Today we’re joined by Katarina Railko, a leading expert in hospitality and franchise communications. With a keen eye honed in the travel and tourism sectors, she offers a unique perspective on what it takes for a brand to not just grow, but to thrive intelligently in today’s competitive market. We’ll be exploring the strategic moves behind Rita’s Italian Ice & Frozen Custard’s recent success, delving into their shift toward more efficient development, the undeniable power of their drive-thru model, and their targeted expansion into the Sunbelt. We’ll also touch on how the brand is leveraging corporate-owned stores to pave the way for franchisees and what it takes to be an ideal partner in this new phase of accelerated growth.
Your strategy in 2025 focused on “building smarter, not just bigger.” Can you detail the specific operational changes and market selection criteria that defined this approach, and how those tactics are now fueling your accelerated growth? Please provide a step-by-step example.
That shift in mindset is the absolute core of their current success. “Building smarter” meant they stopped chasing sheer numbers and started focusing on the quality and performance of each new location. It was a deliberate pivot. Instead of just planting a flag anywhere, they analyzed what was truly working. The first step was identifying their hero format—the drive-thru, which was outperforming other shops by over 30%. The next step was to incentivize it, creating programs that made building this superior model more attractive to franchisees. Finally, they zeroed in on markets like the Sunbelt where a frozen treat concept has a longer season and becomes a year-round habit. This created a powerful flywheel: the right format, in the right market, with the right incentives. That’s how you get a 10% year-over-year increase in U.S. openings and a pipeline poised for even more.
Drive-thru locations are showing over 30% higher performance than other shops. What specific factors, from customer convenience to operating season, are driving this success? Could you elaborate on how the new Drive-Thru Incentive Program is structured to help franchisees capitalize on this powerful model?
That 30% performance gap is a staggering figure, and it’s driven by a few key modern consumer behaviors. First is pure convenience, especially for their core family demographic. Imagine not having to unbuckle multiple kids just for a treat—it’s a game-changer for parents. This convenience also boosts throughput, allowing them to serve more customers faster during peak hours. Secondly, in colder climates, a drive-thru extends the operating season significantly. Customers are far more willing to grab a frozen custard from the warmth of their car in October than they are to walk up to a window. The brand recognized this and built the Drive-Thru Incentive Program to pour fuel on the fire. They’re essentially co-investing with franchisees, offering a substantial package of $50,000 to $60,000, which includes $40,000 in cash, $10,000 for equipment, and even a $10,000 “kicker” for breaking ground early. It’s a clear message: “We know this model wins, and we will help you build it.”
Your expansion is focused on the Sunbelt, using a corporate seeding strategy in places like Savannah and North Texas. Can you explain why this region is a priority and walk us through how operating corporate stores first paves the way for future multi-unit franchise operators?
The Sunbelt focus is a very logical move. You’re taking a product associated with warm weather and placing it in markets that offer longer operating seasons and stronger year-round demand. It simply maximizes the potential of every single location. But the corporate seeding strategy is where the real genius lies. By acquiring and running their own stores in a new market like Savannah, they are essentially creating a real-world laboratory. They’re not just testing the waters; they’re perfecting the entire local operational playbook on their own dime. This allows them to refine site selection criteria, build initial brand awareness, and fine-tune the supply chain before a single franchisee signs on. When they finally open the market to multi-unit operators, they aren’t selling a concept; they’re offering a proven, de-risked opportunity with a much higher probability of success from day one.
The plan to convert five second-generation drive-thru properties in North Texas is a significant initiative. What are the primary cost and speed advantages of this adaptive reuse strategy, and could you describe the step-by-step process for transforming these sites into successful Rita’s locations?
Adaptive reuse is one of the smartest tactics in the QSR space right now, and this North Texas initiative is a perfect example. The primary advantages are, without a doubt, speed to market and reduced initial investment. You’re not starting with a vacant plot of land, which involves lengthy zoning, permitting, and ground-up construction. Instead, you’re acquiring a property—likely a former fast-food restaurant—that already has the key infrastructure: the building shell, the parking lot, and most importantly, a functional drive-thru lane. The process involves gutting the interior to fit Rita’s specific workflow, installing their specialized equipment, and then giving the building a complete cosmetic facelift with their vibrant branding. This can shave months off the development timeline and significantly lower construction costs, allowing a franchisee to open their doors and start generating revenue much, much faster.
With an increase in multi-unit agreements, what specific qualities define the ideal franchise partner for your current growth phase? Can you share how your support system and new leadership are structured to help experienced operators scale their portfolios efficiently within your system?
The brand is clearly attracting a more sophisticated investor now. The ideal partner is no longer just someone with passion; it’s an experienced operator who understands the nuances of running multiple locations and is looking for a scalable platform. They likely have a background in the restaurant industry and possess the operational acumen and capital to develop several units. To support this level of franchisee, you have to upgrade your own corporate infrastructure, which is exactly what Rita’s did. Bringing in a chief development officer and a chief legal officer sends a strong signal. It means they now have the dedicated, high-level expertise to manage complex real estate deals, streamline development agreements, and provide the robust back-end support that a multi-unit owner requires to expand their portfolio efficiently and without getting tangled in red tape.
What is your forecast for the frozen dessert and QSR franchise sector over the next few years?
My forecast is that the brands that win will be the ones that master the art of operational efficiency and real estate flexibility. The product itself, while important, is becoming secondary to the convenience of the delivery model. We see it clearly here—a 30% performance lift from drive-thrus isn’t a minor trend; it’s a fundamental shift in consumer behavior that will continue to dictate success. Furthermore, I predict a rise in strategic corporate-led expansion, where franchisors invest their own capital to prove out a market before inviting franchisees in. This de-risking strategy will attract more sophisticated, well-capitalized multi-unit operators who are looking for a proven system, not a speculative venture. The era of just selling a name and a recipe is over; the future belongs to those who offer a meticulously engineered business model.
