Not what I ordered…

August 28, 2007

images.jpgWe searched through Ruby Tuesday (RT)’s entire menu, but didn’t find one mention of blackberries. So why does the word blackberry show up ten times in Ruby’s latest proxy? That’s because blackberry refers to the Blackberry Hotel Company, a private company owned by CEO Samuel Beall III.

For a restaurant chain that doesn’t even serve blackberries, Ruby is paying out quite a bit to this Beall-owned fruity hotel company. In 2005 and 2006, Ruby Tuesday paid about $1 million to remodel and expand its 62-bedroom Ruby Tuesday lodge and restaurant. But about half of that amount went to Blackberry Hotel Company for its 35% ‘design fee’ and its 15% surcharge for contracting certain third-party services.

In this year’s proxy, Blackberry hasn’t been doing any more design and construction work. Nonetheless, Blackberry still earned $12,782 for ‘management programs’_ held at Blackberry Farm. Judging by this chart, however, we’re sure that shareholders are grumbling about some sour berries.

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NOTE: While Michelle is out, comments are turned off. But don’t despair — all submitted comments will be posted next week when Michelle returns.

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