Note 3 - Franchise Programs

3 Months Ended

Aug. 30, 2016

Notes to Financial Statements

Franchise Programs [Text Block]

3. Franchise Programs

As of August 30, 2016, our franchisees collectively operated

68 domestic and international Ruby Tuesday 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)

, a marketing and purchasing fee (generally 1.5% of monthly gross sales), and a national advertising fee (generally 1.5% of monthly gross sales as of August 30, 2016, but up to a maximum of 3.0% under the terms of the franchise operating agreements).

Amounts received from franchisees for the marketing and purchasing fee and national advertising fee 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. For the 13 weeks ended August 30, 2016 and September 1, 2015, we recorded $

0.2 million and $0.5 million, respectively, in marketing and purchasing fees and national advertising fund fees.