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Note C - Franchise Programs
6 Months Ended
Dec. 02, 2014
Franchise Programs [Abstract]  
Franchise Programs [Text Block]

NOTE C – FRANCHISE PROGRAMS


As of December 2, 2014, our domestic and international franchisees collectively operated 81 Ruby Tuesday restaurants and eight Lime Fresh restaurants. We do not own any equity interest in our 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 December 2, 2014, 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, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.


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. For the 13 and 26 weeks ended December 2, 2014, we recorded $0.2 million and $0.7 million, respectively, and for the 13 and 26 weeks ended December 3, 2013, we recorded $0.3 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.