The ice cream retail sector has faced economic challenges over the last year that included a major chain closing down and selling off its assets, another shutting down in a corporate dispute, and several others filing for bankruptcy protection.

Bankrupt drugstore chain Rite Aid is liquidating its assets, which includes a sale of its Thrifty Ice Cream brand for $19.2 million to Hilrod Holdings LP, whose general partner, Hilton Schlosberg, is also co-founder and CEO of Monster Beverage Corporation.

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Rite Aid had operated about 500 Thrifty Ice Cream counters in its stores and sold its private label Thrifty brand in over 2,300 grocery stores and chain stores across the U.S.

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In the first half of 2025, a franchisee of a popular ice cream fast-food chain, Dairy Queen, shut down about 30 locations in Texas over a dispute with the parent company.

Parent company American Dairy Queen pulled the franchises from franchisee Project Lonestar after it failed to remodel its locations. That meant that those locations could not order supplies from the parent corporation and would have to shut down.

Dairy Queen franchisee battles parent company

“These closures are related to closures last month by the same franchise owner,” a Dairy Queen spokesperson said of the closings. “The closures are an isolated event, and we refrain from publicly sharing contract terms.”

The dispute prevented Lonestar from selling its franchise locations, which forced it to close the Dairy Queens that it operated.

Greene Family Enterprises LLC, which owns a St. Johns, Fla.-based Rita’s Italian Ice franchise, filed for Chapter 11 bankruptcy protection, seeking to restructure its debts.

The Rita’s Italian Ice franchise filed its Subchapter V petition on June 9 in the U.S. Bankruptcy Court for the Middle District of Florida, listing $100,000 to $500,000 in assets and $500,000 to $1 million in liabilities, including $362,000 owed to Cadence Bank, $64,000 in unpaid taxes owed to the Florida Department of Revenue, and a $43,000 claim by Headway Capital.

And now, another Rita’s franchisee is heading for bankruptcy court.

Rita’s Italian Ice franchisee files for bankruptcy protection.

Image source: Hammerschmidt/picture alliance via Getty Images

Rita’s Italian Ice franchisee files for bankruptcy

Frozen treat chain franchisee Armellino Italian Ices Corp., which operates a Rita’s Italian Ice franchise in Tuscaloosa, Ala., filed for Chapter 11 bankruptcy, seeking to reorganize its business.

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The debtor also operates a PJ’s Coffee franchise in Tuscaloosa that is part of the bankruptcy.

The debtor filed its petition in the U.S. Bankruptcy Court for the Northern District of Alabama on July 1, listing $100,000 to $500,000 in assets and $500,000 to $1 million in liabilities.

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Armellino Italian Ices indicated in its petition that no funds would be available for distribution to unsecured creditors after administrative expenses are paid.

Rita’s Italian Ice, founded in 1984 in Bensalem, Pa., is a specialty dessert shop selling Italian ice, frozen custard, Gelati, Italian Ice Blenders, Gelati Blenders, milkshakes, and take-home treats, such as custard cookie sandwiches and custard pints.

Rita’s, which claims to be the world’s largest Italian Ice franchise in the world, had been owned by parent company Argosy Private Equity from December 2016 until Nov. 26, 2024, when it exited its investment in Rita’s Franchise Company LLC.

The Trevose, Pa., company revealed on Jan. 9, 2025, that private equity firm Maple Park Capital Partners purchased a majority interest in Rita’s Italian Ice & Frozen Custard.

The Italian Ice and frozen custard chain has 592 locations in 29 states and the District of Columbia, according to its website.

PJ’s has 192 locations in 14 states, with over 300 locations in development, according to the company’s website.

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