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Franchise Costs: Detailed Estimates of Rita’s Italian Ice Franchise Costs (2015 FDD)

by Franchise Chatter on December 18, 2014

in Franchise Costs, Frozen Dessert Franchise

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Rita's Italian Ice Photo by infinitesmilesx

This post was updated on March 16, 2016 to reflect information from Rita’s Italian Ice’s 2015 FDD (Item 7).

Detailed Estimates of Rita’s Italian Ice Franchise Costs Based on Item 7 (Estimated Initial Investment) of Rita’s Italian Ice’s 2015 Franchise Disclosure Document

For a Rita’s Standard Shop

1.  Initial Franchise Fee:  $0 to $30,000

2.  Lease Deposit:  $1,000 to $15,000

  • While you may own or purchase real estate in which to locate your Shop, Rita’s anticipates that you will more likely lease a location for the Shop in a shopping center or elsewhere. These figures are based on Rita’s estimate of the cost of your lease or sublease for the leasehold premises.
  • Shops typically occupy approximately 700 to 1,500 square feet of commercial space.
  • These figures reflect an estimate for a one-month security deposit and the first month’s rent. Rita’s estimates that rental will range between $1,000 and $5,000 monthly for 1,200 square feet of commercial space.
  • In addition, some landlords may require additional security deposits or rental payments upon signing a lease. Many locations, such as malls and shopping centers, require the tenant to pay charges in addition to rent, such as real estate taxes, percentage rental, utilities, maintenance, and insurance. Such additional charges would increase your rental costs.

3.  Leasehold Improvements:  $60,000 to $160,000

  • This category includes construction build-out costs, construction costs, and the cost of fixtures. The high end of the range for a Standard Shop includes site work that may be required for certain undeveloped sites, such as building a retaining basin, pavement of the site, tree removal, and re-grading of the site.
  • These amounts reflect your cost if you purchase fixtures from or through approved contractors.
  • Your actual cost for improving real estate may exceed the estimates contained in the charts.

4.  Equipment:  $35,000 to $105,000

  • This range reflects the cost of purchasing the basic equipment necessary to operate your Shop and incidental office equipment. The low end of this range reflects the cost of purchasing used equipment. The high end of this range reflects purchasing 2 POS system terminals instead of 2 cash registers.
  • If you elect to finance or lease these items, you will incur a monthly lease expense in lieu of the expenses for the purchase of the items. Rita’s estimates that monthly financing cost will range between $1,100 and $1,300.

5.  Computer:  $900

  • This estimate includes the costs of purchasing the computer hardware and software required by the Franchise Agreements.

6.  Permits and Licenses:  $100 to $1,800

  • These figures include the estimated cost of building and zoning permits, and business operating licenses.

7.  Signs and Awnings:  $5,000 to $20,000

  • These figures reflect the estimated cost of the signage required under Rita’s standards, specifications, and requirements. The estimates given include exterior and interior artworks and graphics.

8.  Prepaid Insurance Premium:  $1,500

  • Before you open the Shop, you must purchase and maintain, at your sole expense, the insurance coverage that Rita’s specifies. This will include comprehensive general liability insurance, property and casualty insurance, statutory workers’ compensation insurance, employer’s liability insurance, and product liability insurance.
  • Rita’s estimates the annual insurance premium to be $1,500.

9.  Initial Order:  $8,000 to $13,000

  • Under the terms of the Franchise Agreement, you must stock the Shop with the initial order of products, accessories, inventory, and supplies prescribed by Rita’s. These figures reflect the base cost of the proprietary mixes, fruits, sugars, uniforms, paper goods, and miscellaneous supplies.

10.  Grand Opening Advertising:  $0 to $20,000

11.  Training:  $500 to $5,000

  • The figures for training include moderately priced lodging accommodations, food costs, and automobile mileage expenses for two persons attending Rita’s standard initial training program for franchisees and managers for 9 days. If you reside in the Philadelphia metropolitan area and commute to training, your training costs are likely to be less.

12.  Architect and Attorney Fees:  $8,500 to $12,000

  • You may be required to hire an architect and/or have an attorney represent you at local township zoning hearings for building approvals or permits. These figures are Rita’s estimates of your architect’s and attorney’s fees if zoning hearings are required by your locality.

13.  Working Capital (3 months):  $20,000 to $30,000

  • Rita’s estimates that before opening the Shop and for a period of three months after the opening of your Shop, you will need approximately $20,000 to $30,000 in additional funds. These estimates include rent and utilities for the second and third months of operation, employees’ salaries for three months, and other miscellaneous expenses.

14.  Total:  $140,500 to $414,200

  • Rita’s relied upon its historical experience and upon the experience of its predecessor’s former affiliates, and information received from franchisees in formulating these estimates.

For a Rita’s Express Unit

  • The total estimated initial investment necessary to begin operation of a Rita’s Express Unit ranges from $100,500 to $319,700.

For a Rita’s Fixed Location Satellite Unit

  • The total estimated initial investment necessary to begin operation of a Rita’s Fixed Location Satellite Unit ranges from $107,400 to $289,600.

For a Rita’s Mobile Satellite Unit

  • The total estimated initial investment necessary to begin operation of a Rita’s Mobile Satellite Unit ranges from $20,900 to $155,300.


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