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Note 3 - Franchise Programs
3 Months Ended
Sep. 01, 2015
Franchise Programs [Abstract]  
Franchise Programs [Text Block]

NOTE 3 – FRANCHISE PROGRAMS


As of September 1, 2015, our domestic and international franchisees collectively operated 78 domestic and international Ruby Tuesday restaurants and eight domestic Lime Fresh restaurants. We do not own any equity interest in our existing franchisees.


Under the terms of the franchise operating agreements, we charge a royalty fee (generally 4.0% of monthly gross sales for our Ruby Tuesday concept franchisees and 5.25% of monthly gross sales for our Lime Fresh concept franchisees) and require all domestic franchisees to contribute a percentage, 1.5% as of September 1, 2015, of monthly gross sales to a national advertising fund formed to cover their pro rata portion of the production and airing costs associated with our national advertising campaign. Under the terms of those agreements, we can charge up to 3.0% of monthly gross sales for this national advertising fund.


Advertising amounts received from domestic franchisees are considered by RTI to be reimbursements, recorded on an accrual basis as earned, and have been netted against Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss)/Income.


In addition to the advertising fee discussed above, our Ruby Tuesday concept franchise agreements allow us to charge up to a 2.0% support service fee and a 1.5% marketing and purchasing fee. Our last support services contract expired on June 30, 2015. For the 13 weeks ended September 1, 2015 and September 2, 2014, we recorded $0.2 million and $0.5 million, respectively, in support service and marketing and purchasing fees, which were an offset to Selling, general and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive (Loss)/Income.