
Shares acquired through stock repurchase program												100
Weighted-average price per share													$ 29.46	$ 19.61
Remaining amount authorized for repurchase through stock repurchase program								$ 126,300					$ 126,300
Cash dividends declared per common share								$ 0.09	$ 0.09	$ 0.09	$ 0.09		$ 0.27	$ 0.09
Payment of dividends													$ 18,808
Dividends Payable								$ 13					13	$ 4,852
Accelerated Share Repurchase Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchase authorized amount							$ 40,000
Total cost for shares acquired through stock repurchase program							$ 40,000
Shares acquired through stock repurchase program						0	2,100
Final price paid per share						$ 19.13
Incremental authorization to share repurchase program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchase authorized amount																$ 40,000
Treasury Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total cost for shares acquired through stock repurchase program													$ 123,786	$ 80,045	$ 35,480
Shares acquired through stock repurchase program													4,201	4,080	3,332
October 2014 Accelerated Share Repurchase Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchase authorized amount					$ 15,000
Total cost for shares acquired through stock repurchase program					$ 15,000
Shares acquired through stock repurchase program				0	600
Cash payment at completion of accelerated share repurchase program				$ 100
Final price paid per share				$ 26.32
February 2015 Accelerated Share Repurchase Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchase authorized amount			$ 75,000							$ 75,000
Total cost for shares acquired through stock repurchase program			$ 75,000
Shares acquired through stock repurchase program		300	2,100
Final price paid per share		$ 31.38
Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash dividends declared per common share	$ 0.11
Dividends Payable, Date of Record	Nov. 11, 2015
Dividends Payable, Date to be Paid	Nov. 20, 2015
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period													3 years
Aggregate fair value of vested restricted stock													$ 1,100	$ 1,100	$ 900
2006 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares authorized																	6,600
Shares available for grant								7,600					7,600
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period													3 years
Board of Director Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period															1 year
Minimum [Member] | 2006 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term													7 years
Maximum [Member] | 2006 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term													10 years
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Discount price percentage													15.00%
Shares available for grant								800					800
Employee Stock [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation percentage								10.00%					10.00%
Stock’s fair market value								$ 25					$ 25

XML

Earnings Per Share (Tables)

12 Months Ended

Aug. 31, 2015

Earnings Per Share [Abstract]

Computation Of Basic And Diluted Earnings Per Share

	Fiscal year ended August 31,
	2015		2014		2013
Numerator:
Net income	$	64,485	$	47,916	$	36,701
Denominator:
Weighted average common shares outstanding– basic		52,572		55,164		56,384
Effect of dilutive employee stock options and
unvested restricted stock units		1,381		1,455		807
Weighted average common shares – diluted		53,953		56,619		57,191
Net income per common share – basic	$	1.23	$	0.87	$	0.65
Net income per common share – diluted	$	1.20	$	0.85	$	0.64
Anti-dilutive securities excluded(1)		342		988		3,278
—————————

(1) Anti-dilutive securities consist of stock options and unvested restricted stock units that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive

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Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Debt Instrument [Line Items]
Other	$ 40	$ 80
Total long-term debt	438,028	437,318
Less long-term debt due within one year	(9,790)	(9,791)
Long-term debt due after one year	428,238	427,527
2013 Fixed Rate Notes [Member]
Debt Instrument [Line Items]
Total long-term debt	155,000	155,000
2011 Fixed Rate Notes [Member]
Debt Instrument [Line Items]
Total long-term debt	272,488	$ 282,238
2011 Variable Rate Notes [Member]
Debt Instrument [Line Items]
Total long-term debt	$ 10,500

XML

Leases (Narrative) (Details)	12 Months Ended
	Aug. 31, 2015
Leases [Line Items]
Lease expiration date	Sep. 30, 2030
Lease renewal options, initial term period	5 years
Company Drive Ins [Member]
Leases [Line Items]
Lease expiration date	Aug. 31, 2030

XML

Impairment Of Long-Lived Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Impaired Long-Lived Assets Held and Used [Line Items]
Provisions for impairment of long-lived assets	$ 1,440	$ 114	$ 1,776
Change in vendor for the Sonic system's new point-of-sale technology [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
Provisions for impairment of long-lived assets			1,600
Surplus Property [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
Provisions for impairment of long-lived assets			$ 200

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2013	Aug. 31, 2014
Income Tax Contingency [Line Items]
State net operating loss carryforwards, valuation allowance	$ 12,000		$ 11,300
Unrecognized tax benefits	3,652	$ 2,583	2,461
Unrecognized tax benefits, accrued interest and penalty	400		400
Increase in unrecognized tax benefits	1,200
Unrecognized tax benefits, income tax penalties and interest net expense	100
Unrecognized tax benefits, income tax penalties and interest net benefit		$ 400
Possible change in unrecognized tax benefits, lower bound	100
Possible change in unrecognized tax benefits, upper bound	(3,000)
Income taxes receivable, current	$ 1,741		$ 1,887
Minimum [Member]
Income Tax Contingency [Line Items]
Operating Loss Carryforwards, Expiration Dates	Dec. 01, 2015
Maximum [Member]
Income Tax Contingency [Line Items]
Operating Loss Carryforwards, Expiration Dates	May 31, 2036

XML

Employee Benefit And Cash Incentive Plans (Details) - USD ($) $ in Millions	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Defined Contribution Plans [Line Items]
Employer contributions	$ 1.6	$ 1.3	$ 1.9
Incentive bonus expense	$ 12.4	$ 9.5	$ 8.2
Maximum [Member]
Defined Contribution Plans [Line Items]
Employer contributions, percentage	6.00%

XML

Property, Equipment And Capital Leases (Schedule Of Property, Equipment And Capital Leases) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 733,778	$ 720,776
Accumulated depreciation related to buildings and equipment	(330,219)	(298,580)
Property and equipment, net	403,559	422,196
Capital leases	48,079	50,243
Accumulated amortization	(30,232)	(30,470)
Capital leases, net	17,847	19,773
Property, equipment and capital leases, net	421,406	441,969
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	157,861	156,336
Buildings And Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	343,256	345,309
Drive-In Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	139,801	136,556
Brand Technology Development And Other Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 92,860	$ 82,575
Minimum [Member] | Buildings [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	8 years
Minimum [Member] | Drive-In Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Minimum [Member] | Brand Technology Development And Other Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	2 years
Maximum [Member] | Buildings [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	25 years
Maximum [Member] | Drive-In Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Maximum [Member] | Brand Technology Development And Other Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years

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Impairment Of Long-Lived Assets

12 Months Ended

Aug. 31, 2015

Impairment Of Long-Lived Assets [Abstract]

Impairment Of Long-Lived Assets

3.  Impairment of Long-Lived Assets

During the fiscal year ended August 31, 2015, the Company identified impairments for certain drive-in assets and surplus property through regular quarterly reviews of long-lived assets.  During the fiscal years ended August31,2014 and 2013, the Company identified impairments for certain brand technology assets and surplus property through regular quarterly reviews of long-lived assets.  The recoverability of Company Drive-Ins is assessed by estimating the undiscounted net cash flows expected to be generated over the remaining life of the Company Drive-Ins.  This involves estimating same-store sales and margins for the cash flow periods.  When impairment exists, the carrying value of the asset is written down to fair value.  

In fiscal years 2015, 2014 and 2013, the Company recorded $1.4 million, $0.1 million and $1.8 million, respectively, in provisions for impairment resulting from the assessment of certain drive-in assets and surplus properties.  These write-downs were completed to reduce the carrying amount of these properties to fair value.

The Company’s assessment in fiscal year 2013 resulted in provisions for impairment totaling $1.8 million.  Of this total, $1.6 million related to the write-off of assets associated with a change in the vendor providing technology for the Sonic system’s new point-of-sale technology.  The remaining $0.2 million reflects reducing the carrying amount of surplus properties to fair value.

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Commitments And Contingencies (Details) $ in Millions	12 Months Ended
	Aug. 31, 2015 USD ($)
Loss Contingencies [Line Items]
System-wide purchase obligations	$ 283.2
Note Repurchase Agreement [Member]
Loss Contingencies [Line Items]
Guarantor Obligations, Term	2018
Guaranteed obligations	$ 6.0
Guarantee Operating Lease Obligations [Member]
Loss Contingencies [Line Items]
Guarantor Obligations, Term	2029
Guaranteed obligations	$ 8.0
Guaranteed lease liability	$ 0.0

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Leases (Schedule Of Future Minimum Rental Payments Receivable) (Details) $ in Thousands	Aug. 31, 2015 USD ($)
Leases [Abstract]
Operating, 2016	$ 5,905
Operating, 2017	6,245
Operating, 2018	6,667
Operating, 2019	7,084
Operating, 2020	7,440
Operating, Thereafter	36,481
Operating, Total	$ 69,822

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Property, Equipment And Capital Leases (Tables)

12 Months Ended

Aug. 31, 2015

Property, Equipment And Capital Leases [Abstract]

Schedule Of Property, Equipment And Capital Leases

	Estimated
	Useful Life	2015		2014
Property, equipment and capital leases:
Land		$	157,861	$	156,336
Buildings and improvements	8 – 25 yrs		343,256		345,309
Drive-In equipment	5 – 7 yrs		139,801		136,556
Brand technology development and other equipment	2 – 5 yrs		92,860		82,575
Property and equipment, at cost			733,778		720,776
Accumulated depreciation			(330,219)		(298,580)
Property and equipment, net			403,559		422,196
Capital leases	Life of lease		48,079		50,243
Accumulated amortization			(30,232)		(30,470)
Capital leases, net			17,847		19,773
Property, equipment and capital leases, net		$	421,406	$	441,969

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Leases (Tables)

12 Months Ended

Aug. 31, 2015

Leases [Abstract]

Schedule Of Future Minimum Rental Payments Receivable

	Operating
Years ended August 31:
2016	$	5,905
2017		6,245
2018		6,667
2019		7,084
2020		7,440
Thereafter		36,481
	$	69,822

Schedule Of Future Minimum Rental Payments

	Operating		Capital
Years ended August 31:
2016	$	11,374	$	5,254
2017		10,992		5,004
2018		11,058		4,401
2019		10,767		3,517
2020		10,207		3,177
Thereafter		68,998		9,883
Total minimum lease payments(1)	$	123,396		31,236
Less amount representing interest averaging 6.3%				(6,796)
Present value of net minimum lease payments				24,440
Less amount due within one year				(3,677)
Amount due after one year			$	20,763
—————————

(1)  Minimum payments have not been reduced by future minimum rentals receivable under noncancelable operating and capital subleases of $9.5 million and $1.4 million, respectively.  They also do not include contingent rentals which may be due under certain leases.  Contingent rentals for capital leases amounted to $1.0 million in fiscal year 2015 and to $0.8 million in fiscal years 2014 and 2013.

Schedule Of Rent Expense For Operating Leases

	2015		2014		2013
Minimum rentals	$	12,659	$	12,449	$	13,154
Contingent rentals		174		161		93
Total rent expense		12,833		12,610		13,247
Less sublease rentals		(2,235)		(1,905)		(1,747)
Net rent expense	$	10,598	$	10,705	$	11,500

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Income Taxes (Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Income Taxes [Abstract]
Balance at beginning of year	$ 2,461	$ 2,583
Additions based on tax positions related to the current year	254	255
Additions for tax positions of prior years	937	115
Reductions for tax positions of prior years		(492)
Balance at end of year	$ 3,652	$ 2,461

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Leases (Schedule Of Future Minimum Rental Payments) (Details) - USD ($) $ in Thousands		Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Operating, 2016		$ 11,374
Operating, 2017		10,992
Operating, 2018		11,058
Operating, 2019		10,767
Operating, 2020		10,207
Operating, Thereafter		68,998
Operating, Total minimum lease payments	[1]	123,396
Capital, 2016		5,254
Capital, 2017		5,004
Capital, 2018		4,401
Capital, 2019		3,517
Capital, 2020		3,177
Capital, Thereafter		9,883
Capital, Total minimum lease payments	[1]	31,236
Less amount representing interest averaging 6.3%		(6,796)
Capital, Present value of net minimum lease payments		24,440
Less amount due within one year		(3,677)
Capital, Amount due after one year		20,763	$ 23,050
Minimum operating rentals receivable under noncancelable subleases		9,500
Minimum capital rentals receivable under noncancelable subleases		1,400
Capital Leases, Contingent Rental Payments		$ 1,000	$ 800	$ 800
Capital Lease Obligations [Member]
Average interest rate		6.30%

[1] Minimum payments have not been reduced by future minimum rentals receivable under noncancelable operating and capital subleases of $9.5 million and $1.4 million, respectively. They also do not include contingent rentals which may be due under certain leases. Contingent rentals for capital leases amounted to $1.0 million in fiscal year 2015 and to $0.8 million in fiscal years 2014 and 2013.

