BusinessTN

Ruby Tuesday made its big splash during the 1982 World’s Fair international culture fest, so it seems fitting that its next frontier lies across the pond.

The Maryville-based casual dining restaurant chain says its global franchising efforts, which began in 1997, account for about 6% of its 880 restaurants. This is a fraction of Ruby Tuesday’s total annual revenue, which was $338.7 million for the first quarter 2006.

The company’s $45 million domestic foray into heavy television advertising to compete with bar-and-grill giants Applebee’s and Chili’s has finally started to generate some positive returns with revenue up 9.9% last year.

So why bother growing globally? Simple: It makes good business sense.

[It’s] all about partnering with franchisees that have the same principles. We’re looking for that as opposed to specific markets,” says Mark Ingram, Ruby Tuesday’s president of franchising. His moderate goal of opening 10 new restaurants annually (having just added Saudi Arabia) is in line with corporate’s careful, cautious nature.

The challenges in going international vary depending on the country and culture. Ruby Tuesdays can be found in 16 countries with the most stores in India and Chile. “Ruby Tuesday is an ethnic restaurant in their country. People go there to have an ethnic experience of simple American dining,” Ingram says.

As its U.S. restaurants continue to roll out its new steak entrees to the menu, some franchisees may limit inventory in countries where beef consumption is not culturally acceptable. Nonetheless, Ingram’s team strives to keep all the stores’ branding and menu, foreign and domestic, consistent across the globe.

Available real estate tops Ingram’s list as his biggest challenge. Most overseas Ruby Tuesday restaurants are in strip malls as opposed to stand-alone stores because land is very expensive (as in Kuwait, where no land is for sale).

This type of investment has to be worth your while, says Marcel Portmann with the International Franchise Association. Many companies find U.S. markets to be saturated and look elsewhere to expand, he says.

A Ruby Tuesday franchisee has to have more than big dreams—a minimum three years of restaurant management experience, a net worth of $5 million and a financial liquidity of at least $1 million per unit are required before a location will be developed. And it’s a long-term relationship, as all international franchisees must sign a multi-year, multi-unit deal, Ingram says.

As Ruby Tuesday battles stiff competition at home, it probably feels good to have some breathing room elsewhere in the world.