Rita’s Italian Ice Franchise Costs: Estimated Initial Investment (Item 7, 2023 FDD)

All costs listed below are estimates only based on Rita’s shops developed in 2022. There is currently a global supply chain crisis which has impacted the ability to source many types of goods and impacted the cost of almost all goods and services. Rita’s is unable to forecast how the global supply chain crisis may impact the availability of goods and the cost of goods and services in the future when you commence developing the Shop.

1. Initial Franchise Fee: $35,000

2. Lease Deposit: $0 to $12,500

While you may own or purchase real estate in which to locate your Shop, Rita’s anticipates that you will most 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. Rita’s cannot estimate your costs if you were to purchase or construct a building for the Shop.

Standard Shops typically occupy approximately 600 to 1,000 square feet of commercial space. Standard Shops with Drive-Thru typically occupy 800 to 1,400 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 $3,500 monthly for 1,000 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: $103,000 to $321,000

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This category includes construction build-out costs, construction costs, and the cost of fixtures. The high end of the range is for a Standard Shop located in an in-line retail space or end-cap retail space with no or minor site work. The range covers walk-in and walk-up Shops.

This estimate does not cover (a) construction of a modular or stick-built building or (b) major site work for the building. Rita’s is unable to estimate the cost of a modular or stick-built building because it has extremely limited history with franchisees constructing modular or stick-built buildings and these costs vary widely depending on where the building will be constructed. Additionally, Rita’s is unable to estimate the costs in connection with a project that will require major site work for the building.

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: $89,744 to $144,986

This range reflects the cost of purchasing the standard equipment necessary to operate the Shop and incidental office equipment (including computer system). Standard operating equipment includes a minimum of 2 Rita’s proprietary Italian ice batch machines, 3 dipping boxes, 2 soft-serve machines, a 2-door upright refrigerator, a 2-door upright freezer, 1 POS system terminal, a work top refrigerator, and the digital menu board system.

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.

5. Permits and Licenses: $1,239 to $10,000

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

6. Signs and Awnings: $5,500 to $20,104

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.

7. Insurance: $200 to $3,920

Before you open the Shop, you must purchase and maintain, at your sole expense, the insurance coverage that Rita’s specifies. This will include commercial general liability insurance, property and casualty insurance, statutory workers’ compensation insurance, employer’s liability insurance, umbrella insurance, and product liability insurance.

8. Initial Order: $8,000 to $17,500

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 products, fruits, sugars, uniforms, paper goods, and other miscellaneous supplies.

9. Minimum New Shop Marketing Expenditure: $12,000

10. Training: $50 to $5,000

The figures for training include moderately priced lodging accommodations, food costs, and automobile mileage expenses for two persons attending Initial Training 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.

11. Architect and Attorney Fees: $3,500 to $12,685

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.

12. Additional Funds (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, you will need some 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.

13. Total: $278,333 to $624,695

The franchisor relied on the historical experience of its predecessors, its experience, and information received from franchisees in formulating these estimates.