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Accrued Liabilities (Tables)

12 Months Ended

Aug. 31, 2015

Accrued Liabilities [Abstract]

Schedule Of Accrued Liabilities

	2015		2014
Wages and employee benefit costs	$	20,501	$	14,302
Property taxes, sales and use taxes and employment taxes		9,282		9,570
Unredeemed gift cards		9,285		8,577
Dividend payable		13		4,852
Other		11,633		6,380
	$	50,714	$	43,681

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Debt (Tables)

12 Months Ended

Aug. 31, 2015

Debt [Abstract]

Schedule Of Long-Term Debt

	2015		2014
Class A-2 2013-1 senior secured fixed rate notes	$	155,000	$	155,000
Class A-2 2011-1 senior secured fixed rate notes		272,488		282,238
Class A-1 2011-1 senior secured variable funding notes		10,500		-
Other		40		80
		438,028		437,318
Less long-term debt due within one year		(9,790)		(9,791)
Long-term debt due after one year	$	428,238	$	427,527

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Earnings Per Share

12 Months Ended

Aug. 31, 2015

Earnings Per Share [Abstract]

Earnings Per Share

2.  Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Fiscal year ended August 31,
	2015		2014		2013
Numerator:
Net income	$	64,485	$	47,916	$	36,701
Denominator:
Weighted average common shares outstanding– basic		52,572		55,164		56,384
Effect of dilutive employee stock options and
unvested restricted stock units		1,381		1,455		807
Weighted average common shares – diluted		53,953		56,619		57,191
Net income per common share – basic	$	1.23	$	0.87	$	0.65
Net income per common share – diluted	$	1.20	$	0.85	$	0.64
Anti-dilutive securities excluded(1)		342		988		3,278
—————————

(1) Anti-dilutive securities consist of stock options and unvested restricted stock units that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive.

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Income Taxes (Tables)

12 Months Ended

Aug. 31, 2015

Income Taxes [Abstract]

Components Of Provision For Income Taxes

	2015		2014		2013
Current:
Federal	$	14,597	$	16,580	$	16,741
State		3,576		3,490		2,688
		18,173		20,070		19,429
Deferred:
Federal		10,592		5,328		439
State		(1,528)		450		(270)
		9,064		5,778		169
Provision for income taxes	$	27,237	$	25,848	$	19,598

Provision For Income Taxes Computed By Applying The Statutory Federal Income Tax Rate

	2015		2014		2013
Amount computed by applying a tax rate of 35%	$	32,103	$	25,818	$	19,705
State income taxes (net of federal income tax benefit)		1,330		2,562		1,572
Employment related and other tax credits, net		(2,096)		(1,537)		(1,572)
Federal tax benefit of statutory tax deduction		(4,093)		-		-
Other		(7)		(995)		(107)
Provision for income taxes	$	27,237	$	25,848	$	19,598

Schedule Of Deferred Tax Assets And Liabilities

	2015		2014
Deferred tax assets:
Allowance for doubtful accounts and notes receivable	$	411	$	677
Leasing transactions		3,260		3,252
Deferred income		2,810		1,773
Accrued liabilities		5,630		3,399
Stock compensation		2,831		4,921
Other		541		688
State net operating losses		14,222		11,305
Total deferred tax assets		29,705		26,015
Valuation allowance		(12,041)		(11,305)
Total deferred tax assets after valuation allowance	$	17,664	$	14,710
Deferred tax liabilities:
Prepaid expenses	$	(1,315)	$	(1,498)
Investment in partnerships, including differences in capitalization,
depreciation and direct financing leases		(3,711)		(2,954)
Property, equipment and capital leases		(31,167)		(24,655)
Intangibles and other assets		(20,341)		(19,514)
Debt extinguishment		(2,515)		(3,353)
Total deferred tax liabilities		(59,049)		(51,974)
Net deferred tax liabilities	$	(41,385)	$	(37,264)
Net deferred tax assets and liabilities are classified as follows:
Current	$	2,164	$	347
Noncurrent		(43,549)		(37,611)
Total	$	(41,385)	$	(37,264)

Reconciliation Of Unrecognized Tax Benefits

	2015		2014
Balance at beginning of year	$	2,461	$	2,583
Additions based on tax positions related to the current year		254		255
Additions for tax positions of prior years		937		115
Reductions for tax positions of prior years		-		(492)
Balance at end of year	$	3,652	$	2,461

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Goodwill And Other Intangibles (Changes In The Carrying Amount Of Goodwill) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Goodwill And Other Intangibles [Abstract]
Balance at beginning of year	$ 77,093	$ 77,093
Goodwill acquired during the year	65
Goodwill disposed of related to the sale of Company Drive-Ins	(82)
Balance at end of year	$ 77,076	$ 77,093

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Income Taxes (Components Of Provision For Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Income Taxes [Abstract]
Federal, Current	$ 14,597	$ 16,580	$ 16,741
State, Current	3,576	3,490	2,688
Current	18,173	20,070	19,429
Federal, Deferred	10,592	5,328	439
State, Deferred	(1,528)	450	(270)
Deferred	9,064	5,778	169
Provision for income taxes	$ 27,237	$ 25,848	$ 19,598

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Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Current assets:
Cash and cash equivalents	$ 27,191	$ 35,694
Restricted cash	13,246	13,208
Accounts and notes receivable, net	31,577	32,833
Income taxes receivable	1,741	1,887
Inventories	3,824	3,349
Prepaid expenses	5,544	5,917
Other current assets	2,315	2,824
Total current assets	85,438	95,712
Noncurrent restricted cash	6,524	6,652
Notes receivable, net	7,216	8,155
Property, equipment and captial leases, net	421,406	441,969
Goodwill	77,076	77,093
Other assets, net	22,364	21,391
Total assets	620,024	650,972
Current liabilities:
Accounts payable	13,860	17,207
Franchisee deposits	870	2,678
Accrued liabilities	50,714	43,681
Income taxes payable	8,910	2,461
Current maturities of long-term debt and capital leases	13,467	13,484
Total current liabilities	87,821	79,511
Obligations under capital leases due after one year	20,763	23,050
Long-term debt due after one year	428,238	427,527
Deferred income taxes	43,549	37,611
Other non-current liabilities	$ 22,220	$ 20,598
Commitments and contingencies (Notes 7,8,14,15)
Stockholders' equity:
Preferred stock, par value $.01; 1,000 shares authorized; none outstanding
Common stock, par value $.01; 245,000 shares authorized; shares issued 118,309 in 2015 and in 2014	$ 1,183	$ 1,183
Paid-in capital	232,550	225,004
Retained earnings	851,715	801,202
Treasury stock, at cost; 67,249 shares in 2015 and 64,505 shares in 2014	(1,068,015)	(964,714)
Total stockholders’ equity	17,433	62,675
Total liabilities and stockholders' equity	$ 620,024	$ 650,972

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Leases (Schedule Of Rent Expense For Operating Leases) (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Leases [Abstract]
Minimum rentals	$ 12,659	$ 12,449	$ 13,154
Contingent rentals	174	161	93
Total rent expense	12,833	12,610	13,247
Operating leases, Sublease rentals	(2,235)	(1,905)	(1,747)
Net rent expense	$ 10,598	$ 10,705	$ 11,500

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Condensed Consolidated Statements Of Cash Flows $ in Thousands	12 Months Ended
	Aug. 31, 2015 USD ($)	Aug. 31, 2014 USD ($)	Aug. 31, 2013 USD ($)
Cash flows from operating activities
Net income	$ 64,485	$ 47,916	$ 36,701
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	45,892	42,210	40,387
Stock-based compensation expense	3,520	3,742	3,630
Net loss from early extinguishment of debt			4,443
Other	3,743	(1,628)	2,381
(Increase) decrease in operating assets:
Restricted cash	(61)	(1,428)	(2,431)
Accounts receivable and other assets	2,885	(5,977)	1,613
Increase (decrease) in operating liabilities:
Accounts payable	(1,288)	640	2,324
Accrued and other liabilities	10,296	7,347	5,129
Income taxes	6,890	10,726	(6,338)
Total adjustments	71,877	55,632	51,138
Net cash provided by operating activities	136,362	103,548	87,839
Cash flows from investing activities:
Purchases of property and equipment	(42,153)	(79,008)	(41,338)
Proceeds from sale of assets	13,701	2,148	33,475
Other	3,132	6,337	6,679
Net cash used in investing activities	(25,320)	(70,523)	(1,184)
Cash flows from financing activities:
Payments on debt	(90,290)	(9,976)	(189,499)
Proceeds from borrowings	91,000		155,000
Restricted cash for securitization obligations	151	181	1,921
Purchases of treasury stock	(120,463)	(79,786)	(36,582)
Proceeds from exercise of stock options	18,732	17,407	16,343
Payment of dividends	(18,808)
Debt issuance and extinguishment costs	(12)	(151)	(5,137)
Other	145	(2,902)	(3,452)
Net cash used in financing activities	(119,545)	(75,227)	(61,406)
Net increase (decrease) in cash and cash equivalents	(8,503)	(42,202)	25,249
Cash and cash equivalents at beginning of year	35,694	77,896	52,647
Cash and cash equivalents at end of year	27,191	35,694	77,896
Cash paid during the year for:
Interest	23,330	23,701	27,352
Income taxes (net of refunds)	11,360	14,143	25,440
Non-cash investing and financing activities:
Change in obligation to acquire treasury stock	3,323	259	(1,102)
Notes receivable and direct financing leases from property dispositions			8,661
Stock options exercised by stock swap	3,385	4,634
Change in obligation for purchase of property and equipment	(2,121)	3,097	$ (477)
Dividend payable	$ 13	$ 4,852

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Stockholders’ Equity (Summary Of Stock Option Activity) (Details) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Aug. 31, 2015 USD ($) $ / shares shares
Stockholders’ Equity [Abstract]
Options, Outstanding at September 1, 2014	4,160
Options, Granted	424
Options, Exercised	(1,519)
Options, Forfeited or expired	(192)
Options, Outstanding at August 31, 2015	2,873
Options, Exercisable at August 31, 2015	2,119
Weighted Average Exercise Price, Outstanding at September 1, 2014 | $ / shares	$ 12.73
Weighted Average Exercise Price, Granted | $ / shares	31.08
Weighted Average Exercise Price, Exercised | $ / shares	14.56
Weighted Average Exercise Price, Forfeited or expired | $ / shares	19.77
Weighted Averae Exercise Price, Outstanding at August 31, 2015 | $ / shares	14.00
Weighted Average Exercise Price, Exercisable at August 31, 2015 | $ / shares	$ 10.46
Weighted Average Remaining Contractual Life, Outstanding at August 31, 2015	3 years 4 months 17 days
Weighted Average Remaining Contractual Life, Exercisable at August 31, 2015	2 years 6 months 18 days
Aggregate Intrinsic Value, Outstanding at August 31, 2015 | $	$ 38,892
Aggregate Intrinsic Value, Exercisable at August 31, 2015 | $	$ 35,035

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Summary Of Significant Accounting Policies (Narrative) (Details) $ in Thousands	12 Months Ended
	Aug. 31, 2015 USD ($) segment	Aug. 31, 2014 USD ($)	Aug. 31, 2013 USD ($)
Summary Of Significant Accounting Policies [Abstract]
Number of Operating Segments | segment	1
Number of Reportable Segments | segment	1
Total restricted cash	$ 19,800
Restricted cash (current)	13,246	$ 13,208
Restricted cash (noncurrent)	6,524	6,652
Goodwill impairment	0	0
Advertising and promotion costs	$ 24,500	22,400	$ 22,400
Reimbursed administration costs, percent	15.00%
Reimbursed administration costs	$ 5,000	$ 4,400	$ 4,200

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Selected Quarterly Financial Data

12 Months Ended

Aug. 31, 2015

Selected Quarterly Financial Data [Abstract]

Selected Quarterly Financial Data

16.  Selected Quarterly Financial Data (Unaudited)

	First Quarter				Second Quarter				Third Quarter					Fourth Quarter
	2015		2014		2015		2014			2015		2014		2015		2014
Total revenues	$	139,856	$	126,652	$	126,219	$	109,741		$	164,748	$	152,187	$	175,266	$	163,769
Income from operations		22,538		18,359		16,991		12,349			36,370		31,681		40,529		36,288
Net income(1)	$	10,085	$	8,208	$	7,662	$	4,107		$	20,442	$	16,776	$	26,296	$	18,825
Basic income
per share(2)	$	0.19	$	0.15	$	0.14	$	0.07		$	0.39	$	0.31	$	0.51	$	0.35
Diluted income
per share(2)	$	0.18	$	0.14	$	0.14	$	0.07		$	0.38	$	0.30	$	0.50	$	0.34
—————————

(1)Includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter of fiscal year 2015; a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter of fiscal year 2015; and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter of fiscal year 2015. Also includes a $0.5 million tax benefit resulting from the IRS’s acceptance of a federal tax method change during the first quarter of fiscal year 2014.

