Scalable Business Model
Rita’s has more than 600 locations and has been a thriving brand for over three decades. As entrepreneurs examine Rita’s and compare our business to other potential business opportunities, one of the biggest things that stands out is the ease with which franchisees can scale up operations.
Low costs and simple operations
While we offer a tremendous variety of flavors to customers, the menu items themselves consist almost entirely of Italian Ice, custard and blends of the two. There’s no cooking — which means no vent hoods to clean and no grease traps to manage. Because the ingredient list is short, there’s little inventory to manage and very little waste. Each of these factors reduces the complexity of the business for franchisees and their employees.
The ingredients for our menu items are inexpensive, so product costs are low. You typically only need minimum wage employees in the store in addition to a shift manager (or owner-operator), so labor costs are low.
The lack of cooking has another big benefit. Attracting great minimum wage employees isn’t always easy. Anyone who has ever worked in a fast food restaurant can attest to the unpleasantness of smelling like fry grease after your shift. Rita’s, by contrast, is clean. If you smell like anything at the end of your shift, it’ll probably be fresh mango. And frankly, that’s a win. Because we have a clean, colorful workplace and happy customers, Rita’s is a nice place to work. Franchisees often have a waiting list of enthusiastic kids eager to join the team.
A business opportunity that is easy to scale
There are multiple opportunities to make money as a Rita’s owner. First and foremost, storefronts provide a homebase for you and your customers. But your first storefront is just the beginning. While a lot of sales happen inside shops, the true revenue potential of the business is achieved by reaching into the community.
Part of the genius of the Rita’s business model is its scalability. Once your first location is established, your prep kitchen can — and should — reach far beyond the four walls of your shop. Vans, concession trailers and mobile carts allow you to take your product directly to customers, expanding sales and also introducing more people to your menu. This, in turn, helps drive more traffic to your storefront. Typically, franchisees will make the products at their flagship shop and use it to stock the mobile locations — ensuring quality and consistency while minimizing complexity.
By using mobile carts and other types of satellite units, it’s possible to drive significant additional sales while incurring minimal additional development costs. Costs vary widely depending on the type of satellite location you choose, but the wonderful thing is that you have a wealth of options.
The scalability of our Rita’s is especially nice for families who want to take advantage of the business opportunity to be closer. They can start the business working side-by-side, expand the opportunity by managing separate locations and eventually promote employees to managers and provide owner oversight of several shops. That’s the path many of our multi-unit operators have followed.
Seasonality makes it easier to scale
Many Rita’s franchises, especially in our core Northeastern markets, are open seasonally, closing down during the coldest months of the year. Our team helps franchisees determine whether they’re better off operating their shops during the warmer months and saving on labor costs, or if they can generate a better bottom line by staying open and generating revenue to cover off-season overhead costs.
Franchisees who close for the winter often use the off-season to plan for new locations. They get the maintenance and prep work out of the way so they can hit the ground running when customers swarm the shops in spring.
The Crave Effect
Absence really does make the heart grow fonder. Rita’s franchisees who operate in seasonal markets benefit from this effect in a big way. “Because it’s not accessible all year round, it’s something you look forward to and you know that when Rita’s opens, spring is coming, nice weather is coming, summer vacation is coming,” says Maureen Hartlieb, who owns multiple Rita’s locations in Maryland with her husband, Brian.