Are you looking to franchise opportunity that’s medium rare? Let me introduce you to Ruth’s Chris Steak House. The name may be difficult to say at times but they’re one of the most popular steak houses in the United States. In fact, they’re number 4 based on a 2020 ranking of steakhouses by total sales.

How much does it cost to open Ruth’s Chris? Ruth’s Chris requires prospective franchisees to have a minimum liquid capital and net worth of $1,000,000. The initial investment range is $2,539,500 to $5,932,500 and the initial franchise fee is $150,000. As you can see this is on the more expensive end of food franchises you can open.

Excited about opening up high-end steakhouse of your own? Read on for financial details about Ruth’s Chris, the revenue you can expect to generate and the total costs. You can also take 7-minute quiz to be matched with a franchise opportunity that matches your interests. 

Financial Requirements and Fees

Here are the basic startup costs and fees to expect when you franchise Ruth’s Chris Steak House:

Aside from the fees listed above, Ruth’s Chris requires a royalty fee of 5%. Do note that the liquid capital and net worth mentioned is per restaurant to be developed. So if you want to open two locations, double these estimates.

Average Sales / Revenue per Year

Ruth’s Chris Steak House has seen $429.12 million worldwide in revenue in 2021. They’ve seen an increase in revenue as compared to their 2020 sales that were only $277.75 million. Of course, we can all remember the global challenges restaurants faced in 2020 so I wouldn’t be overly concerned with those numbers.

Ruth’s Chris Franchise Facts

In 1965, Ruth Fertel saw a 60-seat local steak house known as Chris Steak House that was up for sale in a classified ad in New Orleans. She mortgaged her house and bought the steak house and worked hard to turn around the establishment. Unfortunately, in 1976, a fire destroyed the steak house which made her look for a new location. And since her contract stated that she could not keep the name of the restaurant, she added her name to it which is what we all know as Ruth’s Chris Steak House to this day.

Her first franchise was set up in 1977 and the business began to grow. Presently, Ruth’s Chris can be found not just in the United States but in several countries as well such as Canada, Aruba, Panama, Puerto Rico, Mexico, Singapore, China, Indonesia, Japan, Taiwan, Hong Kong, and the Philippines. Eventually, Ruth Fertel was known as the First Lady of Steak.

Ruth’s Chris is an upscale restaurant known for their sizzling plates which Ruth introduced back in 1967. Their menu includes USDA Prime corn-fed Midwestern beef from premium beef suppliers. The cuts of their steak menu include filet mignon, bone-in ribeye, tomahawk ribeye, New York Strip steak, and Porterhouse steak. They also serve lamb chops, roasted chicken, lobster tails, shrimps, salmon, crab cakes, and sea bass.

Excellent service is not rare at Ruth’s Chris.

Salads and sides cannot be missed when you are at a steak house. Ruth’s Chris serves creamed spinach, garlic mashed potatoes, steak house salad, Caesar salad, lobster bisque, roasted Brussels sprouts, crab cakes, artichoke dips, calamari, and more. Cap off the luxurious dinner with their dessert such as their chocolate sin cake, crème brûlée, bread pudding, and cheesecake.

You can also enjoy a variety of wine, champagne, and cocktails at Ruth’s Chris. Planning to bring your own wine? You can at select locations. You’ll have to call up the location you’re planning to bring your wine to so you can inquire what the corkage fee is as well.

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Steak houses are usually known to open for dinner but Ruth’s Chris is also open for lunch, breakfast, brunch, and happy hour although you’ll have to check with your nearest Ruth’s Chris location before going there since not all locations have an all-day schedule. Ruth’s Chris also offers take outs and curbside catering.

Ruth’s Chris Steak House is open for franchising and for a franchisee to fit the criteria in addition to meeting the liquid capital and net worth is that hospitality experience in food service is a must which includes casual dining or hotel experience. The interested franchisee must also have a multiple restaurant development plan for Ruth’s Chris.

Ruth’s Chris also requires the following documents from their interested applicants:

• Completed franchise application (for each proposed individual who will have a 10%+ interest)
• Current personal financial statement
• Prior 3 years’ tax returns or CPA audited financial statements (domestic only)
• Credit, business and personal references
• Balance sheet, P&L, cash flow statement per existing hospitality operation
• Brochure or profile of current businesses to include a biography of each proposed principle

The franchise partner that Ruth’s Chris is looking for must also possess the following qualifications:

• A proven track record of operating in hospitality systems.
• An infrastructure dedicated to the development of the Ruth’s Chris brand.
• Local knowledge and expertise in the areas of consumer preferences, real estate, government regulations, labor, and distribution issues.
• Access to adequate capital to develop entire development schedule.
• Culturally aligned with Ruth’s Chris Steak House.

If you’re on board with all of these, you may send an email of inquiry to [email protected].

Ruth’s Chris Steak House is managed by Ruth’s Hospitality Group, Inc. The brand is headed by Cheryl Henry who is president, chief executive officer and chairwoman of the group. Their headquarters is located at Winter Park, Florida.

How Much Does Ruth’s Chris Make in Profit?