(2)The sum of per share data may not agree to annual amounts due to rounding.

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Earnings Per Share (Computation Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended																12 Months Ended
		Aug. 31, 2015		May. 31, 2015		Feb. 28, 2015		Nov. 30, 2014		Aug. 31, 2014		May. 31, 2014		Feb. 28, 2014		Nov. 30, 2013		Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Earnings Per Share [Abstract]
Net income		$ 26,296	[1]	$ 20,442	[1]	$ 7,662	[1]	$ 10,085	[1]	$ 18,825	[1]	$ 16,776	[1]	$ 4,107	[1]	$ 8,208	[1]	$ 64,485	$ 47,916	$ 36,701
Weighted average common shares outstanding - basic																		52,572	55,164	56,384
Effect of dilutive employee stock options and unvested restricted stock units																		1,381	1,455	807
Weighted average common shares - diluted																		53,953	56,619	57,191
Net income per common share - basic		$ 0.51	[2]	$ 0.39	[2]	$ 0.14	[2]	$ 0.19	[2]	$ 0.35	[2]	$ 0.31	[2]	$ 0.07	[2]	$ 0.15	[2]	$ 1.23	$ 0.87	$ 0.65
Net income per common share - diluted		$ 0.50	[2]	$ 0.38	[2]	$ 0.14	[2]	$ 0.18	[2]	$ 0.34	[2]	$ 0.30	[2]	$ 0.07	[2]	$ 0.14	[2]	$ 1.20	$ 0.85	$ 0.64
Anti-dilutive securities excluded	[3]																	342	988	3,278

[1] Includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter of fiscal year 2015; a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter of fiscal year 2015; and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter of fiscal year 2015. Also includes a $0.5 million tax benefit resulting from the IRS's acceptance of a federal tax method change during the first quarter of fiscal year 2014.

[2] The sum of per share data may not agree to annual amounts due to rounding.

[3] Anti-dilutive securities consist of stock options and unvested restricted stock units that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive.

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Aug. 31, 2015

Summary Of Significant Accounting Policies [Abstract]

Operations

Operations

Sonic Corp. (the “Company”) operates and franchises a chain of quick-service restaurants in the United States.  It derives its revenues primarily from Company Drive-In sales and royalty fees from franchisees.  The Company also leases real estate and receives equity earnings in noncontrolling ownership in a number of Franchise Drive‑Ins.

Principles Of Consolidation

Principles of Consolidation

The accompanying financial statements include the accounts of the Company, its wholly owned subsidiaries and a number of Company Drive-Ins in which a subsidiary has a controlling ownership interest.  All intercompany accounts and transactions have been eliminated.

Use Of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) requires management to make estimates and assumptions that affect the amounts reported and contingent assets and liabilities disclosed in the financial statements and accompanying notes.  Actual results may differ from those estimates, and such differences may be material to the financial statements.

Segment Reporting

Segment Reporting

In accordance with Accounting Standards Update (“ASU”) 280, “Segment Reporting,” the Company uses the management approach for determining its reportable segments.  The management approach is based upon the way that management reviews performance and allocates resources.  The Company’s chief operating decision maker and his management team review operating results on a consolidated basis for purposes of allocating resources and evaluating the financial performance of the Sonic brand.  Accordingly, the Company has determined that it has one operating segment and, therefore, one reporting segment.

Cash Equivalents

Cash Equivalents

Cash equivalents consist of highly liquid investments, primarily money market accounts that mature in three months or less from date of purchase, and depository accounts.

Restricted Cash

Restricted Cash

As of August 31, 2015, the Company had restricted cash balances totaling $19.8 million for funds required to be held in trust for the benefit of senior noteholders under the Company’s debt arrangements.  The current portion of restricted cash of $13.3 million represents amounts to be returned to Sonic or paid to service current debt obligations.  The noncurrent portion of $6.5 million represents interest reserves required to be set aside for the duration of the debt.

Accounts And Notes Receivable

Accounts and Notes Receivable

The Company charges interest on past due accounts receivable and recognizes income as it is collected.  Interest accrues on notes receivable based on the contractual terms of the respective note.  The Company monitors all accounts and notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected.  The Company assesses credit risk for accounts and notes receivable of specific franchisees based on payment history, current payment patterns, the health of the franchisee’s business, and an assessment of the franchisee’s ability to pay outstanding balances.  In addition to allowances for bad debt for specific franchisee receivables, a general provision for bad debt is estimated for the Company’s accounts receivable based on historical trends.  Account balances generally are charged against the allowance when the Company believes that the collection is no longer reasonably assured.  The Company continually reviews its allowance for doubtful accounts.

Inventories

Inventories

Inventories consist principally of food and supplies that are carried at the lower of cost (first-in, first-out basis) or market.

Property, Equipment And Capital Leases

Property, Equipment and Capital Leases

Property and equipment are recorded at cost, and leased assets under capital leases are recorded at the present value of future minimum lease payments.  Depreciation of property and equipment and amortization of capital leases are computed by the straight-line method over the estimated useful lives or the lease term, including cancelable option periods when appropriate, and are combined for presentation in the financial statements.

Accounting For Long-Lived Assets

Accounting for Long-Lived Assets

The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable.  Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which generally represents the individual drive-in.  The Company’s primary test for an indicator of potential impairment is operating losses of the related drive-in.  If an indication of impairment is determined to be present, the Company estimates the future cash flows expected to be generated from the use of the asset and its eventual disposal.  If the sum of undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized.  The impairment loss is measured by comparing the fair value of the asset to its carrying amount.  Fair value is typically determined to be the value of the land since drive-in buildings and improvements are single-purpose assets and have little value to market participants.  The equipment associated with a store can be easily relocated to another store and therefore is not adjusted.

Surplus property assets are carried at the lower of depreciated cost or fair value less cost to sell.  The majority of the value in surplus property is land.  Fair values are estimated based upon management’s assessment as well as independent market value assessments of the assets’ estimated sales values. 

Goodwill And Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill is determined based on an acquisition purchase price in excess of the fair value of identified assets.  Intangible assets with lives restricted by contractual, legal or other means are amortized over their useful lives.  The Company tests goodwill at least annually for impairment using the fair value approach on a reporting unit basis. 

Since the Company is one reporting unit, potential goodwill impairment is evaluated by comparing the fair value of the Company to its carrying value.  The fair value of the Company is determined using a market approach.  If the carrying value of the Company exceeds fair value, a comparison of the fair value of goodwill against the carrying value of goodwill is made to determine whether goodwill has been impaired.  During the fourth quarters of fiscal years 2015 and 2014, the annual assessment of the recoverability of goodwill was performed and no impairment was indicated. 

The Company’s intangible assets subject to amortization consist primarily of acquired franchise agreements, intellectual property and other intangibles.  Amortization expense is calculated using the straight-line method over the asset’s expected useful life.  See note 5 - Goodwill and Other Intangibles for additional related disclosures.

Refranchising And Closure Of Company Drive-Ins

Refranchising and Closure of Company Drive-Ins

Gains and losses from the sale or closure of Company Drive-Ins are recorded as “Other operating (income) expense, net” on the Consolidated Statements of Income. 

Revenue Recognition, Franchise Fees And Royalties

Revenue Recognition, Franchise Fees and Royalties

Revenue from Company Drive-In sales is recognized when food and beverage products are sold.  Company Drive-In sales are presented net of sales tax and other sales-related taxes.

The Company’s gift card program serves all Sonic Drive-Ins and is administered by the Company on behalf of a system advertising fund.  The Company records a liability in the period in which a gift card is sold.  The gift cards do not have expiration dates.  As gift cards are redeemed, the liability is reduced with revenue recognized on redemptions at Company Drive-Ins.  Breakage is the amount on a gift card that is not expected to be redeemed and that the Company is not required to remit to a state under unclaimed property laws.  The Company estimates breakage based upon the historical trend in redemption patterns from previously sold gift cards.  The Company’s policy is to recognize the breakage, using the delayed recognition method, when it is apparent that there is a remote likelihood the gift card balance will be redeemed.  The Company reduces the gift card liability for the estimated breakage and uses that amount to defray the costs of operating the gift card program.  There is no income recognized on unredeemed gift card balances. Costs to administer the gift card program, net of breakage, are included in the receivables from advertising funds as set forth in note 4 – Accounts and Notes Receivable.  Such costs were not material in fiscal years 2015, 2014 and 2013.

Franchise fees are recognized in income when the Company has substantially performed or satisfied all material services or conditions relating to the sale of the franchise and the fees are nonrefundable.  Development fees are nonrefundable and are recognized in income on a pro-rata basis when the conditions for revenue recognition under the individual development agreements are met.  Both franchise fees and development fees are generally recognized upon the opening of a Franchise Drive-In or upon termination of the agreement between the Company and the franchisee.

The Company’s franchisees pay royalties based on a percentage of sales.  Royalties are recognized as revenue when they are earned.

Advertising Costs

Advertising Costs

Costs incurred in connection with advertising and promoting the Company’s products are included in other operating expenses and are expensed as incurred.  Such costs amounted to $24.5 million in fiscal year 2015 and to $22.4 million in each of fiscal years 2014 and 2013.

Under the Company’s franchise agreements, both Company Drive-Ins and Franchise Drive-Ins must contribute a minimum percentage of revenues to a national media production fund (“Sonic Brand Fund”) and spend an additional minimum percentage of gross revenues on advertising, either directly or through Company-required participation in advertising cooperatives.  A significant portion of the advertising cooperative contributions is remitted to the System Marketing Fund, which purchases advertising on national cable and broadcast networks and local broadcast networks and also funds other national media expenses and sponsorship opportunities.  As stated in the terms of existing franchise agreements, these funds do not constitute assets of the Company, and the Company acts with limited agency in the administration of these funds.  Accordingly, neither the revenuesand expenses nor the assets and liabilities of the advertising cooperatives, the Sonic Brand Fund or the System Marketing Fund are included in the Company’s consolidated financial statements.  However, all advertising contributions by Company Drive-Ins are recorded as expense on the Company’s financial statements.

Under the Company’s franchise agreements, the Company is reimbursed by the Sonic Brand Fund for costs incurred to administer the fund at an amount not to exceed 15% of the Sonic Brand Fund’s gross receipts.  Reimbursements from the Sonic Brand Fund are offset against selling, general and administrative expenses and totaled $5.0 million, $4.4 million and $4.2 million in fiscal years 2015, 2014 and 2013, respectively.

Operating Leases

Operating Leases

Rent expense is recognized on a straight-line basis over the expected lease term, including cancelable option periods when it is deemed to be reasonably assured that the Company would incur an economic penalty for not exercising the options.  Within the terms of some of the leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods.  The effects of the holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term, which includes cancelable option periods when appropriate.  The lease term commences on the date when the Company has the right to control the use of the leased property, which can occur before rent payments are due under the terms of the lease.  Contingent rent is generally based on sales levels and is accrued at the point in time it is probable that such sales levels will be achieved.

Stock-Based Compensation

Stock-Based Compensation

The Company grants incentive stock options (“ISOs”), non-qualified stock options (“NQs”) and restricted stock units (“RSUs”).  For grants of NQs and RSUs, the Company expects to recognize a tax benefit upon exercise of the option or vesting of the RSU.  As a result, a tax benefit is recognized on the related stock-based compensation expense for these types of awards.  For grants of ISOs, a tax benefit only results if the option holder has a disqualifying disposition.  As a result of the limitation on the tax benefit for ISOs, the tax benefit for stock-based compensation will generally be less than the Company’s overall tax rate and will vary depending on the timing of employees’ exercises and sales of stock. 

Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the requisite service period of the award, generally the vesting period of the grant.  For additional information on stock-based compensation see note 13 - Stockholders’ Equity.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date.

Income tax benefits credited to equity relate to tax benefits associated with amounts that are deductible for income tax purposes but do not affect earnings.  These benefits are principally generated from employee exercises of NQs, the vesting of RSUs, and disqualifying dispositions of ISOs.

The threshold for recognizing the financial statement effects of a tax position is when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority.  Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority.  Interest and penalties related to unrecognized tax benefits are included in income tax expense.

Additional information regarding the Company’s unrecognized tax benefits is provided in note 12 - Income Taxes.

Fair Value Measurements

Fair Value Measurements

The Company’s financial assets and liabilities consist of cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt.  The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates their carrying amounts due to the short-term nature of these assets and liabilities. 

The following methods and assumptions were used by the Company in estimating fair values of its financial instruments:

· Notes receivable - As of August 31, 2015 and 2014, the carrying amounts of notes receivable (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts.

· Long-term debt - The Company prepares a discounted cash flow analysis for its fixed rate borrowings to estimate fair value each quarter.  This analysis uses Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes.  The fair value estimate required significant assumptions by management.  Management believes this fair value is a reasonable estimate.  For more information regarding the Company’s long-term debt, see note 10 - Debt and note 11 - Fair Value of Financial Instruments.

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis, which means these assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests.  For the Company, these items primarily include long-lived assets, goodwill and other intangible assets.  Refer to sections “Accounting for Long-Lived Assets”and “Goodwill and Other Intangible Assets,” discussed above, for inputs and valuation techniques used to measure the fair value of these nonfinancial assets.  The fair value was based upon management’s assessment as well as independent market value assessments which involved Level 2 and Level 3 inputs.

New Accounting Pronouncements

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which requires entities to recognize revenue in the way it expects to be entitled for the transfer of promised goods or services to customers.  The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective.  This pronouncement is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  The update permits the use of either the retrospective or cumulative effect transition method, with early application not permitted.  The Company is currently evaluating the effect that this pronouncement will have on its financial statements and related disclosures.

In April 2015, FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.”  This update requires debt issuance costs to be presented in the balance sheet as a reduction of the related liability rather than an asset.  This pronouncement is effective for reporting periods beginning after December 15, 2015, including interim periods within that reporting period, and is to be applied retrospectively; early adoption is permitted.  The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

In April 2015, FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.”  The guidance provides clarification on whether a cloud computing arrangement includes a software license.  If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract.  The update is effective for reporting periods beginning after December 15, 2015.  The Company is currently evaluating the effect that this pronouncement will have on its financial statements and related disclosures.

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Summary Of Significant Accounting Policies

12 Months Ended

Aug. 31, 2015

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1.Summary of Significant Accounting Policies

Operations

Sonic Corp. (the “Company”) operates and franchises a chain of quick-service restaurants in the United States.  It derives its revenues primarily from Company Drive-In sales and royalty fees from franchisees.  The Company also leases real estate and receives equity earnings in noncontrolling ownership in a number of Franchise Drive‑Ins.

Principles of Consolidation

The accompanying financial statements include the accounts of the Company, its wholly owned subsidiaries and a number of Company Drive-Ins in which a subsidiary has a controlling ownership interest.  All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) requires management to make estimates and assumptions that affect the amounts reported and contingent assets and liabilities disclosed in the financial statements and accompanying notes.  Actual results may differ from those estimates, and such differences may be material to the financial statements.

Segment Reporting

In accordance with Accounting Standards Update (“ASU”) 280, “Segment Reporting,” the Company uses the management approach for determining its reportable segments.  The management approach is based upon the way that management reviews performance and allocates resources.  The Company’s chief operating decision maker and his management team review operating results on a consolidated basis for purposes of allocating resources and evaluating the financial performance of the Sonic brand.  Accordingly, the Company has determined that it has one operating segment and, therefore, one reporting segment.

Cash Equivalents

Cash equivalents consist of highly liquid investments, primarily money market accounts that mature in three months or less from date of purchase, and depository accounts.

Restricted Cash

As of August 31, 2015, the Company had restricted cash balances totaling $19.8 million for funds required to be held in trust for the benefit of senior noteholders under the Company’s debt arrangements.  The current portion of restricted cash of $13.3 million represents amounts to be returned to Sonic or paid to service current debt obligations.  The noncurrent portion of $6.5 million represents interest reserves required to be set aside for the duration of the debt.

Accounts and Notes Receivable

The Company charges interest on past due accounts receivable and recognizes income as it is collected.  Interest accrues on notes receivable based on the contractual terms of the respective note.  The Company monitors all accounts and notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected.  The Company assesses credit risk for accounts and notes receivable of specific franchisees based on payment history, current payment patterns, the health of the franchisee’s business, and an assessment of the franchisee’s ability to pay outstanding balances.  In addition to allowances for bad debt for specific franchisee receivables, a general provision for bad debt is estimated for the Company’s accounts receivable based on historical trends.  Account balances generally are charged against the allowance when the Company believes that the collection is no longer reasonably assured.  The Company continually reviews its allowance for doubtful accounts.

Inventories

Inventories consist principally of food and supplies that are carried at the lower of cost (first-in, first-out basis) or market.

Property, Equipment and Capital Leases

Property and equipment are recorded at cost, and leased assets under capital leases are recorded at the present value of future minimum lease payments.  Depreciation of property and equipment and amortization of capital leases are computed by the straight-line method over the estimated useful lives or the lease term, including cancelable option periods when appropriate, and are combined for presentation in the financial statements.

Accounting for Long-Lived Assets

The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable.  Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which generally represents the individual drive-in.  The Company’s primary test for an indicator of potential impairment is operating losses of the related drive-in.  If an indication of impairment is determined to be present, the Company estimates the future cash flows expected to be generated from the use of the asset and its eventual disposal.  If the sum of undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized.  The impairment loss is measured by comparing the fair value of the asset to its carrying amount.  Fair value is typically determined to be the value of the land since drive-in buildings and improvements are single-purpose assets and have little value to market participants.  The equipment associated with a store can be easily relocated to another store and therefore is not adjusted.

Surplus property assets are carried at the lower of depreciated cost or fair value less cost to sell.  The majority of the value in surplus property is land.  Fair values are estimated based upon management’s assessment as well as independent market value assessments of the assets’ estimated sales values. 

Goodwill and Other Intangible Assets

Goodwill is determined based on an acquisition purchase price in excess of the fair value of identified assets.  Intangible assets with lives restricted by contractual, legal or other means are amortized over their useful lives.  The Company tests goodwill at least annually for impairment using the fair value approach on a reporting unit basis. 

Since the Company is one reporting unit, potential goodwill impairment is evaluated by comparing the fair value of the Company to its carrying value.  The fair value of the Company is determined using a market approach.  If the carrying value of the Company exceeds fair value, a comparison of the fair value of goodwill against the carrying value of goodwill is made to determine whether goodwill has been impaired.  During the fourth quarters of fiscal years 2015 and 2014, the annual assessment of the recoverability of goodwill was performed and no impairment was indicated. 

The Company’s intangible assets subject to amortization consist primarily of acquired franchise agreements, intellectual property and other intangibles.  Amortization expense is calculated using the straight-line method over the asset’s expected useful life.  See note 5 - Goodwill and Other Intangibles for additional related disclosures.

Refranchising and Closure of Company Drive-Ins

Gains and losses from the sale or closure of Company Drive-Ins are recorded as “Other operating (income) expense, net” on the Consolidated Statements of Income. 

Revenue Recognition, Franchise Fees and Royalties

Revenue from Company Drive-In sales is recognized when food and beverage products are sold.  Company Drive-In sales are presented net of sales tax and other sales-related taxes.

The Company’s gift card program serves all Sonic Drive-Ins and is administered by the Company on behalf of a system advertising fund.  The Company records a liability in the period in which a gift card is sold.  The gift cards do not have expiration dates.  As gift cards are redeemed, the liability is reduced with revenue recognized on redemptions at Company Drive-Ins.  Breakage is the amount on a gift card that is not expected to be redeemed and that the Company is not required to remit to a state under unclaimed property laws.  The Company estimates breakage based upon the historical trend in redemption patterns from previously sold gift cards.  The Company’s policy is to recognize the breakage, using the delayed recognition method, when it is apparent that there is a remote likelihood the gift card balance will be redeemed.  The Company reduces the gift card liability for the estimated breakage and uses that amount to defray the costs of operating the gift card program.  There is no income recognized on unredeemed gift card balances. Costs to administer the gift card program, net of breakage, are included in the receivables from advertising funds as set forth in note 4 – Accounts and Notes Receivable.  Such costs were not material in fiscal years 2015, 2014 and 2013.

Franchise fees are recognized in income when the Company has substantially performed or satisfied all material services or conditions relating to the sale of the franchise and the fees are nonrefundable.  Development fees are nonrefundable and are recognized in income on a pro-rata basis when the conditions for revenue recognition under the individual development agreements are met.  Both franchise fees and development fees are generally recognized upon the opening of a Franchise Drive-In or upon termination of the agreement between the Company and the franchisee.

The Company’s franchisees pay royalties based on a percentage of sales.  Royalties are recognized as revenue when they are earned.

Advertising Costs

Costs incurred in connection with advertising and promoting the Company’s products are included in other operating expenses and are expensed as incurred.  Such costs amounted to $24.5 million in fiscal year 2015 and to $22.4 million in each of fiscal years 2014 and 2013.

Under the Company’s franchise agreements, both Company Drive-Ins and Franchise Drive-Ins must contribute a minimum percentage of revenues to a national media production fund (“Sonic Brand Fund”) and spend an additional minimum percentage of gross revenues on advertising, either directly or through Company-required participation in advertising cooperatives.  A significant portion of the advertising cooperative contributions is remitted to the System Marketing Fund, which purchases advertising on national cable and broadcast networks and local broadcast networks and also funds other national media expenses and sponsorship opportunities.  As stated in the terms of existing franchise agreements, these funds do not constitute assets of the Company, and the Company acts with limited agency in the administration of these funds.  Accordingly, neither the revenuesand expenses nor the assets and liabilities of the advertising cooperatives, the Sonic Brand Fund or the System Marketing Fund are included in the Company’s consolidated financial statements.  However, all advertising contributions by Company Drive-Ins are recorded as expense on the Company’s financial statements.

Under the Company’s franchise agreements, the Company is reimbursed by the Sonic Brand Fund for costs incurred to administer the fund at an amount not to exceed 15% of the Sonic Brand Fund’s gross receipts.  Reimbursements from the Sonic Brand Fund are offset against selling, general and administrative expenses and totaled $5.0 million, $4.4 million and $4.2 million in fiscal years 2015, 2014 and 2013, respectively.

Operating Leases

Rent expense is recognized on a straight-line basis over the expected lease term, including cancelable option periods when it is deemed to be reasonably assured that the Company would incur an economic penalty for not exercising the options.  Within the terms of some of the leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods.  The effects of the holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term, which includes cancelable option periods when appropriate.  The lease term commences on the date when the Company has the right to control the use of the leased property, which can occur before rent payments are due under the terms of the lease.  Contingent rent is generally based on sales levels and is accrued at the point in time it is probable that such sales levels will be achieved.

Stock-Based Compensation

The Company grants incentive stock options (“ISOs”), non-qualified stock options (“NQs”) and restricted stock units (“RSUs”).  For grants of NQs and RSUs, the Company expects to recognize a tax benefit upon exercise of the option or vesting of the RSU.  As a result, a tax benefit is recognized on the related stock-based compensation expense for these types of awards.  For grants of ISOs, a tax benefit only results if the option holder has a disqualifying disposition.  As a result of the limitation on the tax benefit for ISOs, the tax benefit for stock-based compensation will generally be less than the Company’s overall tax rate and will vary depending on the timing of employees’ exercises and sales of stock. 

Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the requisite service period of the award, generally the vesting period of the grant.  For additional information on stock-based compensation see note 13 - Stockholders’ Equity.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date.

Income tax benefits credited to equity relate to tax benefits associated with amounts that are deductible for income tax purposes but do not affect earnings.  These benefits are principally generated from employee exercises of NQs, the vesting of RSUs, and disqualifying dispositions of ISOs.

The threshold for recognizing the financial statement effects of a tax position is when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority.  Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority.  Interest and penalties related to unrecognized tax benefits are included in income tax expense.

