For Rita’s developer, ice is nice
Eli Ailloni, 12, strolled into the Rita’s Café in Bloomington, Minnesota, stowed his backpack, and after parking himself, headphones on head, at a table by the window, tucked into an Italian ice topped with custard that was on the house.
If it looks like Eli thinks he owns the place, he just might—in a couple of decades if his parents, Adam and Angela Ailloni, ever decide to sell to the second generation.
Franchising is family friendly in a number of ways, but the child whose parents own a treat business has a sweeter deal than offspring who have to spend their after-school hours in, say, a tax-preparation franchise.
Providing their son with a fun place to hang out after school isn’t the only reason the Aillonis decided to get involved as area developers for the state of Minnesota with Rita’s Italian Ice. “It makes sense to build a parallel income stream to a corporate job through franchising,” Angela says. And if that sounds like corporate-speak, that’s because Angela has an MBA from Cornell.
Angela Ailloni, above, operates a Rita’s Cafe in Bloomington, Minnesota, with her husband, Adam, and is one of the first to test the new format.
Escaping the carnage
Angela, an R&D portfolio manager, handles operations, while Adam, whose background is in brand management, tackles the marketing, as well as “other duties that may be assigned.” The reason Adam jumped ship first is that he had a front row seat to the “carnage” from the numerous rounds of layoffs by the large companies he worked for. He always survived the cuts, he says, but sooner or later he knew his number would come up. And the couple decided to be proactive.
“We made the decision for her to stay at Nestle, while we built this,” Adam, who was working at Target at the time, explains. They ran the numbers and decided it would take a three-to-five unit deal to replace both their corporate salaries. They went the extra step, however, and signed on to be area developers with an agreement for 20 Rita’s by 2020. Included in that number is a Rita’s Café test concept in Bloomington.
Making the transition from corporate to family business won’t be new, the Aillonis agree, because both grew up in family businesses. Plus the franchise decision is easier when a couple goes into business together and can keep one corporate paycheck coming in while the business grows.
“This is fun,” Angela says about Rita’s. “I’m not saying it’s easy, it’s not without stress. (But) you’re making people happy.”
It’s Adam’s brand expertise—along with the fact the two of them grew up on the East Coast and have been lifelong Rita’s fans—that convinced them to go with Rita’s. A well-known entity on the East Coast, Rita’s is what Adam calls a “heritage brand”—one where the traditions around going there are passed down to other generations. That memory-making experience was a match to Minnesota’s values, the couple says, along with the “I gotta have…” addiction. There are a lot of displaced Easterners in the Midwest.
The couple learned first hand just how addicting Rita’s can be. While the company has more than 65 flavors, most freezer chests can only serve a handful of flavors at a time. Which is why it isn’t strange when people call ahead to ask what flavors are currently being scooped.
Angela tells of one customer who drove two hours from Wisconsin to buy a large cherry ice. “He ate it and drove home,” she says with a laugh. To avoid disappointing fans, they developed a flavor-request form, and in a pinch, they can accommodate a serious “Jones” by whipping up a small batch of the desired flavor. While cherry is big, mango is the No. 1 seller.
All that brand loyalty, however, doesn’t come without a price. “It’s a double-edged sword,” Adam says. “People think they own a piece of us.” And with that “ownership” tends to come brutally honest feedback. It’s like having season ticket holders, he says, and every day is game day.
But it also translates into sales. For the grand opening of their café, people started lining up at 4:15 in the morning to be one of the first 50 to win a free Italian ice every week for a year.
There are only five cafés in the testing phase right now and the Aillonis have one of them. The café differs from a regular Rita’s in a number of ways. First, it’s a permanent location, as opposed to seasonal. And second, in addition to the ices, custard and blended drinks, they sell coffee and cake donuts to bring in early morning traffic. The donuts are made in small batches in the front of the store and glazed and decorated as they’re ordered, allowing the customer to customize.
The store is kosher, a nod to its East Coast roots, Angela says, but also because the Twin Cities has a large Somali population. Complying with kosher or Halal rules requires extra steps, as does sourcing. “Try finding kosher gummy bears,” Angela exclaims.
The Aillonis are doing a subtest of the café test, by partnering with a local coffee franchise, Dunn Bros. “Our corporate backgrounds taught us the power of brands,” Angela points out. Adding coffee extends their range of blended drinks by pairing their custard with coffee.
Their subtest is almost a cobranding situation, says Jeff Moody, Rita’s CEO, because Dunn Bros. is a strong brand on its own. Whether the branded coffee program is limited to just Minnesota hasn’t been decided as yet, Moody says.
While who to partner with on the coffee was an easy decision, finding a location for the café proved to be challenging because landlords lumped them in with the fro-yo concepts that tend to have high turnover, Angela says. They were fortunate to have a personal connection with a landlord who saw the value in adding a Rita’s to the center’s mix of retail brands, she adds.
The couple opened its first regular unit in Eagan in 2014, and have open two traditional locations, a seasonal location at Valleyfair amusement park and a mobile/catering agreement. They have six signed agreements with other operators and a commitment for 17 opened units and 21 signed agreements by 2019.
Family-run businesses have proven to be a successful model for Rita’s, Moody says. It was important in the early days of Rita’s to have couples involved, because franchisees were often retirees who wanted a seasonal business. If they didn’t employ their own kids or grandkids, they knew which personable, hard-working teens in their communities to target for jobs.
And who knows, that same targeted teen in Minnesota may someday be none other than Eli Ailloni.
The marketing case of the left-behind stuffed animal
The Aillonis turned a minor irritation into a Facebook campaign that garnered 60,000 views and ended up on the local news.
A child left a well-worn stuffed animal at the cash register. Knowing it was someone’s beloved toy, the Aillonis posted a picture of it on the store’s Facebook page saying the toy was having a sleepover but was ready to go home. When the owner didn’t return, they came up with adventures for the animal they named “Lovey,” and it went viral.
Hard to measure the exact effect it had on sales, but since every brand is looking for nonself-serving content to post, this had the right mix of public service and fun.