Rita’s Italian Ice Franchise Costs $22K – $643K (+ 2024 Profits)

Rita’s Italian Ice was founded in the summer of 1984 by Bob Tumolo, a former Philadelphia firefighter. He started the business on the front porch of his home in a suburb of Philadelphia, naming it after his wife, Rita.

The brand began franchising shortly after its establishment, building on the popularity of its unique Italian ice and frozen custard offerings. 

Rita’s Italian Ice is headquartered in Trevose, Pennsylvania, and it has grown significantly over the years, maintaining a strong presence in the frozen dessert market with locations in over 30 states​.

Type of Expenditure	Amount
Initial Franchise Fee	$35,000
Lease Deposit	$0-$12,500
Leasehold Improvements	$212,537-$292,000
Equipment	$108,500-$154,753
Permits & Licenses	$1,313-$10,000
Signage	$10,628-$37,421
Insurance	$200-$3,920
Initial Order	$8,000-$17,500
Minimum New Shop Marketing Expenditure	$12,000
Training	$50-$5,000
Architect and Attorney Fees	$12,545-$33,000
Additional Funds (3 months)	$20,000-$30,000
Total	$420,773-$643,094

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

The initial franchise fee for a Standard or Express Shop is $35,000. This fee is required to be paid as a lump sum at the time of signing the Franchise Agreement and is non-refundable.

Royalty Fee

A continuing royalty fee of 6.5% is applied to the estimated sales from Rita’s-Mix Items and/or 6.5% of Gross Sales on Menu Items that are Non-Mix Items or Non-Mix Items charged as an additional fee. The Yield Based Royalty is paid upon the purchase of Rita’s-Mix Items, and the Non-Yield Based Royalty is paid weekly.

Advertising Contribution

The advertising contribution is set at 3.0% of estimated sales on Rita’s-Mix Items and 3.0% of Gross Sales on Menu Items that are Non-Mix Items or Non-Mix Items charged as an additional fee.

Minimum Local Advertising Expenditure

Franchisees must spend an average of 2% of Gross Sales per week on local advertising, with a potential increase up to a maximum of 3% as prescribed by the franchisor.

Training for New or Replacement Manager(s)

The fee for training new or replacement managers is the franchisor’s then-current fee for Initial Training, which is currently set at $500.

Site Selection Fee

The site selection fee ranges from $100 to $1,000, depending on specific requirements and circumstances.

Relocation Fee/Lost Profits During Relocation

A non-refundable relocation fee of $2,500 is required, in addition to Royalty Fees and Advertising Contributions for the period the Shop or Satellite is closed during relocation.

Transfer Fee

The transfer fee is set at 50% of the then-current initial franchise fee for the same type of Shop and/or Satellite.

Renewal Fee

For the renewal of a Shop, the fee is 50% of the then-current initial franchise fee for the type of Shop being renewed. For a Satellite, it’s 50% of the then-current initial franchise fee for a Satellite, and for a Mobile Unit, the renewal fee is $500.

Franchise Pros and cons

Pros

• Extensive Training: Rita’s Italian Ice offers franchisees comprehensive training about its business model. It also trains franchisees on how to establish and operate a successful franchise. This includes 40 hours of classroom training and 40 hours of on-the-job training.
• Marketing planning and support: Rita’s employs substantive marketing and advertising techniques to create awareness and publicize its products. It provides franchisees with promotional campaigns, social media marketing, regional advertising, loyalty programs, etc. to market their products to a wide audience.
• Variety and innovative menu: Rita’s has a variety of American-Italian menu items and guarantees fresh, quality frozen treats for everybody. In addition, they keep innovating new flavors to cater to a changing market and customer preferences. It is a unique brand and offers customers a great family experience. Franchisees can stand out from the competition and attract a lot of traffic.
• Exclusive territory: The brand provides franchisees with a protected exclusive territory in which to operate their businesses. The franchisor does not grant any other franchises or operate competing channels in the area. Franchisees can scale and expand with ease.
• Simple business model: Rita’s brand has a simple and proven business model. Franchisees can easily operate a Rita’s Italian Ice franchise as it requires less equipment and staff, which also provides growth and success.
• Multiple franchise formats: The brand provides franchisees with flexible franchise formats. Depending on their budgets, franchisees are at liberty to operate either a standard shop with walk-up or walk-in options as well as outdoor or indoor seating options. Franchisees can expand standard shops through mobile units or satellites to increase their earning capacities.

Cons

• Not a passive investment: Rita’s requires franchisees to be actively involved in the routine operations of their restaurants. Besides, franchisees should be open all the time since it is not a part-time business.
• Seasonal products: Ice is not an all-year-round customer favorite. This may cause franchisees’ sales to decline in the winter and force them to introduce alternative menus to remain competitive.
• No financing: Rita’s Italian Ice does not directly or indirectly finance its franchisees for the franchise fee, trade fixtures, or inventory. Franchisees must approach third-party affiliates that may not be related to the franchisor.

How to apply

Opening a Rita's Ice franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Rita's Ice franchise.

1. Submit Questionnaire

• Determine financial eligibility by completing a questionnaire provided by Rita’s franchise team.
• Minimum financial requirements include $100,000 in liquid cash and a net worth of at least $300,000.

2. Present Franchise Disclosure Document (FDD)

• Upon approval of the financial questionnaire, receive and review the Franchise Disclosure Document to understand the business model and legal aspects.

3. Review Franchise Disclosure Document

• Carefully examine the details in the FDD, including financial performance, franchisee obligations, and franchisor support.
• Seek clarification or legal advice on any aspects of the document that are unclear.

4. Operations and Training Overview

• Gain insights into the day-to-day operations of a Rita’s franchise.
• Understand the training and support provided to franchisees to ensure successful operation.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.