Additional information regarding the Company’s unrecognized tax benefits is provided in note 12 - Income Taxes.

Fair Value Measurements

The Company’s financial assets and liabilities consist of cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt.  The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates their carrying amounts due to the short-term nature of these assets and liabilities. 

The following methods and assumptions were used by the Company in estimating fair values of its financial instruments:

· Notes receivable - As of August 31, 2015 and 2014, the carrying amounts of notes receivable (both current and non-current) approximate fair value due to the effect of the related allowance for doubtful accounts.

· Long-term debt - The Company prepares a discounted cash flow analysis for its fixed rate borrowings to estimate fair value each quarter.  This analysis uses Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes.  The fair value estimate required significant assumptions by management.  Management believes this fair value is a reasonable estimate.  For more information regarding the Company’s long-term debt, see note 10 - Debt and note 11 - Fair Value of Financial Instruments.

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis, which means these assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests.  For the Company, these items primarily include long-lived assets, goodwill and other intangible assets.  Refer to sections “Accounting for Long-Lived Assets”and “Goodwill and Other Intangible Assets,” discussed above, for inputs and valuation techniques used to measure the fair value of these nonfinancial assets.  The fair value was based upon management’s assessment as well as independent market value assessments which involved Level 2 and Level 3 inputs.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which requires entities to recognize revenue in the way it expects to be entitled for the transfer of promised goods or services to customers.  The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective.  This pronouncement is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  The update permits the use of either the retrospective or cumulative effect transition method, with early application not permitted.  The Company is currently evaluating the effect that this pronouncement will have on its financial statements and related disclosures.

In April 2015, FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.”  This update requires debt issuance costs to be presented in the balance sheet as a reduction of the related liability rather than an asset.  This pronouncement is effective for reporting periods beginning after December 15, 2015, including interim periods within that reporting period, and is to be applied retrospectively; early adoption is permitted.  The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

In April 2015, FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.”  The guidance provides clarification on whether a cloud computing arrangement includes a software license.  If a software license is included, the customer should account for the license consistent with its accounting of other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract.  The update is effective for reporting periods beginning after December 15, 2015.  The Company is currently evaluating the effect that this pronouncement will have on its financial statements and related disclosures.

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Aug. 31, 2015	Aug. 31, 2014
Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	245,000,000	245,000,000
Common stock, shares issued	118,309,000	118,309,000
Treasury stock, shares	67,249,000	64,505,000

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Fair Value Of Financial Instruments

12 Months Ended

Aug. 31, 2015

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

11.  Fair Value of Financial Instruments

The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The Company has no financial liabilities that are required to be measured at fair value on a recurring basis.

The Company categorizes its assets and liabilities recorded at fair value based upon the following fair value hierarchy established by FASB:

· Level 1 valuations use quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.  An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

· Level 2 valuations use inputs other than actively quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.  Level 2 inputs include: (a) quoted prices for similar assets or liabilities in active markets, (b) quoted prices for identical or similar assets or liabilities in markets that are not active, (c) inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves observable at commonly quoted intervals and (d) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

· Level 3 valuations use unobservable inputs for the asset or liability.  Unobservable inputs are used to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The Company’s cash equivalents are carried at cost which approximates fair value and totaled $41.1 million and $34.4 million at August 31, 2015 and 2014, respectively.  This fair value is estimated using Level 1 methods.

At August 31, 2015, the fair value of the Company’s 2011 Fixed Rate Notes and 2013 Fixed Rate Notes approximated the carrying value of $428.1 million, including accrued interest.  The fair value of the Company’s 2011 Variable Funding Notes at August 31, 2015 approximated the carrying value of $10.5 million, including accrued interest.  The fair value of the 2011 Fixed Rate Notes, 2013 Fixed Rate Notes and the 2011 Variable Funding Notes is estimated using Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes.

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Document And Entity Information - USD ($)	12 Months Ended
	Aug. 31, 2015	Oct. 15, 2015	Feb. 28, 2015
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Aug. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Entity Registrant Name	SONIC CORP.
Entity Central Index Key	0000868611
Current Fiscal Year End Date	--08-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		49,779,353
Entity Well-known Seasoned Issuer	Yes
Entity Public Float			$ 1,576,346,093
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No

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Income Taxes

12 Months Ended

Aug. 31, 2015

Income Taxes [Abstract]

Income Taxes

12.  Income Taxes

The Company’s income before the provision for income taxes is classified by source as domestic income.

The components of the provision for income taxes consist of the following for the years ended August 31:

	2015		2014		2013
Current:
Federal	$	14,597	$	16,580	$	16,741
State		3,576		3,490		2,688
		18,173		20,070		19,429
Deferred:
Federal		10,592		5,328		439
State		(1,528)		450		(270)
		9,064		5,778		169
Provision for income taxes	$	27,237	$	25,848	$	19,598

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate due to the following for the fiscal years ended August 31:

	2015		2014		2013
Amount computed by applying a tax rate of 35%	$	32,103	$	25,818	$	19,705
State income taxes (net of federal income tax benefit)		1,330		2,562		1,572
Employment related and other tax credits, net		(2,096)		(1,537)		(1,572)
Federal tax benefit of statutory tax deduction		(4,093)		-		-
Other		(7)		(995)		(107)
Provision for income taxes	$	27,237	$	25,848	$	19,598

Deferred tax assets and liabilities consist of the following at August 31:

	2015		2014
Deferred tax assets:
Allowance for doubtful accounts and notes receivable	$	411	$	677
Leasing transactions		3,260		3,252
Deferred income		2,810		1,773
Accrued liabilities		5,630		3,399
Stock compensation		2,831		4,921
Other		541		688
State net operating losses		14,222		11,305
Total deferred tax assets		29,705		26,015
Valuation allowance		(12,041)		(11,305)
Total deferred tax assets after valuation allowance	$	17,664	$	14,710
Deferred tax liabilities:
Prepaid expenses	$	(1,315)	$	(1,498)
Investment in partnerships, including differences in capitalization,
depreciation and direct financing leases		(3,711)		(2,954)
Property, equipment and capital leases		(31,167)		(24,655)
Intangibles and other assets		(20,341)		(19,514)
Debt extinguishment		(2,515)		(3,353)
Total deferred tax liabilities		(59,049)		(51,974)
Net deferred tax liabilities	$	(41,385)	$	(37,264)
Net deferred tax assets and liabilities are classified as follows:
Current	$	2,164	$	347
Noncurrent		(43,549)		(37,611)
Total	$	(41,385)	$	(37,264)

State net operating loss carryforwards expire beginning in December 2015 through May 2036.  Management does not believe the Company will be able to realize the state net operating loss carryforwards utilizing future income exclusive of the reversal of existing deferred tax liabilities and therefore has provided a valuation allowance of $12.0 million and $11.3 million as of August 31, 2015 and 2014, respectively.

As of August 31, 2015 and 2014, the Company had approximately $3.7 million and $2.5 million of unrecognized tax benefits, including approximately $0.4 million and $0.4 million of accrued interest and penalty, respectively.  If recognized, these benefits would favorably impact the effective tax rate.  The liability for unrecognized tax benefits increased $1.2 million in fiscal year 2015.  The increase was primarily related to recognition of an uncertain position related to current and prior years’ federal tax deductions.  This entire change in balance impacted the Company’s tax rate.

The Company recognizes estimated interest and penalties as a component of its income tax expense, net of federal benefit, as a component of “Provision for income taxes” in the Consolidated Statements of Income.  During the year ended August 31, 2015,the Company recognized net expenses of $0.1 million.  The Company recognized negligible net expenses in fiscal year 2014 and a net benefit of $0.4 million in fiscal year 2013.

A reconciliation of unrecognized tax benefits is as follows for fiscal years ended August 31:

	2015		2014
Balance at beginning of year	$	2,461	$	2,583
Additions based on tax positions related to the current year		254		255
Additions for tax positions of prior years		937		115
Reductions for tax positions of prior years		-		(492)
Balance at end of year	$	3,652	$	2,461

The Company or one of its subsidiaries is subject to U.S. federal income tax and income tax in multiple U.S. state jurisdictions.  At August 31, 2015, the Company was subject to income tax examinations for its U.S. federal income taxes and for state and local income taxes generally after fiscal year 2009.  The Company anticipates that the results of any examinations or appeals, combined with the expiration of applicable statutes of limitations and the additional accrual of interest related to unrecognized benefits on various return positions taken in years still open for examination, could result in a change to the liability for unrecognized tax benefits during the next 12 months ranging from an increase of $0.1 million to a decrease of $3.0 million depending on the timing and terms of the examination resolutions. 

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Consolidated Statements Of Income - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Revenues:
Company Drive-In sales	$ 436,031	$ 405,363	$ 402,296
Franchise Drive-Ins:
Franchise royalties and fees	161,342	138,416	130,737
Lease revenue	5,583	4,291	4,785
Other	3,133	4,279	4,767
Total revenues	606,089	552,349	542,585
Costs and expenses:
Food and packaging	121,701	116,325	114,545
Payroll and other employee benefits	151,801	139,939	142,511
Other operating expenses, exclusive of depreciation and amortization included below	90,436	85,845	86,153
Total cost of Company Drive-In sales	363,938	342,109	343,209
Selling, general and administrative	79,336	69,415	66,022
Depreciation and amortization	45,892	42,210	40,387
Provision for impairment of long-lived assets	1,440	114	1,776
Other operating (income) expense, net	(945)	(176)	1,943
Total costs and expenses	489,661	453,672	453,337
Income from operations	116,428	98,677	89,248
Interest expense	25,114	25,382	29,098
Interest income	(408)	(469)	(592)
Net loss from early extinguishment of debt			4,443
Net interest expense	24,706	24,913	32,949
Income before income taxes	91,722	73,764	56,299
Provision for income taxes	27,237	25,848	19,598
Net income	$ 64,485	$ 47,916	$ 36,701
Basic income per share	$ 1.23	$ 0.87	$ 0.65
Diluted income per share	1.20	0.85	$ 0.64
Cash dividends declared per common share	$ 0.27	$ 0.09

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Other Operating Income And Expenses

12 Months Ended

Aug. 31, 2015

Other Operating Income And Expenses [Abstract]

Other Operating Income And Expenses

6.  Other Operating Income and Expenses

During fiscal year 2013, the Company completed an assessment in advance of capital expenditures for planned technology initiatives and closed 12 lower-performing Company Drive-Ins as of August31,2013, resulting in a loss of $2.4 million.  The loss included rent accruals for the remaining lease term, write-down of real estate and other costs associated with store closures.  Additionally, in the second quarter of fiscal year 2013, a franchisee purchased land and buildings leased or subleased from the Company relating to previously refranchised drive-ins.  At the time of the sale, these assets had a carrying value of $38.4million.  The Company received $29.7million in cash at closing and received the remaining $8.7million through the combination of a note receivable and a direct financing lease, all of which were repaid as of August31,2014.  In conjunction with the sale and the assignment of third-party leases, the Company removed its escalating lease liability related to the sold properties, which resulted in a small gain and partially offset the drive-in closure loss described above. 

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Goodwill And Other Intangibles

12 Months Ended

Aug. 31, 2015

Goodwill And Other Intangibles [Abstract]

Goodwill And Other Intangibles

5.  Goodwill andOther Intangibles

As of August 31, 2015, the Company had $77.1 million of goodwill.

The changes in the carrying amount of goodwill were as follows:

	August 31,
	2015		2014
Balance at beginning of year	$	77,093	$	77,093
Goodwill acquired during the year		65		-
Goodwill disposed of related to the sale of Company Drive-Ins		(82)		-
Balance at end of year	$	77,076	$	77,093

The gross carrying amount of franchise agreements, intellectual property, franchise fees and other intangibles subject to amortization was $10.4 million and $10.3 million at August 31, 2015 and 2014, respectively, and is included in other assets in the accompanying consolidated balance sheets.  Accumulated amortization related to these intangible assets was $5.9 million and $5.0 million at August 31, 2015 and 2014, respectively.  Intangible assets amortization expense was $0.9 million for each of the fiscal years ended August 31, 2015, 2014 and 2013.  At August 31, 2015, the remaining weighted-average life of amortizable intangible assets was approximately 10 years.  Estimated intangible assets amortization expense is $0.9 million annually for fiscal years 2016 and 2017 and $0.3 million for fiscal years 2018, 2019 and 2020.

