By Jane Armstrong
Darrell Cook spent most of his life living the military life. As the child of an Air Force veteran and 20 years of his own service in the Navy, he was used to moving around. When the time came to retire in 2003, he and his family returned to his wife’s native Iowa to put down roots.
The entrepreneurial bug didn’t hit immediately. Cook first spent 10 years managing a battery plant with over 800 employees. Spending most of his time focusing on personnel issues led him to research small business opportunities with a small number of employees. He took his time investigating small business options, including purchasing an existing business, before identifying franchising as an ideal fit for his personality and interests.
The concept for Rita’s started on a front porch in Philadelphia where Italian ice or water ice made with real fruit is considered a food group. A fateful trip to the East Coast led to Cook’s first Rita’s Italian ice experience and he knew he wanted to bring Rita’s to Iowa. With its more than 600 franchises in 30 states and the District of Columbia, Rita’s is an institution on the East Coast, but virtually unknown in the Midwest. Cook was up to the challenge. After all, Rita’s offers a tried and true business model with a strong product.
Cook utilized the VetFran program for veterans interested in purchasing a franchise. VetFran’s training provided insight on the entire franchise process – the relationship between franchisor and franchisee, royalties, franchise fees, marketing support, etc., in addition to offering a discounted franchise fee for veterans.
FranServe is another valuable training resource that helped him to understand what he was getting into as a franchisee. The organization represents a number of franchisors by helping them recruit and train franchisees for success.
One of the first rules of franchising is to do your homework and contact a minimum of several dozen franchisees to get their insight and feedback on the franchisor, business model and level of support. Cook went above and beyond by contacting every single Rita’s franchise in the country. The very extensive research better prepared him for the ups and downs of the first few years of small business ownership.
Cook financed the start-up with a SBA government guaranteed loan through Great Western Bank. The loan financed the franchise fee, equipment, leasehold improvements and working capital.
If You Build It, They Will Come
One of the biggest lessons Cook learned to date is the need for controlled growth to build a sustainable business model. He pulled back on plans to open a second Rita’s location to focus instead on building a greater awareness of the Rita’s brand. He opened kiosks at Iowa State University’s Jack Trice Stadium and Wells Fargo Arena to introduce Iowa customers to Rita’s menu of frozen custard and Italian ice treats. He also purchased a trailer to sell Rita’s at fairs and festivals throughout Iowa and talked to other vendors to get ideas on other potential venues to showcase the product.
“We don’t have to hit home runs all the time,” said Cook. “It is okay to hit singles often too. Expanding into Jack Trice Stadium was a triple for us.”
His efforts to raise the profile of Rita’s in a new market didn’t come without its challenges though. He had to learn how to service large crowds of customers quickly due to the short window of time for concessions at college football games or special events. Cook also had to adjust his pricing and revenue models to cover extra expenses such as vending fees and revenue sharing with high school booster clubs. He quickly learned you can’t be afraid to have different pricing models for various locations.
While more Iowans are becoming familiar with Rita’s Italian ice and frozen custard, many customers continue to rely on the old staples like milkshakes. Cook’s location sells more milkshakes in one weekend than most Rita’s franchises sell during an entire season.
Cook credits his military experience for helping him transition to the franchise market. Time management, structure, flexibility, leadership and logistics are all key qualities of the military environment and one of the main reasons that many experts believe veterans are ideal franchisees.
Jayne Armstrong is the district director of the U.S. Small Business Administration’s (SBA) Iowa District Office with offices in Des Moines and Cedar Rapids. The SBA resource network includes 15 Small Business Development Centers, eight SCORE chapters, the Women’s Business Center and the Veteran’s Business Outreach Center servicing Iowa’s small business community.
About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.