Rita’s Water Ice Franchise Company Braces To Freeze Competition

Rita’s to `Chip Away’ at U.S. Frozen Desert Market With Franchise Expansion

BENSALEM, PENNSYLVANIA (Tuesday, November 08, 2005) - Thirsty entrepreneurs around the country are watering at the mouth following the acquisition of Rita’s Water Ice Franchise Company and the new owners’ announcement to expand the 342-unit frozen desert chain through aggressive franchise expansion.

Rita’s, the nation’s largest Italian ice franchise that has enjoyed a cult like following for 21 years on the East Coast, announced earlier this year that it was purchased by McKnight Capital Partners of Pittsburgh, led by President & CEO Jim Rudolph and his brother, Bill Rudolph. The Rudolph brothers are best known for developing Wendy’s of Greater Pittsburgh and several retail affiliates into a 47-store organization, with nearly $70 million in annual revenues, before selling to Wendy’s International in 1995. With more than 50 years of experience building businesses, the Rudolph brothers have also owned and operated several additional franchise concepts, including Chuck E. Cheese and Baskin Robbins.

Rudolph has a solid strategic plan to put Rita’s on the nation’s frozen dessert menu, aiming to open 100 new Rita’s locations in 2005 and 250 locations in 2006 and a total of 1,500 by 2010. Target areas for continued aggressive growth include Ohio, Connecticut, New York, Virginia and Western Pennsylvania.

“Rita’s offers entrepreneurs an incredible opportunity to get in on a franchise that has the backing of a solid company infrastructure, a two-decade loyal customer following, distinct product offerings and exceptional support from the top,” Rudolph said. “The East Coast has been in love with Rita’s for years, and we have lines down the block to prove it. Now it’s time to spread the joy. Neighborhoods around the country are ripe for Rita’s franchise expansion, and we have what we need in place to make that happen.”

As the only franchise focused exclusively on Italian ice, Rita’s features products available in more than 30 flavors that set the franchise apart in the frozen desert niche, attracting lines of fans stretching from the serving window during the seasonal operation months of March-September/October. The famous Rita’s Italian ice is made fresh daily on-site from a custom blend of ice and fresh fruit, resulting in a consistency smoother than a snow cone or shaved ice. Rita’s also offers traditional Old Fashion Frozen Custard; Gelati made of layers of Italian ice and frozen custard; Misto shakes, created from a blend of Italian ice and creamy custard and Cream Ices which are smoother than Italian ice, but not as heavy as ice cream. All Rita’s Italian ice flavors are made on-site and served within 36 hours of preparation.

“We were immediately impressed with the company’s family-focused business philosophy and mission to provide the highest quality, reasonably priced product in the frozen dessert industry,” Rudolph added. “With our experience in franchising, commercial real estate, construction and marketing, we see a golden opportunity to bring Rita’s to an even wider nationwide customer and owner base.”

A Cool Opportunity

To facilitate greater flexibility for franchisees seeking to chip away at the frozen dessert market share in different geographic regions, the company has started to offer walk-in service locations to franchisees in selected areas, versus the traditional walk-up service window model. In fact, two walk-in locations recently opened in Philadelphia and New Jersey. Rudolph says the company seeks to sign single or multi-unit franchise deals.

Rita’s requires franchisees to be hands-on operators of each location. Prior food service experience isn’t required.

“We want franchisees driven to succeed with our established brand, then we give them all the tools they need to make that happen,” Rudolph said.

New franchisees invest between $161,900 and $337,500 to own and fit out a Rita’s franchise, including a one-time franchise fee of $27,500. Ongoing royalty and advertising fees amount to a total of 9 percent of gross sales. Typical Rita’s franchise stores range in size from 600 to 1000 square feet and are end-caps, walk-up locations, strip centers, downtown, boardwalk, mall as well as transportation center locations. With criteria extended for expansion, location sizes can be expanded and most franchises will maintain the Rita’s established red and white striped awning branding and logo.

Rita’s franchisees also take part in an extensive training program which includes six days at the corporate training center covering all facets of Rita’s franchise operation including hiring and training, inventory, production, marketing, internal accounting procedures and customer service and on-site opening support.

About Rita’s

Rita’s was founded in 1984 by former Philadelphia firefighter Bob Tumolo. Tumolo and his brother, John, began franchising the concept in 1989. Today, Rita’s, now owned and operated by McKnight Capital Partners of Pittsburgh, thrives with 342 locations in 11 states and the company projects to have 1,500 locations open through franchise expansion by 2010.

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