March 01, 2010 // Franchising.com // tampa, fl - Larry Sutton, owner and founder of RNR Custom Wheels and Tires is featured in the February issue of the Tampa Bay Business Journal, entitled "A Rent-To-Own Keeps It's Growth Rolling." The article follows Sutton's career, from his first company, Champion Rent-to-Own, with nearly 150 stores offering furniture and appliances, which he sold in 1997 to a larger business and founding RNR in 2000.
In 2000, bored from retirement, Sutton heard about a California rent-to-own company specializing in automotive products. "I looked into it, and knew I could do it better," said Sutton, who knew nothing about wheels and tires at the time. "There isn't anybody really doing it like we do, although others are popping up now. We're not fearful of competition because not many can franchise the concept successfully."
Sutton sold his first RNR franchise in 2003 and now has 58 franchise stores along with nine corporate stores across the US. He found that custom wheels and tires draw a certain type of customer RNR needed to cultivate. "We learned that the reality is people want to touch it, feel it, and look at it next to their cars, it was recognition of product opportunity with the cultural change that was coming," Sutton said. "We were lucky in recognizing the opportunities and in seeing the lack of customer service. We know personalization becomes a habit, and it's becoming a big move among women."
The strategy has been to key his business to what he describes as a cultural change in consumers by providing a "simplistic way to personalize their vehicle" and pay for it over time. In 2008, RNR had revenue of $55 million, up from $18.8 million in 2005, earned a place in Inc. Magazine's rankings for revenue growth last year, and topped out at #1 for Miscellaneous Auto Products in Entrepreneur Magazine.
Sutton said, "We try to be better than the guy down the street. That gives us advocacy and growth." Sutton has used a market development concept to grow the number of franchisees. "Generally, the investment required of a franchisee in the market development concept is $500,000 to $600,000," Sutton said. "The net worth of an individual needs to be $300,000 to $500,000."
Now, because of the economy and lack of credit, the existing franchise strategy needs some tweaking, but that has not deterred Sutton. He is moving toward a single store franchise concept in which an owner is directly involved in the business. He thinks this new strategy, which partially counts on the U.S. Small Business Administration kicking in with loans as proposed, will provide quicker growth for RNR over the next 10 years.