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Valuation And Qualifying Accounts

12 Months Ended

Aug. 31, 2015

Valuation And Qualifying Accounts [Abstract]

Valuation And Qualifying Accounts

Sonic Corp.
Schedule II – Valuation and Qualifying Accounts
			Additions		Amounts
	Balance at		Charged to		Written Off
	Beginning of		Costs and		Against the		(Transfers)		Balance at
Description	Year		Expenses		Allowance		Recoveries		End of Year
		(In thousands)
Allowance for doubtful accounts and notes receivable
Fiscal years ended:
August 31, 2015	$	1,771		(81)		(601)		16	$	1,105
August 31, 2014		2,347		(434)		(142)		-		1,771
August 31, 2013	$	2,992		(367)		(278)		-	$	2,347
Accrued liability for drive-in closings and disposals
Fiscal years ended:
August 31, 2015	$	871		367		(422)		(9)	$	807
August 31, 2014		1,099		339		(546)		(21)		871
August 31, 2013	$	568		809		(249)		(29)	$	1,099

See accompanying Report of Independent Registered Pubic Accounting Firm.

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Stockholders’ Equity

12 Months Ended

Aug. 31, 2015

Stockholders’ Equity [Abstract]

Stockholders’ Equity

13.  Stockholders’ Equity

Employee Stock Purchase Plan

The Company has an employee stock purchase plan (“ESPP”) that permits eligible employees to purchase the Company’s common stock at a 15% discount from the stock’s fair market value.  Participating employees may purchase shares of common stock each year up to the lesser of 10% of their base compensation or $25 thousand in the stock’s fair market value.  At August 31, 2015,  0.8 million shares were available for grant under the ESPP.

Stock-Based Compensation

The Sonic Corp. 2006 Long-Term Incentive Plan (the “2006 Plan”) provides flexibility to award various forms of equity compensation, such as stock options, stock appreciation rights, performance shares, restricted stock units (“RSUs”) and other share-based awards.  At Sonic’s annual meeting of stockholders on January 16, 2014, the stockholders approved an amendment to the 2006 Plan which added an additional 6.6 million shares of common stock available for issuance.  At August 31, 2015,  7.6 million shares were available for grant under the 2006 Plan.  The Company grants stock options with contractual terms of seven to 10 years and a vesting period of three years and RSUs also with a vesting period of three years.  Effective in January 2013, awards granted to the Company’s Board of Directors vest over one year.  The Company’s policy is to issue shares from treasury stock to satisfy stock option exercises, the vesting of RSUs and shares issued under the ESPP.

Total stock-based compensation cost recognized for fiscal years 2015,  2014 and 2013 was $3.5 million, $3.7 million and $3.6 million, respectively, net of related income tax benefits of $1.0 million, $1.7 million and $1.2 million, respectively.  At August 31, 2015, total remaining unrecognized compensation cost related to unvested stock-based arrangements was $6.3 million and is expected to be recognized over a weighted average period of 2.1 years.

The Company measures the compensation cost associated with stock option-based payments by estimating the fair value of stock options as of the grant date using the Black-Scholes option pricing model.  The Company believes the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options granted during 2015,  2014 and 2013.  Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive equity awards.  The fair value of RSUs granted is equal to the Company’s closing stock price on the date of the grant.

The per share weighted average fair value of stock options granted during 2015,  2014 and 2013 was $8.83,  $6.82 and $4.69, respectively.  In addition to the exercise and grant date prices of the awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants in the respective periods are listed in the table below:

	2015		2014		2013
Expected term (years)	5.0		4.7		4.9
Expected volatility	34	%	37	%	48	%
Risk-free interest rate	1.3	%	1.5	%	0.8	%
Expected dividend yield	1.2	%	-	%	-	%

The Company estimates expected volatility based on historical daily price changes of the Company’s common stock for a period equal to the current expected term of the options.  The risk-free interest rate is based on the United States treasury yields in effect at the time of grant corresponding with the expected term of the options.  The expected option term is the number of years the Company estimates that options will be outstanding prior to exercise considering vesting schedules and historical exercise patterns. 

Stock Options

A summary of stock option activity under the Company’s stock-based compensation plans for the year ended August 31, 2015, is presented in the following table:

	Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (Yrs.)		Aggregate Intrinsic Value
Outstanding September 1, 2014	4,160	$	12.73
Granted	424		31.08
Exercised	(1,519)		14.56
Forfeited or expired	(192)		19.77
Outstanding at August 31, 2015	2,873	$	14.00	3.38	$	38,892
Exercisable at August 31, 2015	2,119	$	10.46	2.55	$	35,035

Proceeds from the exercise of stock options for fiscal years 2015,  2014 and 2013 were $18.7million, $17.4million and $16.3million, respectively.  The total intrinsic value of options exercised during the years ended August31,2015,  2014 and 2013 was $21.8 million, $13.0million and $3.8million, respectively.

Restricted Stock Units

A summary of the Company’s RSU activity during the year ended August 31, 2015 is presented in the following table:

	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding September 1, 2014	46	$	16.78
Granted	53		30.26
Vested	(33)		15.19
Forfeited	-
Outstanding at August 31, 2015	66	$	28.49

The aggregate fair value of RSUs that vested was $1.1 million during the years ended August31,2015 and 2014 and was $0.9 million for the year ended August31,2013.

Share Repurchase Programs

In August 2012, the Company’s Board of Directors approved a share repurchase program authorizing the Company to purchase up to $40 million of its outstanding shares of common stock.  In January 2013, the Board of Directors increased the repurchase program to $55 million in authorized purchases through August 31, 2013.  During fiscal year 2013, approximately 3.3 million shares were acquired pursuant to this program for a total cost of $35.5 million; this is in addition to the approximately 0.1million shares that were acquired for a total cost of $1.1 million during the fourth quarter of fiscal year 2012. 

In August 2013, the Board of Directors extended the share repurchase program through August 31, 2014, with a total authorization of up to $40 million of its outstanding shares of common stock.  In January 2014, the Company’s Board of Directors approved an incremental $40 million authorization for the program that allowed for up to $80million of common stock to be repurchased through August 31, 2014.  As part of this program, in February2014, the Company entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to purchase $40million of the Company’s common stock.  In exchange for a $40 million up-front payment, the financial institution delivered approximately 2.1 million shares.  During March2014, the ASR purchase period concluded with no additional shares delivered, resulting in an average price per share of $19.13.  The Company completed this share repurchase program during fiscal year2014, with approximately 4.1 million shares repurchased, resulting in an average price per share of $19.61. 

In August 2014, the Board of Directors further extended the Company’s share repurchase program, authorizing the Company to purchase up to $105 million of its outstanding shares of common stock beginning September 1, 2014 through August 31, 2015.  In October 2014, the Company entered into an ASR agreement with a financial institution to purchase $15 million of the Company’s common stock.  In exchange for a $15 million up-front payment, the financial institution delivered approximately 0.6 million shares.  During January2015, the ASR purchase period concluded.  The Company paid an additional $0.1 million with no additional shares delivered, resulting in an average price per share of $26.32.  In February 2015, the Company entered into additional ASR agreements with a financial institution to purchase $75 million of the Company’s common stock.  In exchange for a $75 million up-front payment, the financial institution delivered approximately 2.1 million shares.  The ASR transactions completed in July 2015 with 0.3 million additional shares delivered, resulting in an average price per share of $31.38.  The Company reflected the ASR transactions as a repurchase of common stock for purposes of calculating earnings per share and as a forward contract indexed to its own common stock.  The forward contract met all of the applicable criteria for equity classification.

In August 2015, the Board of Directors further extended the Company’s share repurchase program, authorizing the Company to purchase up to $145 million of its outstanding shares of common stock through August 31, 2016. 

Including shares repurchased through the ASR transactions described above, during the fiscal year 2015, approximately 4.2 million shares were repurchased for a total cost of $123.8 million, resulting in an average price per share of $29.46.  The total remaining amount authorized under the share repurchase program, as of August 31, 2015, was $126.3 million.

Share repurchases will be made from time to time in the open market or otherwise, including through an accelerated share repurchase program, under the terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions. The share repurchase program may be extended, modified, suspended or discontinued at any time.  We plan to fund the share repurchase program from existing cash on hand at August 31, 2015, cash flows from operations and borrowings under our 2011 Variable Funding Notes.

Dividends

In August 2014, the Company initiated a quarterly cash dividend program and paid a quarterly dividend of $0.09 per share of common stock, totaling $18.8million for the fiscal year.  Subsequent to the end of the fiscal year, the Company declared a quarterly dividend of $0.11 per share of common stock to be paid to stockholders of record as of the close of business on November 11, 2015, with a payment date of November 20, 2015.  The Company did not pay any cash dividends on its common stock prior to fiscal 2015.  The future declaration of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of the Company’s Board of Directors.

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Accrued Liabilities

12 Months Ended

Aug. 31, 2015

Accrued Liabilities [Abstract]

Accrued Liabilities

9.  Accrued Liabilities

Accrued liabilities consist of the following at August 31:

	2015		2014
Wages and employee benefit costs	$	20,501	$	14,302
Property taxes, sales and use taxes and employment taxes		9,282		9,570
Unredeemed gift cards		9,285		8,577
Dividend payable		13		4,852
Other		11,633		6,380
	$	50,714	$	43,681

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Stockholders’ Equity (Summary Of Restricted Stock Units) (Details) shares in Thousands	12 Months Ended
	Aug. 31, 2015 $ / shares shares
Stockholders’ Equity [Abstract]
Restricted Stock Units, Outstanding at September 1, 2014	46
Restricted Stock Units, Granted	53
Restricted Stock Units, Vested	(33)
Restricted Stock Units, Outstanding at August 31, 2015	66
Weighted Average Grant Date Fair Value, Outstanding at September 1, 2014 | $ / shares	$ 16.78
Weighted Average Grant Date Fair Value, Granted | $ / shares	30.26
Weighted Average Grant Date Fair Value, Vested | $ / shares	15.19
Weighted Average Grant Date Fair Value, Outstanding at August 31, 2015 | $ / shares	$ 28.49

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Leases

12 Months Ended

Aug. 31, 2015

Leases [Abstract]

Leases

7.  Leases

Leasing Arrangements as a Lessor

The Company’s leasing activities consist principally of leasing certain land and buildings as well as subleasing certain buildings to franchise operators.  The land and building portions of all leases are classified as operating leases with lease terms expiring through September 2030.  These leases include provisions for contingent rentals that may be received on the basis of a percentage of sales in excess of stipulated amounts.  Income is not recognized on contingent rentals until sales exceed the stipulated amounts.  Some leases contain escalation clauses over the lives of the leases.  For property owned by third parties, the lease term runs concurrently with the term of the third-party lease arrangement.  Most of the leases contain renewal options at the end of the initial term for periods of five years. 

Future minimum rental payments receivable as of August 31, 2015, are as follows:

	Operating
Years ended August 31:
2016	$	5,905
2017		6,245
2018		6,667
2019		7,084
2020		7,440
Thereafter		36,481
	$	69,822

Leasing Arrangements as a Lessee

Certain Company Drive-Ins lease land and buildings from third parties.  These leases, with lease terms expiring through August 2030, include provisions for contingent rents that may be paid on the basis of a percentage of sales in excess of stipulated amounts.  For the majority of leases, the land portions are classified as operating leases, and the building portions are classified as capital leases.

Future minimum rental payments required under operating leases and maturities under capital leases that have initial or remaining noncancelable lease terms in excess of one year as of August 31, 2015, are as follows:

	Operating		Capital
Years ended August 31:
2016	$	11,374	$	5,254
2017		10,992		5,004
2018		11,058		4,401
2019		10,767		3,517
2020		10,207		3,177
Thereafter		68,998		9,883
Total minimum lease payments(1)	$	123,396		31,236
Less amount representing interest averaging 6.3%				(6,796)
Present value of net minimum lease payments				24,440
Less amount due within one year				(3,677)
Amount due after one year			$	20,763
—————————

(1)  Minimum payments have not been reduced by future minimum rentals receivable under noncancelable operating and capital subleases of $9.5 million and $1.4 million, respectively.  They also do not include contingent rentals which may be due under certain leases.  Contingent rentals for capital leases amounted to $1.0 million in fiscal year 2015 and to $0.8 million in fiscal years 2014 and 2013.

