Rita's Water Ice chips away at growth

Rita's Water Ice chips away at growth
Tags: Coffee/Bakery/Donut, Food & Beverage, Franchising & Growth, Operations Management
December 16, 2007

With the opening of a store in Mooresville, N.C., Rita's Water Ice has carried its mission of "Ice, Custard and Happiness" to 500 locations in the United States.

"It's what we sell," said Jim Rudolph, Rita's CEO and chairman of the board. "We sell happiness."

Since Rudolph took the reins of the Trevose, Pa.-based company in 2005, the company has opened about 190 stores, with increasing growth each year. Thirty-three stores were added in 2005, 66 opened in 2006 and 2007 is on track to see a total of 100 openings.

Rita's — which began on the front porch of a Philadelphia home in 1984 — has extended beyond a regional presence, now found in 16 states stretching from Massachusetts to Florida.

In addition to growth, the chain is undergoing some fundamental changes. In the past, Rudolph said, the concept had walk-up locations open seven months a year. Now, about 20 percent of the stores offer year-round inside service, with most new stores to follow that trend.

Another change Rudolph has initiated is giving partners — the name the company gives to franchisees — product to give away for a grand opening.

"It's about a partnership," he said. "I want to make sure that they do what we're suggesting."

Partners also are given product to give away to customers on the first day of spring — a tradition Rita's has upheld for about 20 years, Rudolph said. Last year, the chain doled out more than 1 million cups of ice in nine hours in about 400 stores.

"You have to see it to believe it," Rudolph said. "The average store gave away more than 2,000 cups of ice. It's beyond amazing. People are lined up all day."

The reason behind those lines is the product. The chain sells a variety of treats based on its namesake water ice — known outside Philadelphia as Italian ice — and frozen custard. Other offerings, such as Misto and Blendini, combine or add to the core products to create new tastes.

Rita's Water Ice CEO Jim Rudolph.

"There's nothing that really compares to Rita's product at all," said Lisa Feldman, who has owned a franchise in Perkasie, Pa., for three years with her husband, Michael. "People try to compare it to sno-cones or slurpies or slushies, but there's really nothing like it. What makes it so good is the quality, the freshness of it, because we make it every day in our stores, and the ingredients that we put in it. It's just exceptional."

"There's nothing in the world like tasting Mango Water Ice that's just come out of the machine," Michael Feldman added. "We've never ever met anyone that has taken one mouthful of our water ice and said, 'This isn't good,' or, 'Ew, I don't like that,' even if it's a flavor they don't care for."

Plans for continued expansion are in the works. Rudolph hopes to have 1,000 Rita's locations by 2010.

The Feldmans attribute the success at Rita's to corporate support.

"We can pick up the phone and call anyone whenever we need help, and someone will answer that phone and help us right away," Lisa Feldman said.

The same goes for calling Rudolph on his direct line. Even if he's busy, he'll call back, Michael Feldman said. "In the retail industry or in the corporate world, you just don't find that from a CEO.

"That's one of the reasons that we are so committed, because the commitment is there on the part of the man that pays the bills."