Ruth’s Chris
Date Incorporation: 1985
Franchising Since: 1985
Headquarters: Florida
Description: Ruth’s Chris franchise system operates a chain of upscale steak house restaurants which offer a specialized menu featuring steak and other entrees, hot and cold side dishes and a full service bar, for on-premises consumption.
Franchise Offer: Two types of franchise:
i.)Single Franchise - the right to establish and operate one Ruth's Chris Steak House restaurant at a specified location
ii.)Development Agreement - the right to develop and open a specified number of restaurants in the development area.
Financial Assistance: The franchisor does not offer any direct or indirect financing.
Training and Assistance: The operating principal, the general manager, executive chef and at least two secondary managers must attend and complete the initial training program. The training will be located at a pre-approved certified learning center, and will consist of 76 hours of classroom training and 352 hours of ‘On-the-Job’ training.
Territory: The franchisee will receive an exclusive territory.
Term of Agreement and Renewal: Not available
Obligations and Restrictions: The operating principal must devote sufficient efforts to the supervision and conduct of the restaurant; meet the educational, experience, financial and other reasonable criteria; and either serve as the general manager or designate another individual to serve as the general manager of the restaurant.
Total Number of Units: 58 outlets at the end of 2007
Total Number of franchises Units: 115 franchised outlets at the end of 2007
Investment Tables:
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| Development Fee (non-refundable) | $50,000 per Restaurant | $50,000 per Restaurant |
| Franchise Fee (non-refundable) | $100,000 per Restaurant | $100,000 per Restaurant |
| Site Location Feasibility and Marketing Study | $5,000 | $10,000 |
| Real Estate and Improvements | $1,000,000 (depending on whether property is leased or purchased) | $3,500,000 |
| Equipment, Furniture and Fixtures | $550,000 | $750,000 |
| Signage | $25,000 | $45,000 |
| Pre-Opening Marketing and Public Relations | $22,500 | $22,500 |
| Pre-Opening & Training Inventory (Food & Beverages) | $90,000 | $200,000 |
| Initial Inventory (Food & Beverages) | $120,000 | $130,000 |
| Point of Sale Computer Hardware and Software and Office Material | $25,000 | $150,000 |
| Management Training Expenses | $57,000 | $120,000 |
| New Store Opening Assistance Training Expense | $100,000 | $150,000 |
| Alcoholic Beverages License and other Business Permits | $10,000 | $180,000 |
| Insurance deposits and Premiums (for first year) | $30,000 | $45,000 |
| Utility Deposits | $5,000 | $10,000 |
| Additional Funds (3 months) | $150,000 | $250,000 |
| TOTAL | $2,339,500 | $5,712,500 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Royalty Fee | 5% of Gross Sales |
| Grand Opening Marketing and Public Relations | $22,500 |
| National and Local Advertising | Contributions not to exceed 1% of Gross Sales for National Advertising. Franchisee is required to spend at least an additional 2% for Local Advertising on a self-administered basis. |
| Marketing Programs | Cost of the promotion |
| Site Selection | Reimbursement for all travel expenses, wages and consultant's fees incurred in performing more than one site visitation |
| Initial Pre-Opening On-Site Assistance and Additional Training | Reimbursement for all training-related expenses; per diem fee for providing either or both pre-opening on-site assistance during the initial 15 day minimum period and/or for on-site assistance provided during the franchise term |
| Taxes on Payments to Us | Amount of tax |
| Late Charges | Lesser of the maximum amount permitted by law or the prime commercial lending rate as quoted by the Wall Street Journal plus five percent( 5%) on the day the payment is due |
| Interest and Audit Fees | Lesser of 18% per year or the maximum rate permitted by applicable law; if an inspection reveals underpayment by 2% or more, reimbursement of all costs and expenses incurred in connection with the inspection to the franchisor |
| Transfer Fee | Greater of $ 10,000 or 20% of the then-current franchise fee |
| Renewal Fee | Greater of $10,000 or 20% of the then-current franchise fee |
| Liquidated Damages for Employee Piracy | For solicitation of any personnel, 250% of the covered individual's annual base compensation |
| Insurance Fee | Reasonable fee to compensate us for procuring insurance. |
| Product Inspection and Testing | Cost of inspection or testing. |
| Correction of Deficiencies | Reasonable fee to cover expenses incurred in connection with correcting deficiency |
| Software Support Fee | To be determined |
| Legal Fees and Indemnification | Varies according to cost or loss incurred. |
| Recruiting Fee | $5,000.00 +actual cost of testing |
Date of FDD: 19/08/2008
The above information has been taken from the UFOC/FDD of Ruth's Chris
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