Total rent expense for all operating leases consists of the following for the years ended August 31:

	2015		2014		2013
Minimum rentals	$	12,659	$	12,449	$	13,154
Contingent rentals		174		161		93
Total rent expense		12,833		12,610		13,247
Less sublease rentals		(2,235)		(1,905)		(1,747)
Net rent expense	$	10,598	$	10,705	$	11,500

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Property, Equipment And Capital Leases

12 Months Ended

Aug. 31, 2015

Property, Equipment And Capital Leases [Abstract]

Property, Equipment And Capital Leases

8.  Property, Equipment and Capital Leases

Property, equipment and capital leases consist of the following at August 31:

	Estimated
	Useful Life	2015		2014
Property, equipment and capital leases:
Land		$	157,861	$	156,336
Buildings and improvements	8 – 25 yrs		343,256		345,309
Drive-In equipment	5 – 7 yrs		139,801		136,556
Brand technology development and other equipment	2 – 5 yrs		92,860		82,575
Property and equipment, at cost			733,778		720,776
Accumulated depreciation			(330,219)		(298,580)
Property and equipment, net			403,559		422,196
Capital leases	Life of lease		48,079		50,243
Accumulated amortization			(30,232)		(30,470)
Capital leases, net			17,847		19,773
Property, equipment and capital leases, net		$	421,406	$	441,969

Depreciation expense for property and equipment was $41.7million, $37.6 million and $35.6 million for fiscal years 2015,  2014 and 2013, respectively.  Land, buildings and equipment with a carrying amount of $165.8 million at August 31, 2015, were leased under operating leases to franchisees and other parties.  The accumulated depreciation related to these buildings and equipment was $63.1 million at August 31, 2015.  Amortization expense related to capital leases is included within “Depreciation and amortization” on the Consolidated Statements of Income.  As of August 31, 2015, the Company had three drive-ins under construction with costs to complete.

Interest incurred in connection with the construction of new drive-ins and technology projects is capitalized.  Capitalized interest was $0.4 million, $0.5 million and $0.7 million for fiscal years 2015, 2014 and 2013, respectively.

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Debt

12 Months Ended

Aug. 31, 2015

Debt [Abstract]

Debt

10.  Debt

Long-term debt consists of the following at August 31:

	2015		2014
Class A-2 2013-1 senior secured fixed rate notes	$	155,000	$	155,000
Class A-2 2011-1 senior secured fixed rate notes		272,488		282,238
Class A-1 2011-1 senior secured variable funding notes		10,500		-
Other		40		80
		438,028		437,318
Less long-term debt due within one year		(9,790)		(9,791)
Long-term debt due after one year	$	428,238	$	427,527

At August 31, 2015, future maturities of long-term debt were $9.8 million for fiscal year 2016, $9.7 million for fiscal year 2017, $263.5 million for fiscal year 2018, no maturities for fiscal year 2019 and $155.0 million for fiscal year 2020.

On May 20, 2011, in a private transaction, various subsidiaries of the Company (the “Co-Issuers”) issued $500 million of Series 2011-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2011 Fixed Rate Notes”), which bear interest at 5.4% per annum.  The 2011 Fixed Rate Notes have an expected life of seven years with an anticipated repayment date in May 2018.  The Co-Issuers also entered into a securitized financing facility of Series 2011-1 Senior Secured Variable Funding Notes, Class A-1 (the “2011 Variable Funding Notes” and, together with the 2011 Fixed Rate Notes, the “2011 Notes”).  This revolving credit facility allows for the issuance of up to $100 million of 2011 Variable Funding Notes and certain other credit instruments, including letters of credit.  Interest on the 2011 Variable Funding Notes is based on the one-month London Interbank Offered Rate (“LIBOR”) or Commercial Paper (“CP”), depending on the funding source, plus the base spread mentioned below, per annum.  There is a 0.5% annual commitment fee payable monthly on the unused portion of the 2011 Variable Funding Notes facility. 

In the second quarter of fiscal year 2013, the Co-Issuers made a debt prepayment, at par, of $20.0 million on the 2011 Fixed Rate Notes.  In the fourth quarter of fiscal year 2013, in a private transaction the Co-Issuers refinanced and paid $155 million of the 2011 Fixed Rate Notes with the issuance of $155 million of Series 2013-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2013 Fixed Rate Notes”), which bear interest at 3.75% per annum.  The 2013 Fixed Rate Notes have an expected life of seven years, interest payable monthly, no scheduled principal amortization and an anticipated repayment date in July 2020.  Additionally, the Co-Issuers extended the 2011 Variable Funding Notes’ renewal date by two years to May 2018 and decreased the base spread from 3.75% to 3.50% in the fourth quarter of fiscal year 2013. 

As of August 31, 2015, the weighted-average interest cost of the 2011 Fixed Rate Notes, 2011 Variable Funding Notes and 2013 Fixed Rate Notes was 5.9%,  4.1% and 4.1%, respectively.  The weighted-average interest cost includes the effect of the loan origination costs.

In fiscal year 2013, the debt prepayment and the partial debt refinancing resulted in a pro-rata write-off of loan origination costs from the 2011 Fixed Rate Notes, representing a majority of the $4.4 million loss which is reflected in “Net loss from early extinguishment of debt” on the Consolidated Statements of Income.  An additional $4.1 million in debt origination costs was capitalized in conjunction with the 2013 Fixed Rate Notes.  Loan costs are being amortized over each note’s expected life. 

While the 2011 Notes and the 2013 Fixed Rate Notes are structured to provide for seven-year lives from their original issuance dates, they have legal final maturity dates of May 2041 and July 2043, respectively.  The Company intends to repay or refinance the 2011 Notes and the 2013 Fixed Rate Notes on or before the end of their expected lives.  If the Company prepays the debt prior to the anticipated repayment date the Company may be required to pay a prepayment penalty under certain circumstances.  In the event the 2011 Notes and the 2013 Fixed Rate Notes are not paid in full by the end of their expected lives, they are subject to an upward adjustment in the interest rate of at least 5% per annum.  In addition, principal payments will accelerate by applying all of the royalties, lease revenues and other fees securing the debt, after deducting certain expenses, until the debt is paid in full.  Also, any unfunded amount under the 2011 Variable Funding Notes will become unavailable.

The Co-Issuers and Sonic Franchising LLC (the “Guarantor”) are existing special purpose, bankruptcy remote, indirect subsidiaries of Sonic Corp. that holdsubstantially all of Sonic's franchising assets and real estate.  As of August 31, 2015, assets for these combined indirect subsidiaries totaled $318.2 million, including receivables for royalties, certain Company and Franchise Drive-In real estate, intangible assets and restricted cash balances of $19.8 million.  The 2011 Notes and the 2013 Fixed Rate Notes are secured by franchise fees, royalty payments and lease payments, and the repayment of the 2011 Notes and the 2013 Fixed Rate Notes is expected to be made solely from the income derived from the Co-Issuer's assets.  In addition, the Guarantor, a Sonic Corp. subsidiary that acts as a franchisor, has guaranteed the obligations of the Co-Issuers under the 2011 Notes and the 2013 Fixed Rate Notes and pledged substantially all of its assets to secure those obligations.

Neither Sonic Corp., the ultimate parent of the Co-Issuers and the Guarantor, nor any other subsidiary of Sonic, guarantees or is in any way liable for the obligations of the Co-Issuers under the 2011 Notes and the 2013 Fixed Rate Notes.  The Company has, however, agreed to cause the performance of certain obligations of its subsidiaries, principally related to managing the assets included as collateral for the 2011 Notes and the 2013 Fixed Rate Notes and certain indemnity obligations relating to the transfer of the collateral assets to the Co-Issuers.

The 2011 Notes and the 2013 Fixed Rate Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) required actions to better secure collateral upon the occurrence of certain performance-related events, (ii) application of certain disposition proceeds as note prepayments after a set time is allowed for reinvestment, (iii) maintenance of specified reserve accounts, (iv) maintenance of certain debt service coverage ratios, (v) optional and mandatory prepayments upon change in control, (vi) indemnification payments for defective or ineffective collateral, and (vii) covenants relating to recordkeeping, access to information and similar matters.  If certain covenants or restrictions are not met, the 2011 Notes and the 2013 Fixed Rate Notes are subject to customary accelerated repayment events and events of default.  Although management does not anticipate an event of default or any other event of noncompliance with the provisions of the debt, if such event occurred, the unpaid amounts outstanding could become immediately due and payable.

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Valuation And Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Allowance For Doubtful Accounts And Notes Receivable [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Year	$ 1,771	$ 2,347	$ 2,992
Additions Charged to Costs and Expenses	(81)	(434)	(367)
Amounts Written Off Against the Allowance	(601)	(142)	(278)
(Transfer) Recoveries	16
Balance at End of Year	1,105	1,771	2,347
Accrued Carrying Costs For Drive-In Closings And Disposals [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Year	871	1,099	568
Additions Charged to Costs and Expenses	367	339	809
Amounts Written Off Against the Allowance	(422)	(546)	(249)
(Transfer) Recoveries	(9)	(21)	(29)
Balance at End of Year	$ 807	$ 871	$ 1,099

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Selected Quarterly Financial Data (Schedule Of Selected Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended																12 Months Ended
	Aug. 31, 2015		May. 31, 2015		Feb. 28, 2015		Nov. 30, 2014		Aug. 31, 2014		May. 31, 2014		Feb. 28, 2014		Nov. 30, 2013		Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Selected Quarterly Financial Data [Line Items]
Total revenues	$ 175,266		$ 164,748		$ 126,219		$ 139,856		$ 163,769		$ 152,187		$ 109,741		$ 126,652		$ 606,089	$ 552,349	$ 542,585
Income from operations	40,529		36,370		16,991		22,538		36,288		31,681		12,349		18,359		116,428	98,677	89,248
Net income	$ 26,296	[1]	$ 20,442	[1]	$ 7,662	[1]	$ 10,085	[1]	$ 18,825	[1]	$ 16,776	[1]	$ 4,107	[1]	$ 8,208	[1]	$ 64,485	$ 47,916	$ 36,701
Basic income per share	$ 0.51	[2]	$ 0.39	[2]	$ 0.14	[2]	$ 0.19	[2]	$ 0.35	[2]	$ 0.31	[2]	$ 0.07	[2]	$ 0.15	[2]	$ 1.23	$ 0.87	$ 0.65
Diluted income per share	$ 0.50	[2]	$ 0.38	[2]	$ 0.14	[2]	$ 0.18	[2]	$ 0.34	[2]	$ 0.30	[2]	$ 0.07	[2]	$ 0.14	[2]	$ 1.20	$ 0.85	$ 0.64
Retroactive benefit of Work Opportunity Tax Credit and resolution of tax matters [member]
Selected Quarterly Financial Data [Line Items]
Tax expense (benefit)					$ (700)
Federal tax benefit of prior-year statutory tax deduction [Member]
Selected Quarterly Financial Data [Line Items]
Tax expense (benefit)	$ (1,500)		$ (1,700)
Retroactive effect of federal tax law change [Member]
Selected Quarterly Financial Data [Line Items]
Tax expense (benefit)			$ 600
Change in deferred tax valuation allowance [Member]
Selected Quarterly Financial Data [Line Items]
Tax expense (benefit)	$ (1,700)
IRS's acceptance of a federal tax method change [Member}
Selected Quarterly Financial Data [Line Items]
Tax expense (benefit)															$ (500)

[1] Includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter of fiscal year 2015; a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter of fiscal year 2015; and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter of fiscal year 2015. Also includes a $0.5 million tax benefit resulting from the IRS's acceptance of a federal tax method change during the first quarter of fiscal year 2014.

[2] The sum of per share data may not agree to annual amounts due to rounding.

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Selected Quarterly Financial Data (Tables)

12 Months Ended

Aug. 31, 2015

Selected Quarterly Financial Data [Abstract]

Schedule Of Selected Quarterly Financial Data

	First Quarter				Second Quarter				Third Quarter					Fourth Quarter
	2015		2014		2015		2014			2015		2014		2015		2014
Total revenues	$	139,856	$	126,652	$	126,219	$	109,741		$	164,748	$	152,187	$	175,266	$	163,769
Income from operations		22,538		18,359		16,991		12,349			36,370		31,681		40,529		36,288
Net income(1)	$	10,085	$	8,208	$	7,662	$	4,107		$	20,442	$	16,776	$	26,296	$	18,825
Basic income
per share(2)	$	0.19	$	0.15	$	0.14	$	0.07		$	0.39	$	0.31	$	0.51	$	0.35
Diluted income
per share(2)	$	0.18	$	0.14	$	0.14	$	0.07		$	0.38	$	0.30	$	0.50	$	0.34
—————————

(1)Includes a tax benefit of $0.7 million from the retroactive reinstatement of the Work Opportunity Tax Credit and resolution of income tax matters in the second quarter of fiscal year 2015; a federal tax benefit of $1.7 million from the recognition of a prior-year statutory tax deduction and a tax expense of $0.6 million from the retroactive effect of federal tax law change during the third quarter of fiscal year 2015; and a federal tax benefit of $1.5 million from the recognition of a prior-year statutory tax deduction and $1.7 million from a change in deferred tax valuation allowance during the fourth quarter of fiscal year 2015. Also includes a $0.5 million tax benefit resulting from the IRS’s acceptance of a federal tax method change during the first quarter of fiscal year 2014.

