Rita's Ice Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$22,000

-

$643,000

LOCATIONS

537

Emily

Updated

April 11, 2024

Is

Rita's Ice

a franchise?

Yes,
Rita's Ice
currently
accepts
franchise
applications

Rita’s Italian Ice is an American quick-service restaurant chain celebrated for its delicious offerings of Italian ice, frozen custard, a wide range of frozen treats, and other unique specialty creations.

The specialty sweet treats chain is based in Bensalem, Pennsylvania, where it was established in 1984 by a former firefighter, Bob Tumolo. The chain's founder named it after his beloved wife, Rita Tumolo and it still maintains its family roots and commitment to the communities it serves.

Rita’s Italian Ice also offers a delightful assortment of frozen desserts, frozen yogurt, ice cream, and indulgent milkshakes on top of its American-Italian traditions.

Rita’s embarked on its franchising journey in 1989 and has since flourished, with a widespread presence comprising over 600 units across the United States.

How many

Rita's Ice

franchises

are there?

In 2022, there were
537
outlets in
the United
States, of which
537
are franchises, and
0
are corporate-owned.

What are the

Rita's Ice

franchise

fees?

Advertising fee

5.00%

Initial Franchise Fee ($35,000)

The initial franchise fee for Rita's Ice is $35,000. This fee grants the franchisee the right to operate a single Rita's Ice location and is fully earned upon receipt, being non-refundable.

Royalty Fee (6% of Gross Sales)

Franchisees are required to pay a royalty fee of 6% of Gross Sales. This fee is for the continued use of the Rita's Ice trademarks, the system, and ongoing support.

Advertising Contribution (5% of Gross Sales)

Franchisees are required to make Advertising Obligation contributions and expenditures for marketing and promotion. The specifics of the Advertising Contribution are as follows:

  • Branding Fund: Franchisees are obligated to contribute to the Branding Fund. This fund is used for system-wide advertising, marketing, and promotional programs. The contribution rate is calculated based on 3% of the company's estimate of the amount of gross sales derived from the retail sale of menu items.
  • Local Advertising and Promotion : In addition to the Advertising Contributions for the Branding Fund, franchisees are required to spend an average of 2% of Gross Sales of all Menu Items on local advertising in the manner prescribed by Rita's Ice. This encompasses the direct costs of purchasing advertising materials, media, promotion, and other related expenses. Rita's Ice reserves the right to increase this Minimum Local Advertising Expenditure to a maximum of 3%.

Transfer Fee ($7,500)

If a franchisee wishes to transfer their Rita's Ice franchise to another party, there is a transfer fee of $7,500.

Audit Costs (Cost of audit)

If Rita's Ice needs to conduct an audit due to discrepancies or concerns with a franchisee's reported figures, the franchisee is responsible for the cost of the audit.

Renewal Fee ($7,500)

When the franchise agreement term ends, if the franchisee wishes to renew their agreement, there is a renewal fee of $7,500.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Rita's Ice

franchise?

It costs between
$22,000
and
$643,000
to start a
Rita's Ice
franchise.

For those considering opening their own Rita's Ice outlet, there are several shop options available, each with its own set of costs. Curious about the details? Check out the breakdown of the total investment for each type of Rita's Ice shop below.

Total Investment for Each Franchise Option:

  1. Standard Rita’s Shop without a Drive-Thru: Costs range from $278,333 to $624,695.
  2. Standard Rita’s Shop with a Drive-Thru: Costs are between $420,773 and $643,094.
  3. Express Rita’s Shop: Costs range from $179,005 to $518,504.
  4. Rita’s Satellite Shop: Costs are between $131,550 and $298,500.
  5. Rita’s Mobile Unit: Costs range from $21,600 to $149,000.

Initial Investment for a Standard Rita’s Shop with a Drive-Thru:

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.

Does

Rita's Ice

provide

training

to its

franchisees?

Yes,
Rita's Ice
provides
training

Rita's Ice ensures that its franchisees are well-equipped to operate their shops effectively. Here's a detailed look into their training and support:

  • Pre-Opening Training and Assistance: Before the opening of a Rita's Ice shop, the company provides its initial training for system franchisees and managers. This training, known as "Initial Training," is designed to prepare up to two trainees. While the initial training for the first two trainees comes at no charge, any subsequent training might come with a fee set by the company.
  • On-Site Pre-Opening Oversight: Apart from the initial training, Rita's Ice also offers on-site pre-opening oversight and assistance, ensuring that franchisees have all the support they need before they start their operations.
  • Employee Training: Franchisees are responsible for ensuring that their staff is competent, trained, and capable of preserving good customer relations. They must render competent, prompt, courteous, and knowledgeable service in line with the company's standards.
  • Marketing and Promotion: Franchisees are also provided with guidance on local advertising and promotion. This includes details on purchasing advertising materials, media, promotion, and other related expenses.

Does

Rita's Ice

provides

territory

protection?

Franchisees receive the right to operate a Rita's Ice Shop at a specific location that Rita's Ice accepts. This location is within a "Designated Area" specified by Rita's Ice in the Franchise Agreement. The Designated Area is appointed solely for site selection and does not confer any territorial exclusivity or protection to the franchisees.

Furthermore, the size and scope of the Territory will be determined by Rita's Ice on a case-by-case basis, considering various factors such as demographics, existing and potential shop competition, projections of growth in the area, and the economic environment.

Can a

Rita's Ice

franchise

be run as

a passive

investment?

Franchisees of Rita's Ice are expected to be actively involved in their restaurant's operations. If the franchisee is a business entity, they must designate a "Designated Owner."

This Designated Owner should be committed to managing the operations of the Shop and must live within a one-hour drive time of the Shop. They should also have the authority to make decisions about the Shop's operations.

This person, or another fully-trained manager, should be present at the Shop for the minimum hours specified by the company.

Furthermore, it's recommended that an owner provides on-site management. Managers must attend and successfully complete the company's Initial Training.

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