Ruth’s Chris Steak House Franchise Cost & Owner’s Salary 2024

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 has a special focus on steak dishes along with some seafood specialties. The company went through a lot of changes, but its menu stayed mostly the same.

However, before jumping to invest your money, you must understand that the franchise has certain requirements that must be looked into.

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.


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 bought it back.

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 Steak House 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.


The Franchise Table Of Ruth’s Chris

Cost Or FeesAmount
Initial Investment      $2,539,500-$5,932,500
FranchiseYES
Franchising Since1995
Franchise-Fee$150,000
Royalty-Fee5%
Liquidity$1,000,000
Estimated Outlets150+

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.

However, the exact amount will vary depending on the location. Here’s a breakdown of the costs:

CostsAmount
Initial Franchise Fee$150,000
Initial Marketing$22,500
Formation Cost$2,067,000-$5,335,000
Operating Costs$300,000-$425,000
Total$2,539,500-$5,932,500

Franchise Requirements Of Ruth’s Chris Steak House

Franchise Requirements Of Ruth's Chris Steakhouse

Other than 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 have a cultural alignment with Ruth’s Chris Steak House.

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 of current businesses 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.

Based on this information, we can calculate the net profit of Ruth’s Chris franchise. Here is how:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%4603000.00
Rent11.25%(517837.50)
Insurance5.63%(258918.75)
Salaries22.50%(1035675.00)
Franchise Royalty Fees5.63%(258918.75)
Utilities2.25%(103567.50)
Cost of Goods Sold (COGS)28.13%(1294593.75)
Labor (Variable)14.63%(673188.75)
Total (Expenses)90.00%(4142700.00)
Net Profit10.00%460300.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Failure Rate Of Ruth’s Chris Steak House

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201855550
20195552-3
20205251-1

For the Franchised outlets:

  • In 2018, the failure rate was (0)/55×100≈ Can’t be divided by zero
  • In 2019, the failure rate was (3)/55×100≈ 5.45%
  • In 2020, the failure rate was (1)/52×100≈ 1.92%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20187778+1
20197883+5
20208374-9

For the Company-Owned outlets:

  • In 2018, the growth rate was (1)/77×100≈ 1.29%
  • In 2019, the growth rate was (5)/78×100≈ 6.41%
  • In 2020, the failure rate was (9)/83×100≈ 10.84%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20181321330
2019133135+3
2020135125-10

For Total outlets:

  • In 2018, the failure rate was (0)/132×100≈ Can’t be divided by zero
  • In 2019, the growth rate was (3)/133×100≈ 2.25%
  • In 2020, the failure rate was (10)/135×100≈ 7.40%

According to the data mentioned above, we can see that the franchised outlets for Ruth’s Chris have decreased for all the three years that is from 2018-2021, showing a failure rate between 5.45% and 1.92%.

On the other hand, company-owned Ruth’s Chris outlets grew from 2018-2021, showing a growth rate 1.29% and 10.84%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that Ruth’s Chris experinced growth in 2019 with a rate of 2.25%. Then in 2020, the restaurnt chain started to decline at a rate of 7.40%.


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

So, based on these figures and the calculation, we can see that it will take 9.2 years for you to recoup your initial investment amount on average.

However, this time period could be more or less depending on your actual 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, then they can also renew the term for 10 years.


Ruth’s Chris Steak House Franchise Comparison

NameFranchise FeeRoyalty FeeInitial Investment
Teriyaki Madness$45,0006%$312,500-$731,260
Fat Shack$25,0006%$150,250-$419,750
Salata Franchise$40,0005%$285,500-$889,000
Ruth’ Chris Steak House$150,0005%$2,539,500-$5,932,500


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, other than all these costs, the franchisor also mentioned certain requirements of its ideal franchisee. So, before investing, do check all the franchise requirements to own Ruth’s Chris franchise.

Additionally, the franchise also 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 located 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 special in the market.

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