(2)The sum of per share data may not agree to annual amounts due to rounding.

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Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2015	Aug. 31, 2014
Cash equivalents carried at cost	$ 41.1	$ 34.4
2013 and 2011 Fixed Rate Notes [Member]
Long-term debt, fair value	428.1
Long-term debt, carrying value, including accrued interest	428.1
2011 Variable Rate Notes [Member]
Long-term debt, fair value	10.5
Long-term debt, carrying value, including accrued interest	$ 10.5

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Commitments And Contingencies

12 Months Ended

Aug. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

15.  Commitments and Contingencies

Litigation

The Company is involved in various legal proceedings and has certain unresolved claims pending.  Based on the information currently available, management believes that all claims currently pending are either covered by insurance or would not have a material adverse effect on the Company’s business, operating results or financial condition.

Note Repurchase Agreement

On December 20, 2013, the Company extended a note purchase agreement to a bank that serves to guarantee the repayment of a franchisee loan, with a term through 2018, and also benefits the franchisee with a lower financing rate.  In the event of default by the franchisee, the Company would purchase the franchisee loan from the bank, thereby becoming the note holder and providing an avenue of recourse with the franchisee.  The Company recorded a liability for this guarantee which was based on the Company’s estimate of fair value.  As of August 31, 2015, the balance of the franchisee’s loan was $6.0 million.

Lease Commitments

The Company has obligations under various operating lease agreements with third-party lessors related to the real estate for certain Company Drive-In operations that were sold to franchisees.  Under these agreements, which expire through 2029, the Company remains secondarily liable for the lease payments for which it was responsible as the original lessee.  As of August 31, 2015, the amount remaining under these guaranteed lease obligations totaled $8.0 million.  At this time, the Company does not anticipate any material defaults under the foregoing leases; therefore, no liability has been provided. 

Purchase Obligations

At August 31, 2015, the Company had purchase obligations of approximately $283.2 million which primarily related to its estimated share of system-wide commitments for food products.  The Company has excluded agreements that are cancelable without penalty.

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Accounts And Notes Receivable (Tables)

12 Months Ended

Aug. 31, 2015

Accounts And Notes Receivable [Abstract]

Schedule Of Accounts And Notes Receivable

	August 31,		August 31,
	2015		2014
Current Accounts and Notes Receivable:
Royalties and other trade receivables	$	19,713	$	18,292
Notes receivable from franchisees		996		1,468
Receivables from advertising funds		4,965		5,597
Other		6,977		9,068
Accounts and notes receivable, gross		32,651		34,425
Allowance for doubtful accounts and notes receivable		(1,074)		(1,592)
Accounts and notes receivable, net	$	31,577	$	32,833
Noncurrent Notes Receivable:
Receivables from franchisees	$	5,676	$	4,688
Receivables from advertising funds		1,571		3,646
Allowance for doubtful notes receivable		(31)		(179)
Notes receivable, net	$	7,216	$	8,155

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Debt (Narrative) (Details) - USD ($)	3 Months Ended		12 Months Ended
	Aug. 31, 2013	Feb. 28, 2013	Aug. 31, 2015	Aug. 31, 2013	Aug. 31, 2014	May. 31, 2013	May. 20, 2011
Debt Instrument [Line Items]
Future maturities of long-term debt, 2016			$ 9,800,000
Future maturities of long-term debt, 2017			9,700,000
Future maturities of long-term debt, 2018			263,500,000
Future maturities of long-term debt, 2019			0
Future maturities of long-term debt, 2020			155,000,000
Long-term Debt			438,028,000		$ 437,318,000
Proceeds from borrowings			91,000,000	$ 155,000,000
Total assets			620,024,000		$ 650,972,000
Restricted cash			19,800,000
Gain (loss) from early extinguishment of debt				(4,443,000)
Co-Issuers And Guarantor [Member]
Debt Instrument [Line Items]
Total assets			318,200,000
Restricted cash			$ 19,800,000
2013 Fixed Rate Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 155,000,000			155,000,000
Senior secured notes interest rate, percentage			3.75%
Debt instrument, maturity year			Jul. 20, 2020
Weighted-average interest cost, percentage			4.10%
Expected life of debt instrument			7 years
Debt instrument, legal final maturity year			Jul. 20, 2043
Payment of loan costs				$ 4,100,000
2011 Fixed Rate Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount							$ 500,000,000
Debt prepayment	$ 155,000,000	$ 20,000,000
Senior secured notes interest rate, percentage			5.40%
Debt instrument, maturity year			May 21, 2018
Weighted-average interest cost, percentage			5.90%
Expected life of debt instrument			7 years
2011 Variable Rate Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount							$ 100,000,000
Debt instrument, maturity year			May 21, 2018
Weighted-average interest cost, percentage			4.10%
Interest rate percentage			3.50%			3.75%
Annual commitment fee payable, percentage			0.50%
2011 Notes [Member]
Debt Instrument [Line Items]
Debt issuance date			May 20, 2011
Debt instrument, legal final maturity year			May 20, 2041
Interest Rate Upward Adjustment Due To Nonpayment [Member]
Debt Instrument [Line Items]
Senior secured notes interest rate, percentage			5.00%

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Other Operating Income And Expenses (Details) $ in Millions	1 Months Ended	12 Months Ended
	Dec. 31, 2012 USD ($)	Aug. 31, 2014 USD ($)	Aug. 31, 2013 USD ($) store
Property Subject to or Available for Operating Lease [Line Items]
Carrying value of assets at time of sale	$ 38.4
Proceeds from sale	$ 29.7	$ 8.7
2013 Company Drive-In Closures Member
Property Subject to or Available for Operating Lease [Line Items]
Loss on closure of Company Drive-Ins			$ 2.4
Number of Restaurants | store			12

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Consolidated Statements Of Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Paid-In Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Total
Stockholders' Equity, Beginning Balance at Aug. 31, 2012	$ 1,183	$ 230,543	$ 722,614	$ (895,093)	$ 59,247
Balance, shares at Aug. 31, 2012				60,325
Net income			36,701		36,701
Stock-based compensation expense		3,630			3,630
Purchase of treasury stock				$ (35,480)	(35,480)
Purchase of treasury stock, shares				3,332
Exercise of stock options and issuance of restricted stock		(6,127)	(1,057)	$ 23,527	16,343
Exercise of stock options and issuance of restricted stock, shares				(1,607)
Other		(3,278)	(120)	$ 421	(2,977)
Other, shares				(25)
Stockholders' Equity, Ending Balance at Aug. 31, 2013	1,183	224,768	758,138	$ (906,625)	77,464
Balance, shares at Aug. 31, 2013				62,025
Net income			47,916		47,916
Cash dividends			(4,852)		(4,852)
Stock-based compensation expense		3,742			3,742
Purchase of treasury stock				$ (80,045)	(80,045)
Purchase of treasury stock, shares				4,080
Exercise of stock options and issuance of restricted stock		(4,186)		$ 21,593	17,407
Exercise of stock options and issuance of restricted stock, shares				(1,575)
Other		680		$ 363	1,043
Other, shares				(25)
Stockholders' Equity, Ending Balance at Aug. 31, 2014	1,183	225,004	801,202	$ (964,714)	$ 62,675
Balance, shares at Aug. 31, 2014				64,505	64,505
Net income			64,485		$ 64,485
Cash dividends			(13,972)		(13,972)
Stock-based compensation expense		3,520			3,520
Purchase of treasury stock				$ (123,786)	(123,786)
Purchase of treasury stock, shares				4,201
Exercise of stock options and issuance of restricted stock		(1,458)		$ 20,190	18,732
Exercise of stock options and issuance of restricted stock, shares				(1,438)
Other		5,484		$ 295	5,779
Other, shares				(19)
Stockholders' Equity, Ending Balance at Aug. 31, 2015	$ 1,183	$ 232,550	$ 851,715	$ (1,068,015)	$ 17,433
Balance, shares at Aug. 31, 2015				67,249	67,249

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Accounts And Notes Receivable

12 Months Ended

Aug. 31, 2015

Accounts And Notes Receivable [Abstract]

Accounts And Notes Receivable

4.  Accounts and Notes Receivable

Accounts and notes receivable consist of the following:

	August 31,		August 31,
	2015		2014
Current Accounts and Notes Receivable:
Royalties and other trade receivables	$	19,713	$	18,292
Notes receivable from franchisees		996		1,468
Receivables from advertising funds		4,965		5,597
Other		6,977		9,068
Accounts and notes receivable, gross		32,651		34,425
Allowance for doubtful accounts and notes receivable		(1,074)		(1,592)
Accounts and notes receivable, net	$	31,577	$	32,833
Noncurrent Notes Receivable:
Receivables from franchisees	$	5,676	$	4,688
Receivables from advertising funds		1,571		3,646
Allowance for doubtful notes receivable		(31)		(179)
Notes receivable, net	$	7,216	$	8,155

The Company’s receivables are primarily due from franchisees, all of whom are in the restaurant business.  Substantially all of the notes receivable from franchisees are collateralized by real estate or equipment. 

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Stockholders’ Equity (Weighted Average Assumptions Used To Estimate The Fair Value Of Stock Option Grants) (Details)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Stockholders’ Equity [Abstract]
Expected term	5 years	4 years 8 months 12 days	4 years 10 months 24 days
Expected volatility	34.00%	37.00%	48.00%
Risk-free interest rate	1.30%	1.50%	0.80%
Expected dividend yield	1.20%	0.00%	0.00%

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Goodwill And Other Intangibles (Tables)

12 Months Ended

Aug. 31, 2015

Goodwill And Other Intangibles [Abstract]

Changes In The Carrying Amount Of Goodwill

	August 31,
	2015		2014
Balance at beginning of year	$	77,093	$	77,093
Goodwill acquired during the year		65		-
Goodwill disposed of related to the sale of Company Drive-Ins		(82)		-
Balance at end of year	$	77,076	$	77,093

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Accounts And Notes Receivable (Schedule Of Accounts And Notes Receivable) (Details) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Royalties and other trade receivables	$ 19,713	$ 18,292
Current accounts and notes receivable, gross	32,651	34,425
Allowance for doubtful accounts and notes receivable, current	(1,074)	(1,592)
Current Accounts and Notes Receivable, net	31,577	32,833
Receivables from franchisees	5,676	4,688
Receivables from advertising funds	1,571	3,646
Allowance for doubtful notes receivable	(31)	(179)
Notes receivable, net	7,216	8,155
Notes Receivable From Franchisees [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current accounts and notes receivable, gross	996	1,468
Receivable From Advertising Funds [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current accounts and notes receivable, gross	4,965	5,597
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current accounts and notes receivable, gross	$ 6,977	$ 9,068

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Employee Benefit And Cash Incentive Plans

12 Months Ended

Aug. 31, 2015

Employee Benefit And Cash Incentive Plans [Abstract]

Employee Benefit And Cash Incentive Plans

14.  Employee Benefit and Cash Incentive Plans

The Company sponsors a qualified defined contribution 401(k) plan for employees meeting certain eligibility requirements.  Under the plan, employees are entitled to make pre-tax contributions.  The Company matches an amount equal to the employee’s contributions up to a maximum of 6% of the employee’s salaries depending on years of service.  The Company’s contributions during fiscal years 2015,  2014 and 2013 were $1.6 million, $1.3 million and $1.9 million, respectively. 

The Company has short-term and long-term cash incentive plans (the “Incentive Plans”) that apply to certain employees, and grants of awards under the Incentive Plans are at all times subject to the approval of the Company’s Board of Directors.  Under certain awards pursuant to the Incentive Plans, if predetermined earnings goals are met, a predetermined percentage of the employee’s salary may be paid in the form of a bonus.  The Company recognized as expense incentive bonuses of $12.4 million, $9.5 million and $8.2 million during fiscal years 2015,  2014 and 2013, respectively.