Ruths Steakhouse
Ruth's Chris Steak House offers high-end steakhouse franchises with full bars, known for their prime cuts and upscale dining experience in the restaurant industry.
Ruths Steakhouse franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Ruth's Chris Restaurant franchise ranges from $2,477,000 to $6,380,000 [p.1]. This includes an additional $180,000 to $250,000 that must be paid to the franchisor or its affiliates [p.1].
What is the initial franchise fee?
The initial franchise fee is an amount set forth on the Summary Page of the Agreement and is fully earned upon execution. It is nonrefundable in consideration of administrative and other expenses incurred by the company in granting the franchise and for its lost or deferred opportunity to franchise to others [p.88].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a percentage of Net Sales, due on the 15th day after the end of each Accounting Period, with payments required by Electronic Funds Transfer or other pre-authorized methods [p.88]. Additionally, Franchisees must contribute to the Global Marketing Fund, which supports advertising and marketing efforts for the brand [p.106].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement's term length isn't specified in these excerpts. However, you have the option to request renewal after the initial term, subject to certain conditions [p.87][p.86].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, a provision permits the franchisor to refuse to permit a transfer of ownership of a franchise except for good cause. Good cause is not fully detailed in these excerpts but generally includes valid reasons related to maintaining the quality and standards of the brand [p.5].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if the franchisee fails to comply with any lawful provision of the franchise agreement and does not cure such failure within 30 days after receiving written notice [p.5]. Additionally, RHGI (the licensor) may terminate its license agreement with the franchisor under certain conditions, which could lead to the termination of then-effective franchise agreements [p.40].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
Yes, you will have an exclusive territory as specified in the franchise agreement. The Assigned Area, which is determined based on factors like population density and competition, will be your exclusive area to operate a Ruth's Chris Steak House restaurant. This protection does not depend on achieving any specific sales volume or market penetration [p.39].
What training and ongoing support does the franchisor provide?
The franchisor provides an Opening Team to offer on-site training before or after the grand opening of a new restaurant. This training includes approximately 40 hours of classroom instruction and 160 hours of on-the-job training, with Franchisee responsible for all reasonable costs incurred by the Company [p.32]. Additionally, the franchisor's Learning and Development Partner leads the initial Darden Approved Management Training program, which consists of various materials and methods to prepare franchisees [p.31]. Ongoing support is not specified in these excerpts, but Franchisee must ensure all restaurant personnel are trained according to specifications [p.32].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor does not provide representations about a franchisee's future financial performance or past financial performance of company-owned or franchised Ruth's Chris Steak House Restaurants. However, if an existing restaurant is being purchased, actual records of that specific restaurant may be provided [p.50]. Additionally, the franchisor must be informed if any other financial performance information or projections are received [p.50].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the menu items, products, and services that the franchisor has expressly approved in writing. You must obtain core food and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment, and other products from suppliers approved by the franchisor, who must continue to meet their standards. [p.22] [p.45]