For our Top CEOs in Franchising feature in the November/December issue, we identified notable leaders who are guiding their brands through periods of growth, change and, of course, challenges.
Linda Chadwick, who joined Rita’s as CEO in 2017, says the Italian ice and custard brand needed a cultural reset in order to focus more intently on improving unit-level economics for its franchisees.
Linda Chadwick’s career has been anything but linear.
While she spent 20 years at Burger King, her varied roles during that tenure prepared her for chief executive posts, first at hair salon franchise Fantastic Sams, then its parent company, Dessange International, and now Rita’s Italian Ice, where she’s been CEO since 2017.
“Somebody would say, ‘Do you want that area? They’re the toughest franchisees,’” said Chadwick of her six-year stint as a franchise business leader moving around to different Burger King markets. “I’d say, ‘Sure, I’ll take it.’ And that was really how I grew, really showing that, yeah, I’ll do it.”
That “I’ll do it” mindset was instrumental in Chadwick’s rise through Burger King, where she was one of the few female restaurant managers in the early ‘90s before winding her way through the company and spending her final three years as vice president of franchise operations for the southeast division.
“You gotta be able to dig in,” she said simply when asked about her leadership philosophy. “Everybody has to do the work, right? So, you gotta be able to roll up your sleeves and dig in.”
Translating that approach to action is delivering results at Rita’s, as the Italian ice and gelati concept is once again pushing new store development and seeing its average unit volume rise.
Based in Trevose, Pennsylvania, and most well known in the Northeast, Rita’s at its largest had 624 locations in 2015. By the end of 2017, the year Chadwick joined, its unit count was down to 590 and slipped further, to 532, to finish 2020 as franchisees closed their doors.
“It’s a nostalgic brand. It’s iconic, and it needs some TLC,” said Chadwick of her assessment of the system back then. “It wasn’t all peaches and cream.”
A focus squarely on driving unit-level economics guided Chadwick’s approach, and to achieve that meant a cultural reset for the franchisor, accountability at the store level and investments in technology to grow sales. To Chadwick, it starts with how you show up.
“What we started to change was, how do you show up for the role that you’re in?” she said of the shift at the corporate level. “How you show up for the franchisees, how you’re going to offer support to franchisees.”
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The introduction of 34 fundamentals to live by—examples include, “Be curious” and “Do the right thing, always”—resonated at the leadership level and “dramatically” changed the culture at Rita’s, said Chadwick. Intertwined with that shift was a push to enhance store performance, prioritize same-store sales growth, develop new units and deploy resources responsibly. The introduction of zero-based budgeting, or justification of all expenses for a new year starting from zero, was consequential, she noted.
“Basically, you treat the company money like your own money,” said Chadwick, and it’s one more way she sought to make clear her expectation that decisions are made with franchisees in mind.
Practical changes, such as the implementation of a standardized point-of-sale system and kitchen display system followed, as did the launch of a mobile app and embracement of digital ordering channels, including third-party delivery.
“I will honestly tell you I was a little bit of a naysayer,” said Chadwick, who questioned the opportunity in digital for a frozen treat concept. But, “it’s continued to grow year over year, and I think this year it has grown 25 percent over last year.”
Flavor innovation is vital for a brand that’s seen as a special occasion destination, and it’s something Rita’s has leaned into more heavily in recent years. The rollout of toppings and flavors in partnership with brands such as Sour Patch Kids, Kool-Aid and Nerds helped drive traffic, said Chadwick, as has the introduction of a frozen coffee line. Italian ice, gelati and custard still account for the bulk of the sales mix—70.6 percent—with frozen beverages last year accounting for just 1.3 percent of menu item sales.
On the development front, Rita’s is pushing drive-thrus for its new stores, now with nearly 50 drive-thu locations in the system. “I’m very familiar with drive-thru since I cut my teeth on it,” said Chadwick, but when she arrived Rita’s didn’t have a fully developed operations playbook and prototype for drive-thus. Now it does.
“And now we have franchisees that say, you know what, I was a naysayer, but this is amazing, and I’ll never build another shop unless it’s with the drive-thru,” she said.
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Systemwide sales in 2023 were up 15.5 percent, to $182 million, and Rita’s finished the year with 559 locations. The store count today, said Chadwick, is 577 and the brand is working to expand outside its core markets of Maryland, New Jersey and Pennsylvania.
The AUV growth, meanwhile, is validating the adjustments made in recent years, Chadwick said. Average gross sales for shops in the middle tier were $326,701 in 2023, and $511,673 for top-tier shops. For those tiers in 2017, the AUV was $210,205 and $321,972, respectively.
“Our AUV is continuing to grow,” she said, “and that makes me happy, but it makes franchisees happy because it makes them successful.”