Traditional Favorite Changes With The Times

AN INTERVIEW WITH: Ritter's Frozen Custard

The first time John Ritter tasted fresh ice cream at age 10, he knew that he would one day own an ice cream shop. Today, Ritter has "tasted" true success, turning his childhood dreams into a reality with a homemade ice cream franchise that is quickly becoming a national craze.

As a young boy working an after school job at an ice cream shop in Chicago, Ritter¹s favorite perk was getting to taste the ice cream just out of the machine before it had been packed and frozen solid. Upon first taste, Ritter believed that if he could somehow get that unique, fresh flavor to the public, they would never want to buy ice cream from a grocery store again.

Franchise The memory of this sweet, creamy taste followed Ritter into the Navy and through a 32- year career in film animation. It wasn't until he retired in the late 1980s that Ritter¹s childhood dream of bringing the one-of-a-kind taste of homemade ice cream to the public came true.

"As I was nearing my retirement, one of my sons reminded me that every time we would visit an ice cream shop, I would talk about wanting to own one someday," Ritter said. "This was the perfect opportunity, but I knew that if I was going to do this I was going to do it right."

So, Ritter and his wife Bonny spent months traveling around the country sampling ice cream and perfecting their own recipe to recreate the "fresh-made" taste that fills Ritter's childhood memories. They developed their own recipe for a type of ice cream known as frozen custard, which combines high-quality dairy ingredients and a small amount of [pasteurized] eggs. "It isn't just about a great recipe," says John Ritter, "It's also about a premium ice cream that's made fresh, continually throughout the day, and made with a lot less air than regular ice cream." John and Bonny opened the doors to their first Ritter's Frozen Custard Shoppe in Franklin, Indiana in 1990. By 1995, business at the original Ritter's Frozen Custard shoppe was growing like gangbusters, and founders John and Bonny Ritter decided the time had come to franchise their concept.

Ritter hired Saul Lemke, an experienced franchise consultant, to do a feasibility study to determine if the Ritter's concept was a viable franchise opportunity. Lemke, who lived about 50 miles north of the Franklin store and wasn't familiar with the product, went down to find out what the place was all about.

"I was shocked at its success," he says now. "They were experiencing a 30 percent increase in sales every year. That's unheard of; it's huge. I saw the enormous popularity, I tasted it, and it was 'oh, wow,' and we decided, yes, this concept could definitely be duplicated." According to Lemke, people were standing in line, up to 30 minutes, to order their custard from one of the two walk-up windows. "It reminded me of 'the way it used to be'", said Lemke.

Franchise Lemke remembers what John Ritter had said to him about the reasons he and his wife Bonny focused so much on family appeal: "Today, people don't even talk to their kids. I don't want a drive-through window. I want people to stand in line, talk to their kids, talk to the other people in line."

Lemke says John Ritter's way of doing business was right for him. Over the next several months, Lemke's firm developed a franchise program and Ritter's Frozen Custard got into the franchising business.

Over the next five years, Ritter sold about 18 franchises and he and Lemke became good friends. By 2000, however, Lemke says, Ritter realized that his ever-growing business was getting too stressful for him. He was close to 70, and, Lemke says, "franchising is very, very tough. This growing business was not his forte, and he realized it had gone way beyond the Mom and Pop stage. If it was going further, he knew he needed someone with more franchise experience."

In January 2001, Lemke became Ritter's Chief Executive Officer, and the business of franchising took front burner. He brought in David Ponce, whose 15-year career had focused on franchise organizations, first in advertising agency work and then as a creative consultant. Next, Lemke hired Ken Rowland, with 14 years experience in franchised ice cream concepts, including 11 years with TCBY. Ponce became Vice President of Marketing and Rowland, Vice President of Operations. Bob Ritter, John and Bonny's youngest son, who had been involved with Ritter¹s almost since day one, is now Director of Franchise Sales.

In the franchising business, it's always critical to maintain the personality of the original concept, Lemke says, and "in the case of Ritter¹s there is a very distinct personality culture. It is squeaky clean, producing a super quality product in a super clean, super friendly, super wholesome environment. John restricted his hiring to people who shared his values. He had strict policies about no piercings that you could see, no visible tattoos, and he wanted the parents involved. He always made sure that the kids got time off when they needed to study for school.

