Case Study: Ruth’S Chris - The High Stakes Of Int

1723 Words7 Pages
Case Study: Ruth’s Chris - The High Stakes of International Expansion EXECUTIVE SUMMARY Our 2005 Annual Report advised stakeholders about an “accelerated development plan for expanding Ruth’s Chris footprint through both company-owned and franchised locations”. It is now June 2006 and our Q4 is due at the end of the month. Our Board of Directors and shareholders are anticipating plans for expansion. Our five most recent franchisees have the rights to develop new restaurants, but their revenues will not be posted until 2007 Q1. I have developed a three phase strategy to reassure Wall Street and new shareholders of our growth potential. Failure to develop these plans will result in low revenue growth, reduced stakeholder confidence, decreased share value and the possibility of not meeting agreed IPO terms. KEY ASSUMPTIONS • The 2006 recession leaves less money for discretionary spending. • We lost revenue in 2006 from a temporary restaurant closure in New Orleans due to Hurricane Katrina. • High inflation, high commodity costs (specifically beef, lamb and seafood) and fluctuating gas prices make it difficult to maintain current restaurant pricing which will affect profit and loss statements. • Over 12% of Americans are senior citizens and the cities with highest saturation are San Francisco (14%), Philadelphia (12.7%) and New York (11.9%). • Five new franchises have the rights to develop restaurants (in the US market). • Many top prospective countries currently do not allow the importation of US beef. This is believed to be a political (rather than a cultural) variable and could change quickly due to the global trend towards free trade. • Data on how often people dine out or their affinity toward US brands is not currently available. The success of other US casual dining restaurants in a target country might be a good indicator of how its

More about Case Study: Ruth’S Chris - The High Stakes Of Int

Open Document