For the third time since 2004, when ex-Philadelphia firefighter Bob Tumolo cashed out on the Trevose-based water-ice and custard chain he named for his mother, Rita's has been purchased by private investors who hope to take the chain global.
Argosy Private Equity, a Wayne company that also owns industrial firms and Pizza Hut franchises down South, joined with MTN Capital of New York, which owns Revolution Dancewear, Sound Lounge, and Joliet Equipment, to buy what they call "a controlling stake" in Rita’s Franchise Company LLC from Falconhead Capital, also of New York.
"For years, I’ve been taking my kids to the Collegeville Rita’s after soccer, baseball, and hockey games. Not surprisingly, our diligence research discovered a large and loyal, sometimes fanatical, customer base who love Rita’s," Kirk Griswold, founding partner at Argosy, told me.
Griswold said his investor group targets companies "with strong growth potential" and veteran managers. He praised Rita's "passionate" franchisees and pledged to grow the chain "through new products and locations in the U.S. and internationally" while still making customers happy.
The buyers won't say what they paid for the chain, which has 600 stores in 30 states and outposts in four other countries.
Jeff Moody will stay on as Rita's chief executive. A former executive with the MetroMedia Restaurant Group (which owned the former Bennigan's, Steak & Ale, Ponderosa, and Bonanza chains), Moody also worked at PepsiCo Restaurants and Subway. Falconhead hired Moody to run Rita's in 2013 after the departure of Falconhead's earlier choice, physicist-turned-pizza chain exec John Fornaci.
Argosy's Griswold replaces former Pepsi and Falconhead executive Mike Lorelli as chairman of Rita's board.
Griswold praised Falconhead and Moody's team for taking Rita's national and testing foreign markets.
Falconhead bought Rita's in 2011, paying more than $30 million to McKnight Capital, owned by members of the Pittsburgh-based Rudolph family.
Rita's had 319 stores when the Rudolphs bought the chain in 2004, hoping to expand it to 1,000 locations. They had 550 stores in 21 states when they sold, complaining that the recession had made it tougher to find franchisees.
Falconhead expanded the chain in California and other Western states. Rita's calls itself the largest Italian ice chain in the world. The company dropped the Philadelphia term "water ice" from its name as it added custard and toppings and expanded into New York and other markets in the 2000s.
Argosy, founded in 1990, says it manages investments worth $600 million. MTN says it has invested a total of $500 million since 2003, in retail, consumer, and manufacturing firms.