Do you know that according to IBIS World, the market size of the Premium Steak Restaurant industry was $7.7 billion in 2023? This seems like a golden opportunity for investors looking to enter this industry, and what’s better than entering through the Ruth’s Chris franchise- a proven experience and reputation franchise?
It is a restaurant chain with over 100 steakhouses across the United States. Ruth’s Chris menu focuses particularly on steak dishes and seafood specialities. The company underwent many changes, but its menu mainly stayed the same.
However, before investing your money, you must understand that the franchise has specific requirements that must be considered.
Therefore, keep reading this article to get every minuscule detail of the Ruth’s Chris franchise and what the franchisor will offer to its franchisees.
Table of Contents
About Ruth’s Chris Steak House
The story of Ruth’s Chris started when Chris Steak House was founded in 1927 by New Orleans entrepreneur Chris Matulich.
During the management of Matulich, the business was sold 6 times, and each time, it failed, and Matulich repurchased it.
Then, in 1965, Ruth Fertel, a divorced single mother, purchased the restaurant and sold 35 steaks at $5 each. The first franchise of Ruth’s Chris Steakhouse was opened in 1977 by a loyal customer named Thomas J. Moran.
The chain expanded rapidly in the next two decades with 66 locations in the United States, achieving over $200 million in annual revenue.
Since then, Ruth’s Chris Steak House has continued to develop a chain of upscale restaurants that offer steak and other side dishes.
How Much Does It Cost To Open Ruth’s Chris Franchise?
To open a Ruth’s Chris Steak House franchise, you require a total investment ranging from $2,539,500-$5,932,500. This information is based on the Franchise Disclosure Document of the restaurant chain.
Franchise Requirements Of Ruth’s Chris Steak House
Besides the initial franchise fee and initial investment, the Ruth’s Chris franchise also has some requirements for its franchisee.
Firstly, the franchisee must have a proven track record of operating in hospitality systems and be culturally aligned with Ruth’s Chris Steakhouse.
The restaurant chain also requires liquidity and a net worth of $1,000,000 per restaurant to be developed.
The franchisee must have access to adequate capital to develop the entire development plan.
Additionally, there are a few documents required by the franchisor that are listed below:
- Completed franchise application (for each proposed individual who will have 10%+ interest.
- Current personal financial statement
- Prior 3 years tax returns or CPA audited financial statements (domestic only)
- Credit, business, and personal references
- Brochure or profile by current companies to include a biography of each proposed principle.
- Balance Sheet, P&L, and Cash Flow Statement per existing hospitality operations
Ruth Chris Revenue, Profit & Owner’s Salary
According to Zippia, Ruth’s Chris Steak House has 6,102 employees, and the revenue of Ruth Chris’s Steak House is $468 million.
When talking about the revenue of its franchise, then according to the average unit volume disclosed in the Franchise Disclosure Document, the Ruth’s Chris franchise generates $4,603,000 in revenue per year.
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual fees may vary due to location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Payback Period Of Ruth’s Chris Steak House
Using the mid-point investment of $4,236,000 and average profits of $460,300, we can determine how long it will take to earn back the initial investment:
Payback Period =Mid-Point Investment / Yearly Profit = $4,236,000 / $460,300 = 9.20 years
Based on these figures and the calculation, it will take 9.2 years for you to recoup your initial investment amount on average.
However, this period could depend on your total initial investment and profits earned.
Training And Support Of Ruth’s Chris Franchise
Ruth’s Chris Steak House franchise also offers an initial training program of 708 hours. This includes:
- On-The-Job Training- 472 hours
- Classroom Training- 236 hours
Terms Of Agreement & Renewal Of Ruth’s Chris Franchise
The initial franchise term of Ruth’s Chris is for 20 years.
Moreover, if the franchisees have complied with the Franchise Agreement during its term, they can renew it for ten years.
Conclusion
So, here is all the information required to own Ruth’s Chris Steak House Franchise. This information contains the initial investment, royalty fees, and franchise fees.
However, besides all these costs, the franchisor also mentioned specific requirements of its ideal franchisee. So, before investing, check all the franchise requirements for owning a Ruth’s Chris franchise.
Additionally, the franchise offers necessary training and support to the franchisee, which is mandatory for the business to run smoothly.
FAQs
Where Is The Headquarters Of Ruth’s Chris Steak House?
The headquarters of Ruth’s Chris is located in Winter Prak, Florida, and has 13 offices throughout the United States.
Who Owns Ruth’s Chris Steak House?
The parent of Olive Garden, Darden Restaurants, acquired Ruth’s Chris Steak House for $715 million. Therefore, Darden Restaurants is the owner of Ruth’s Chris.
What Is So Special About Ruth’s Chris Restaurants?
Ruth’s Chris only uses the finest custom-aged, corn-fed Midwestern beef. Their signature chops are almost impossible to find in supermarkets, which makes them unique in the market.