Submit
Feedback

Rita’s Italian Ice: A Sweet Treat for Every Season 2022

Written by: Parth Parth
Last Updated by María Fernández Amato: November 10, 2022
Free Download Our Exclusive Food and Beverage Industry Guide
Download Now
rita's italian ice franchise cost

This article is based on its 2022 FDD. 

Rita’s Italian Ice, is a privately owned and operated American quick-service restaurant chain. Rita’s opened its first restaurant in 1984 in Bensalem, PA, where the chain is currently headquartered. As of 2022, the chain had 538 restaurants in 31 states, mostly located in the Mid-Atlantic.

Contents

How is Rita's Italian Ice Franchise Positioned in the Food and Beverage Industry?

The food industry has a significant share within regional economies and the U.S. economy. It employs human resources prominently and is a stable industry providing significant employment and labor income with around 13% of all U.S. manufacturing employment. The industry responds fast to the needs of the customers and has made significant innovations to satisfy the taste buds of the customers. The American consumer market figures over 320 million American consumers and has 5% of gross domestic product (GDP), 10% of total U.S. employment, and 10% of U.S. consumers’ disposable personal income (DPI). The sales of this market clock at around $1.4 trillion and around 10% of this figure is generated by the food and beverage industry alone. With the fast delivery systems in place and drone technology being initiated to deliver food the food and beverage industry shows signs of expansion.

The industry royalty is around 5.3%, marketing expenses are around 2.25%, the stability of units is expected to be over 75%, the growth rate of the industry is more than 15% and the average investment to establish a new unit is $466K.

rita's italian ice franchise cost

How Much is a Rita's Italian Ice Franchise?

The initial Rita’s Italian Ice Franchise Fee is $35,000. You have to pay this upfront fee when opening Rita’s Italian Ice franchise.

Rita's Italian Ice Franchise Cost

The estimated total investment necessary to begin the operation of Rita’s Italian Ice Franchise ranges from $278,194 – $502,040. The following costs are part of the upfront costs included in the initial investment for Rita’s Italian Ice. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy Rita’s Italian Ice franchise in 2022.

Standard Shop (Walk Up-Walk In- with Drive thru)

Type of expeditureAmountTo Whom Payment Is To Be Made
LowHigh
Initial Franchise Fee$35,000$35,000Us
Lease Deposit$0$6,750Landlord
Leasehold Improvements$103,000$240,731Suppliers
Equipment$89,744$144,213Us and/or Suppliers
Permits & Licenses$1,200$5,870Governmental Authorities
Signs & Awnings$5,500$17,989Suppliers
Insurance$200$3,000Insurance Carrier/Broker
Initial Order$8,000$17,500Us and/or Suppliers
Minimum New Shop Marketing Expenditure$12,000$12,000Us and/or Suppliers
Training$50$5,000Food and lodging providers
Architect and Attorney Fees$3,400$13,487Architect/Attorney
Additional Funds (3 months)$20,000$30,000Your Employees, Suppliers and Cedritors
TOTAL$278,194$502,040 

Rita's Italian Ice Franchise Requirements

A minimum liquidity of $100,000 and a net worth of at least $300,000 is required for a Rita’s location.

How much do Rita's Italian Ice Franchise Owners make?

TIERTOP TIERMIDDLE TIERBOTTOM TIER
Number of Shops in Tier161160161
Highest Gross Sales for Tier$ 992,642$ 318,476$ 235,130
Lowest Gross Sales for Tier$ 318,667$ 235,168$ 32,222
Average Gross Sales for Tier$ 414,972$ 276,219$ 177,769
Number of Shops in Tier that obtained or exceed Average Gross Sales for such Tier65 (40.4% of Top Tier and 13.5% of the Sample)78 (48.8% of Middle Tier and 16.2% of the Sample95 (59.6% of Bottom Tier and 19.9% of the Sample)
MEDIAN GROSS SALES FOR TIER$ 392,397$ 275,038$ 189,783

2021 Rita's Italian Ice Median Franchise Sales: $275,038

Initial investment (midpoint) %Profit margin of median franchise sales Estimated Profits Time to recoup investments
$390,117 10% $27,503 15 years
15% $41,255 9.5 years
20% $55,007 7 years

Based on the median sales provided by Rita’s Italian Ice’s franchise locations, at an average of a 15% profit margin it will take around 11 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

Many factors affect the sales, costs, and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other Food and Beverage stores; the extent of market penetration and brand awareness that Rita’s Italian Ice stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.

rita's italian ice franchise cost

Is the Franchise Profit Worth Rita's Italian Ice Franchise Cost?

To assign a valuation multiple for Rita’s Italian Ice franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $5 Million Net Sales

  • Estimated Selling Price = Net Sales * 0.55

When you go to sell Rita’s Italian Ice franchise based on the median multiple of .55 and net sales in 2021 of $275,038, it would sell for $151,270. This is significantly lower than the midpoint investment of $390,117.

The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

Conclusion

Rita’s Italian Ice offers people the opportunity to be a part of a business that has multiple models. In this article, we discussed the standalone shop. If you would like us to review other Rita’s concepts, get in touch with us!

While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Food and Beverage Industry.

Your Suscription has expired!

Looks like your subscription is due. Please renew to keep using our services.

Share link

Or

Downgrade subscription

You are going to downgrade your subscription.This action will proceed the difference in cost of plans and reset subscription period after moneyback.

Vetted Member $79/month

Simple Start Free

Upgrade subscription

You are going to upgrade your subscription.This action will proceed the difference in cost of plans and reset subscription period after moneyback.

Simple Start Free

Vetted Member $79/month

Cancel subscription

You’re about to cancel your subscription. Please confirm by clicking on the “Cancel Subscription” button below.

Performing this action will delete your account.

Plan Updated

Your current subscription plan is:

Vetted Member $79/month

Support Form

Please fill out the form below with any technical issues, questions or feedback you might have.

Sorry. You must be logged in to view this form.

close
close

Help us to bring you more value

close

Franchise Specialist Request

close

Franchise Form - Food and Beverage

Name
Untitled