"I can't replicate what they did in Franklin, where they knew all the families, went to customers¹ weddings and funerals, knew everything that was going on...but we select franchisees who buy into the whole culture," Lemke says. Franchisees must qualify financially, he says, and they also have to embrace the Ritter's culture, understanding that they're going to be part of the community, he says. The emphasis on community seems to be paying off. As of 2003, Ritter's has 42 shoppes open. The 42 Ritter's shoppes are located in Indiana, Kentucky, Michigan, Ohio, Texas, Tennessee and Florida. Twelve more shoppes are scheduled to open during 2003. An additional 70 units are under contract. Negotiations are underway to open Ritter's on riverboats and in Las Vegas. A major push is underway to increase the presence in Florida, perhaps to 100 shoppes. "Florida is a great market for us because it's year round," Lemke says.

Necessary Changes

Although Lemke and his team remain sympathetic to Ritter's vision of people getting to know each other as they wait in line, convenience and speed of service are more important than ever to most Americans. "I contended that we were excluding important segments of the population because a lot of people are not going to stand in line for 30 or 40 minutes," he says. "We have nice patios and we have nice walk-up windows, but without inside seating and a drive-through, we were not really offering everyone the "Ritter's Experience."

In addition to the need for increased customer convenience, Ritter's VP of Marketing David Ponce contends, Ritter's shoppes also needed to deal with the unpredictability of the weather. "We tapped into two National Weather Service tracking stations that were close to two of our stores, and used their data to conduct a weather analysis. We found that our "seasonal" shoppes, who everyone thought of as being open for 9 months or so each year, were really only open about 7 and a half months." "Here's why:" said Ponce, "when we factored-in days from March 1st until November 15th during which there was rain, snow or temperatures above 90 degrees, our outdoor-only shoppes were impacted on 26% of the days in their season."

Franchise Armed with such evidence and with growing consumer demand, the Ritter's management team reached the somewhat weighty decision to redesign the prototype building, and to offer a new facility with walk-up window service, a patio, a drive-through and a dining room. They began interviewing retail design firms, and, in October of 2001, hired Seattle-based The Retail Group, Inc., a company with experience designing retail space for Starbuck's, McDonald's, Sears, Radio Shack, and many others.

In June of 2002, the first new Ritter's prototype opened in a blue-collar area on the East Side of Indianapolis. Within a month, all the concerns about changing the prototype building had evaporated. "It was wild," Lemke says. "The redesign of the building enabled us to serve more people, more quickly than ever before--without compromising product quality or service. During their third week, we served over 18,000 guests. No burgers or fries; no hot dogs or onion rings, just ice cream treats. It¹s very exciting." Thus far, six of the new freestanding prototypes are open. Based on the new prototype's success, there will be no more seasonal, outside-only Ritter's buildings, Lemke says.

Move Into Strip Centers

Within weeks of working through the redesign of the freestanding prototype, the Ritter's team set its sights on a strip center offering. "Most ice-cream-only chains build strip center locations, Lemke says. "We knew that we had to address the growing demand for a more streamlined business model that would appeal to a larger number of potential franchisees."

Incorporating many of the design elements from the new prototype freestanding building, Ritter's developed a strip center program, and has since opened its first "built from scratch" strip location in Hendersonville [Nashville], Tennessee.

Ray Scher and William Roberts, the Hendersonville shoppe's franchise owners, are excited and pleased by the great opening response. "We chose this area because of the great people and the exciting growth we're seeing in Nashville. We believe it has the potential to build a great loyal following of Ritter's Frozen Custard fans."

Ritter's Director of Franchise Sales Bob Ritter says the strip center offering has caused a veritable flood of inquiries from people who loved the Ritter's concept but couldn't handle the up-front investment of a freestanding unit. "We're seeing a quadrupling of the potential base of future franchisees," says Ritter, "now there's a Ritter's franchise opportunity for almost anyone who has the capital resources to open any other type of franchise."

Despite all the recent changes, good friends John Ritter and Saul Lemke know "what pays the bills." It's that combination of a singularly sensational ice cream product, blended with a pristine shoppe environment and enthusiastic, friendly service. "The round, blue-roofed building with two walk-up windows that John and Bonny built in Franklin is still there, standing as a testament to what is possible in the treat business," says Lemke. "We aren't replicating the building anymore, but we are committed heart and soul to replicating the product, the environment, the family-focused feel of a relaxed summer afternoon."

Franchise "John created something very unique," Lemke says. "The love of his frozen custard is almost a religion. What we're doing is putting this wonderful product into the hands and hearts of as many people as possible."