After 10 years of offering performance tires and wheels with a rent-to-own option, Rent-N-Roll L.L.C. will try to bolster its broadline passenger tire sales as it looks to expand its RNR Custom Wheels and Tires franchise network.
After a nearly two-year expansion hiatus, Tampa-based RNR has reached into new markets with the opening of stores in Savannah, Ga., and Cape Girardeau, Mo. The company expects three more franchised stores to open by November in Norfolk, Va.; Kissimmee, Fla.; and Ocean Springs, Miss., a new market.
Those openings will bring RNR's store count to 70 in more than 20 states. Of those, 61 outlets will be operated by 14 franchisees along with nine company-owned stores. The recent openings are the first after a 19-month dry spell when the franchisees were buttoning up and tightening their belts due to the poor economy and tight credit, according to RNR President Larry Sutton.
We need to crank up on new franchisees, he said. Financing for these guys is like looking under a rock. If they didn't need financing, we could open one store every day.
The economy also has impacted customer buying habits, noted Mr. Sutton.
We've seen a little more well-to-do customers looking at the option of 120-days (same as cash financing). People have the mistaken impression we're a traditional rent-to-own. We're closer on our margins, he said. About 30 percent of the business is retail, where people pay in cash. Another 20 percent of customers uses the 120-day financing and the remainder chooses the rent-to-own option. If the rent-to-own customers pay off early, they receive a discount.
Our average customer makes more money than the usual rent-to-own customer, he added.
In addition to expanding the franchise network, Mr. Sutton wants to generate more business with broadline passenger tires, in addition to performance tires, which account for about 60 percent of RNR's sales.
We think a ton of people buy used tires. They can use our program and get new tires and be done paying in 18 months, instead of buying a used tire every six months, which is what a lot of people do, Mr. Sutton said. We've been offering it, but we have not gotten the message out.
To bolster passenger tire sales, the stores are changing their tire displays and rotating their tire ads with their wheel ads.
We're going after an increase in the passenger tire business , he said. Passenger is about 3 to 5 percent (of sales). We'd like to increase that incrementally. We want to grow our top line revenues with tires.
For its 10th anniversary in October, the franchise is rolling out a promotion nationwide that offers a 10-10-10 payment optionpay $10 every week to rent-to-own performance and passenger tires and wheels.
The company also will give away a 2011 Ford Fiesta and promote the anniversary in radio, TV and direct mail ads.
Mr. Sutton founded RNR, originally called Rent-N-Roll, after he sold his Champion Rent-to-Own companya nearly 150-store chain that offered furniture and appliancesin 1997.
He sold his first RNR franchise in 2003 in Tampa. The company netted a spot on Inc. magazine's ranking of companies with revenue growth in 2009 and ranked No. 252 in Entrepreneur magazine's list of top 500 franchises in the U.S. in 2008.