Perhaps you are an investor or manager considering investing in a rent-to-own business opportunity and wondering if franchising is the way to go. There are many advantages to buying a franchise from a large national company rather than going it alone. Savings in merchandise and advertising costs due to increased buying influence, expert advice and supervision on site selection and store opening, and professional employee and manager training are all reasons why the RTO franchise is a popular option. But what does it take to qualify for a rent-to-own franchise operation? Let’s take a look at what one of the leading companies in the RTO industry has to say about franchising, what it looks for in franchisees, and what it offers in return.
ColorTyme is the franchise brand of Rent a Center (RAC franchise), a company that provides rent-to-own furniture and other durable goods for the home, as well as a variety of financial services. ColorTyme’s success over many years is due to making rent-to-own affordable for both clients and franchisees, as there aren’t many businesses you can get into for $150,000 that give you freedom and also full franchise financing and marketing support. Although ColorTyme does not offer franchise fee financing, financing is available through a third-party lender, Wells Fargo Foothill, which provides working capital loans of up to $80,000, along with 100% inventory financing. ColorTyme franchisees are expected to have good credit and at least $150,000 in available liquid capital. In addition, the company seeks prospective franchisees who have successful business experience (although not necessarily rent-to-own) and who are dynamic and ambitious entrepreneurs.
In return, ColorTyme provides market analysis including maps, customer demographics, and visits by ColorTyme representatives as needed. This market analysis consists of retail space availability, competitor analysis, major retailer analysis, and demographic statistics based on typical leasing customer profiles. Since the location of a rent-to-own franchise is the key to its success, market analysis includes factors such as the convenience of residential areas and ease of access (whether customers can easily get in and out of the store , with no highways or other obstacles that are barriers to people shopping in the area), and how safe the place feels for a customer (since the majority of RTO customers are women, so the centers must be well well-lit, well-maintained, and non-threatening). RTO stores are typically located in strip or strip malls with major anchor stores, and variables such as traffic patterns, visibility, and signage can affect site decision making. Throughout the course of site selection and store opening, an experienced franchise field consultant takes potential franchisees step-by-step through the opening process, providing up-to-date information and guidance along the way to ensure make the store successful.