New Franchise Seekers, Many From Non-Retail Backgrounds, See Big Opportunity at ColorTyme
Recession-Proof Nature of the Rent-to-Own Industry Called a Powerful Attraction to Entrepreneurs
Plano, TX--(Marketwire) - Jim Deering, director of franchise development for ColorTyme, says calls to his department are usually from rent-to-own (RTO) industry insiders who've been in the business for years and are now eager to open a ColorTyme store of their own.
But since the dramatic economic downturn, Deering adds, rent-to-own pros are not the only ones calling him. He's also hearing from a diverse group of real estate industry professionals -- shopping center developers, commercial and residential investors and brokers -- all of whom have researched the financial stability of the rent-to-own industry and want to invest in a franchise. "Entrepreneurs want to own a franchise business backed by a winning formula," Deering says, "and ColorTyme boasts a stellar 30-year track record."
Deering says the option of renting-to-own is capturing the public's attention as cash- and credit-strapped consumers worry about how they'll be able to get the things they need. He points to a recent Money.CNN.com article profiling five retailers bucking the current slump in sales. "They actually compare rent-to-own stores with Wal-Mart, saying Wal-Mart is not the only game in town for shoppers on a tight budget," Deering says. "They quote retail experts who said 'rent-to-own is a natural fit for this economy'; 'consumers can buy over time instead of on credit; and 'it's just another way for consumers to get what they want and be responsible about it.'
"Rent-to-own has hit the retail mainstream," Deering says. "Owning an RTO store is becoming a popular choice for franchise operators."
New ColorTyme franchisees agree. Steven Dwyer has owned several companies in his business career, but was a novice in the rent-to-own business until he opened his Connecticut ColorTyme store in September. "After I sold my insurance business I researched franchise opportunities in a variety of industries," Dwyer says.
"The rent-to-own business kept coming out as the best fit for me and my goals.I met with a couple of national RTO franchisors and was approved by both companies. I went out to visit their stores and franchisees in person in several states. All in all, ColorTyme was my most attractive option," Dwyer added.
Real estate investor Ben Stanley, who opened his Tennessee ColorTyme store after extensively researching franchising options, says, "The rent-to-own industry is basically inflation and recession-proof. I see my ColorTyme store as a good way to diversify my portfolio."
Bud Evans, a former Realtor in Georgia, said, "ColorTyme offers you a great deal -- complete inventory financing, a great return on your investment, ongoing training and marketing programs, and flexibility with store locations. Being they are the oldest RTO franchise company in the country, they know what we need to be successful and they give it to us," he added. Evans will open the first of his three new ColorTyme stores in early 2009.
Rent-to-own stores tend do very well during tough economic times since customers are not required to undergo a credit check or commit to a long-term purchase contract. "People who have been victims of the financial downturn like ColorTyme's pay-as-you-go flexibility," Deering says. "People are afraid to be tied down with too much debt, so they're coming to their hometown ColorTyme store to get the things their families need with payment terms that fit their budgets."
Several ColorTyme franchisees said becoming a rent-to-own store owner was not a difficult transition from their previous careers. Ben Stanley said, "I've been renting and selling real estate to people for years, so now I'm renting and selling them furniture and appliances. In rent-to-own, it's all about having the hottest products and offering your customers the most flexible buying options and the best service."
ColorTyme, Inc., founded in 1979, is America's oldest franchisor of independently owned-and-operated rent-to-own stores and the fourth largest RTO company in the world. ColorTyme franchisees operate 210 rent-to-own stores in 34 states. RimTyme, the company's custom-wheels-and-tires franchise brand, operates 18 stores in eight states. ColorTyme is headquartered in Plano, Texas, and is an independent, wholly owned subsidiary of the largest RTO company in the world, Rent-A-Center (NASDAQ: RCII).