According to reports, Ruth’s Chris Steak House saw a profit of $121 million in 2021. Their previous year’s profit came in at $51 million. Of course, we all know 2020 was a challenging year for upscale dining that relies on on-site dining and liquor sales to pad profits so I’d give the company a pass that year. This decline in profit was outside anyone in the company’s control.

Doing some back of the napkin estimates on average gross profit from 2021, you could expect the company to bring in an average gross profit of $812,080 annually. Obviously, you need to keep in mind that certain locations would outperform and underperform this figure.

Advantages of a Ruth’s Chris Franchise

You might be wondering what advantages there are in franchising Ruth’s Chris Steak House? Here are a few of the strengths you can expect.

Specialty Diets

Ruth’s Chris is known as a high-end steak house so you might be wondering if they would even cater to specialty diets such as gluten-free options or a vegetarian meal. They do! They have a vegetarian menu, a gluten-friendly menu, a keto diet menu, and a “lighter recommendations” menu which is a three-course meal that’s less than 750 calories. Not bad considering some flavored drinks contain more calories than that.

So if you franchise a Ruth’s Chris Steak House, know that this brand is not just all about steak. The company pays attention to changing customer preferences and provide a wide-range of consumers a delicious meal no matter what they want to eat.

Quality Steaks

Ruth’s Chris takes their steaks seriously which is why they’re right up there against major steak house players in the industry. There have been a lot of good reviews when it comes to their steaks. Some call their steaks “melt in your mouth” while others call the food “amazingly delicious”. Sure there are some bad reviews when it comes to the service. But the steaks? Always a must-try.

Global Presence

As mentioned above, Ruth’s Chris isn’t just located in the United States. They’re also found around the world with around 23International franchisee-owned restaurants. Their global presence has helped them reach high revenues which should continue to grow if they continue to expand. They don’t seem to be stopping anytime soon when it comes to franchising as well which is a good sign that they’re doing quite well in the steak industry.

Challenges of a Ruth’s Chris Franchise

Businesses will always have their set of challenges, even fancy steak houses that have been running for over 50 years. Here are some you can expect.

Mixed Employee Reviews

The reviews for Ruth’s Chris’s steaks may be positive. But when it comes to employees working there, the reviews are mixed. One claimed that it felt like the business wanted them to put their job above their family and education. One even said that the business seemed greedy since it seemed like they were taking away hours from their bartenders and servers so the business wouldn’t have to pay benefits and insurance.

On the other hand some appreciate the flexible work schedule. Some also appreciate that employees work from the bottom up which means that you can get promoted until you reach your desired position.

Servers at Ruth’s Chris are also reportedly getting paid well. One even claimed they make around $ 25 to 30 per hour although this probably varies per location.

PPP Backlash

Back in 2020 when the pandemic hit, a lot of businesses suffered from the lockdowns with some sadly closing down. To help small businesses, the government released a Paycheck Protection Program that released $ 349 billion in funding. However, only 5% of small businesses were able to receive the PPP when 60% applied for funding.

It turns out that big businesses were also able to receive the PPP and one of them was Ruth’s Chris Steak House. They faced numerous backlash for the PPP was intended for small businesses which Ruth’s Chris obviously is not and they could have gotten other sources for funding their workers.

Eventually, Ruth’s Chris was able to return the $ 20 million loan they got from the PPP. And though this issue was resolved, this was able to put a dent on Ruth’s Chris reputation which you might be carrying if you do decide to franchise this steak house.

Expensive

Everything about Ruth’s Chris is expensive. From the franchising financial expenses down to their menu, Ruth’s Chris is dubbed for being overpriced. But that’s expected since they are an upscale restaurant and serve prime quality steaks. Customers also pay for the service and ambiance which makes them a high-end spot for dinner dates and business meetings.

But if you do plan in franchising Ruth’s Chris, do know that this brand can be expensive so you’ll need to do your research whether the location you’ll be bringing them in has a population that can afford dining at this steak house.

At the end of the day, when you serve high-quality steak the reality is the menu will be more expensive than a burger joint. Most customers will anticipate paying more for dinner at your establishment. Steakhouses are often visited for a special night out like a date or celebration where folks are ready to splurge.

Is the Ruth’s Chris Franchise Right For You?

If you have the financial capacity to franchise Ruth’s Chris Steak House and can locate a prime location in your area, franchising this steak house brand certainly has potential based on the revenue estimates. The concept should also see strong headwinds as we move out of the pandemic and life returns to normal again. All in all, just remember to read the franchise disclosure documents carefully before finalizing and signing an agreement.

What is an alternative Ruth’s Chris franchise?

One upscale steak house chain you can franchise is Morton’s The Steak House. They started in Chicago in 1978 and are now located around the United States as well as in China, Japan, Singapore, Taiwan, Puerto Rico, and Canada.

As of the moment, Morton’s The Steakhouse has not disclosed their financial requirements to franchise with them but they will respond to inquiries.

Over 203.79 million Americans consumed steak in 2020. These numbers have seen a steady increase through the years in spite of the increased consumption of alternative meats.

So if you’re planning to open a steak house this concept is worth investigating further. With all the information I’ve presented on Ruth’s Chris Steak House, I hope you’ve got a better understand how the business works and what the potential is.