Quarterly report pursuant to Section 13 or 15(d)

Advertising Costs

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Advertising Costs
9 Months Ended
Oct. 02, 2011
Advertising Costs  
Advertising Costs

7.                       Advertising Costs

 

Costs incurred in connection with the advertising and marketing of the Company are included in selling, general, and administrative expenses.  These costs include salaries, variable compensation, advertising, media, and marketing materials. Media costs are expensed as incurred or when the advertisement first runs. Such costs amounted to $6.5 million and $23.3 million for the twelve weeks and forty weeks ended October 2, 2011, respectively, and $6.4 million and $23.3 million, respectively, for the twelve and forty weeks ended October 3, 2010.

 

Under the Company’s franchise agreements, both the Company and the franchisees must contribute a minimum percentage of revenues to two marketing and national media advertising funds (the “Marketing Funds”).  These Marketing Funds are used to develop and distribute Red Robin branded marketing materials, for media purchases and for administrative costs.  The Company’s portion of costs incurred by the Marketing Funds is recorded as selling, general, and administrative expenses in the Company’s financial statements.