N.Y. firm buys controlling interest in Trevose-based Rita's Water Ice

By Joseph N. DiStefano, Inquirer Staff Writer
Posted: December 02, 2011

Investor David Moross' Falconhead Capital L.L.C., of New York, says it has bought a controlling interest in Trevose-based Rita's Water Ice Franchise Co. for more than $30 million from Pittsburgh's Rudolph family, which had owned the chain since 2005.

The chain has 550 stores from Manhattan to Arizona, up from 319 concentrated in the Philadelphia area and the Jersey Shore six years ago.

"Rita's has been obviously a very successful, high-growth, super-regional brand, [but] it's become a lot more difficult" for small store operators to raise money for expansion, said Falconhead partner Thomas Christopoul, Rita's new chairman and acting CEO.

The Rudolphs, who do business as McKnight Capital Partners, had hoped to expand the chain beyond 1,000 larger, year-round stores, but growth stalled in the recession as would-be store operators found it tough to borrow the money they needed to get started.

Christopoul said he wanted to expand Rita's to China, Puerto Rico, and other markets while adding more stores in its Mid-Atlantic core, possibly by helping franchisers get cheap, government-guaranteed loans from the federal Small Business Administration. He previously worked for buyout and franchising mogul Henry Silverman at the former Cendant Corp. Falconhead also owns Javo, a coffee retailer, among other businesses.

Jim Rudolph, who moved to Philadelphia to run Rita's for his family, will stay on as vice chairman. Founder Bob Tumolo, the Northeast Philadelphia firefighter who started the chain in 1984.

Contact staff writer Joseph N. DiStefano at 215-854-5194 or JoeD@phillynews.com.

 

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