Rita's at 25 accelerates growth.

Rita's Italian Ice, the nation's largest Italian ice concept with more than 550 stores in 18 states, is celebrating its 25h years in business with accelerated expansion. It has announced its first development agreement in New York City and the opening of its very first store in Texas. In an interview with Ice Cream Reporter, Jim Rudolph, Chairman and Chief Executive Officer of Rita's, cited the challenge presented by New York, because it is one of the few markets where competition already exists in the Italian ice category and consumers have a relation ship with those brands, which include Ices Queen and Marino's. Both are traditionally served from neighborhood pushcarts as well as scooped from tubs for sale in the hundreds of pizzerias in the city.

"Our New York City agreement is a significant and exciting milestone for the Rita's brand," said Rudolph. "We are honored to bring our Italian Ice concept to the Big Apple and can't wait to make a permanent footprint in a new market that is ripe with potential for further expansion."

The three-store agreement will result in new stores in the Upper West Side, Upper East Side, and Murray Hill neighborhoods of the city. Brothers Joshua and Noah Teitelbaum secured the opportunity to open Rita's first Manhattan locations. Having both attended the University of Pennsylvania in Philadelphia, where Rita's was born in 1984, the brothers were very familiar with Rita's signature product offerings.

"New Yorkers only think they know what Italian Ice is," said Josh Teitelbaum. "The Rita's experience is about to redefine and take the concept of Italian Ice to a whole new level for Manhattan residents and we can't wait to introduce the Big Apple to Rita's great-tasting cool treats."

Rita's first Texas store will be located in Bedford, in the northern suburbs of Dallas-Fort Worth. A second location is set to open in Flower Mound, Texas. Texas becomes the 18th state to join the Rita's franchise family.

"As the Rita's brand continues to grow, it's always a momentous occasion when the first store opens in a new state," said Rudolph. "We are honored to serve Texans beginning this spring and we look forward to expanding our footprint in the state with more stores in the years to come."

John Jakszta and his business partner are operators of the new Bedford location. Jakszta grew up in New Jersey, where the Rita's concept was a tradition throughout the state. "Upon relocating my family to Texas a few years ago, I realized a huge opportunity to bring some East Coast charm to the Lone Star state in the form of Rita's legendary promise of Ice, Custard and Happiness," said Jakszta. "The response since we opened has been phenomenal--from East Coast transplants happy to see Rita's in Texas, to the new customers that immediately fall in love with our product and experience."

Rita's launched in Philadelphia in 1984 and had i00 stores by 1996, then 400 by 2006 and 500 by 2007, leading up to 550 today. Original owner founder Bob Tumolo created the company as a side venture to his fulltime job as a fireman. He took it up to 300 stores before selling to current owner McKnight Capital Partners in 2005.

Rudolph praised Tumolo extensively, noting that there were at least a half dozen other water ice stores in Philadelphia when Rita's started out but all feel by the wayside except Rita's, a tribute to Tumolo's commitment. But Rudolph also said that, despite his success, Tumolo was risk-averse as an entrepreneur. After the acquisition, the company became much more aggressive, with an entirely different business model. "Everything changed except the product," noted Rudolph.

Among the biggest changes was that from a walk-up model to a walk-in model and going to year round service. A host of products were introduced, including cones, custard, gelatis and the signature Misto, Ritaccino and Blendini creations. New products include a line of ices cakes. Also new for 2009 is Rita's "Light Line" of healthier treats options that include an expanded selection of sugar-free Italian Ice flavors as well as Rita's signature Slenderita--a fat-free soft serve.

Rudolph pointed out that Rita's has almost no competition in the Italian water ice category. He told Ice Cream Reporter that Ralph's, a 40 unit chain that operates primarily on Long Island is the only one with which he is familiar. But, Rudolph noted that besides the store count figures, there is a significant difference between the two chains in that Ralph's uses a commissary to supply its stores while Rita's stores produce their products individually.

Rudolph told Ice Cream Reporter that the effort to expand was not without its challenges. He admits that it's difficult to explain Italian ices to new customers, especially since Italian ices have a tradition that is fairly limited to markets in the Northeast and in Florida where there are concentrations of retirees from the Northeast.

The hardest challenge, he said, is how to get people to take the risk of trying something new. Sampling is key. The company hands out free samples on the first day of spring, typically 1.2 million cups, or about 2,100 cups per store in the 10 hours that they are open that day. The sampling continues throughout the year. "Store owners and treat team members go out and hand out coupons for a free sample-no cost, no time limit," said Rudolph. "Once they've had a sample, this big smile comes on their face." He further noted that 25% of Rita's business is from repeat customers.

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