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Ruby Tuesday seeks Tri-City franchise owner

As Ruby Tuesday enters its 20th year of franchising, the national restaurant chain has renewed its focus to expand into high-value, target markets—including the Tri-Cities.

Of the more than 700 restaurants around the globe, Ruby Tuesday can be found in 44 states, the majority of which are in the Southeast, Northeast, Mid-Atlantic and Midwest markets.

“We’ve plowed the ground from the Southeast to the Northeast, and we want to leverage franchise options in the Northwest,” said James Vitrano, vice president of franchise development and operations. “The Northwest is a beautiful area. We want to expand our reach, and the Tri-Cities area—from a demographic standpoint—is typical America where families live and appreciate good value and good food.”

Vitrano said the company became interested in the Tri-Cities after looking at census data, including demographics, annual salaries and economic trends. After that initial phase of analytics, Ruby Tuesday then looks at the prospective area’s general restaurant base to decide how much additional effort to put forth to pursue a potential franchise owner.

“There’s a method behind the madness to developing areas in the Northwest that are similar in demographics and economics to our successful franchises,” Vitrano said. “We’re mining for diamonds.”

Founded in 1972 by Sandy Beall, the company now has more than 40,000 corporate and franchise team members. The majority of Ruby Tuesday restaurants are corporate-owned with fewer than 100 operating as franchises.

Vitrano said the company is looking at mid-market areas that haven’t been introduced to Ruby Tuesday and seeking out potential franchisee opportunists in a targeted fashion.

“There’s no cookie-cutter franchisee. We’re looking for somebody who has an interest in entrepreneurial opportunities,” said Vitrano, adding, “We’re looking for someone who has ties to the community they’ll be doing business in because we find owning a restaurant is a community event. When you have an owner or owners who are tied into the community, you have franchises that are successful.”

Another benefit of finding someone tied to the community, he said, is that they’ll know it well enough to recognize the high-traffic areas. But even with hometown knowledge, Vitrano said Ruby Tuesday provides support to ensure entrepreneurs have a strong foundation to start from.

“We’ve opened 700 stores over the last 44 years. We know what’s worked and what hasn’t,” he said.

Ruby Tuesday is a casual dining restaurant that features American classics, like hand-crafted burgers, steaks and sandwiches. Vitrano said 80 percent of the reason people choose to eat out is because of the food quality and this factor also comes into consideration when someone decides to get into the restaurant business.

“The question (to potential franchisees) becomes, ‘Why Ruby Tuesday and not competitors?’ Well, our food quality is hands down better. Our ribs are hands-down phenomenal—and don’t tell my dad they’re better than his,” he said with a laugh. “Food quality is the draw, and our garden bar is a differentiator. No casual dining space has that differentiator. The ability to add a side salad with 30 to 40 items is an enticing value proposition and a distinguished difference.”

Someone interested in owning a franchise may first reach out to Vitrano and his team. Usually several conversations will take place as part of a getting-to-know-you interview.

“It’s like dating,” said Vitrano. “You have to find that perfect match.”

 

How much it costs

Once a match is made, the franchisee and Ruby Tuesday would enter into a development agreement. Vitrano said a potential franchisee needs to be able to build a restaurant, which would cost between $1.5 million and $2.5 million.

Ruby Tuesday does not have a minimum liquid asset requirement. Franchise terms vary but typically initial terms are 10 to 15 years with an initial franchise fee of $35,000 per restaurant, dependent upon the number to be opened, and a $10,000 per restaurant development fee, also dependent upon number.

There also is a royalty fee of 4 percent of the restaurant’s monthly gross sales and a corresponding marketing fee up to 3 percent of monthly gross sales.

While the construction process starts on the restaurant, Vitrano said the business owner and their management team would travel to the RT Lodge in Maryville, Tennessee. The private mansion was purchased by Ruby Tuesday in 1997 and developed as a corporate retreat.

“We’re going to show you how to make the drinks and cook the food—teach you how to run a Ruby Tuesday. We’re not teaching you how to run a restaurant, because the team you’re hiring should have restaurant experience,” he said. “But we’re going to Ruby Tuesday-ise you.”

After training at the RT Lodge, the operations team would come out to the new franchise location for about two weeks to ensure a smooth kick off.

“We make sure you remember everything you learned,” he said. “We stay with you through the opening. There’s a significant amount of training and support—especially in new franchisees.”

Vitrano said he talks with franchisee owners monthly, and the development and operations team tries to visit locations every quarter.

“I speak to our (franchise owners) in Hawaii, Romania, Hong Kong, Kuwait—it’s important to us to stay connected,” he said. “We’re in business together. Their success is important to me and our company.”

Those interested learning more can email the company at franchisewithus@rubytuesday.com.

Vitrano said if a person contacted them this year and both parties agreed to move forward, as long as financing and a building site were secured, it could take less than a year for a restaurant to open in the Tri-Cities.

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