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Impact RTO Holdings Purchases an Additional 31 Rent-A-Centers
Impact RTO Holdings Purchases an Additional 31 Rent-A-Centers

With more than 75 locations, the Tampa-based holding company is the rent-to-own brand’s largest franchisee.

On March 26th, Impact RTO Holdings, the retail division of Tampa-based holdings company Impact Properties, closed a contract to purchase 31 corporate owned Rent-A-Center stores from Jacksonville, FL to Savanna, GA. With 45 existing locations, Impact RTO was already Rent-A-Center’s largest franchisee even before taking on the new stores. Now the holding company is on track to reach 100 stores over the next few years, a goal Impact RTO’s president, Shirin Kanji, said he’s held since he first approached Rent-A-Center in 2014.

“We laid out an ambitious plan when we started, and this deal brings us one step closer,” Kanji said. “This is a unique business, and we’re excited to get an even bigger chunk of it.”

Impact RTO’s Rent-A-Centers represent the first investment in the retail industry for Kanji, as well known hotel brands previously made up the majority of their franchise portfolio.

“I grew up in the hotel industry, literally,” Kanji said. “My parents purchased some small mom-and-pop hotels in Florida, and we lived in a small home behind the front-desk building. We started with budget hotel brands and then added some bigger hotel names as we grew. I went to college at NYU Stern and worked on Wall Street for a few years after graduating before I decided to move back into the family business.”

Kanji returned to the hotel business in 2008—a difficult time for just about every industry—but particularly hazardous for hotels, which rely on a surplus of expendable income among middle and upper class consumers. In 2009, Kanji decided he needed to diversify his investments to include businesses that were less reliant on a healthy economy. That’s when he began researching the rent-to-own segment.

“When I came back in 2008, we were finishing two major construction projects with our hotel franchises,” Kanji said. “They opened in 2009 when the economy really bottomed out. So, it was not great timing. We managed to fulfill all our contracts and we did okay, but it became clear that being fully invested in real estate, and especially hotels, put us at a real disadvantage. We started thinking about how to stabilize our portfolio. There aren’t too many very stable sectors out there, but rent-to-own is one, and once we wrapped our heads around that, it made a lot of sense to us.”

Just as hotels rely on the spending habits of a particular demographic, rent-to-own stores are designed to appeal to lower-income consumers who are often unable or less willing to pay for common high-price items in one upfront payment. For Kanji, that model offered a perfect complement to his hotel investments.

“The folks that travel to our hotels are mostly high-income,” Kanji said. “They have a certain job profile and a certain set of spending patterns. We realized that our entire business was catering to this very specific demographic, and if anything happened to that demo or if they started spending less for any reason, we were exposed to risk. To balance that out, we wanted a business that catered to a different demographic.”

Kanji shopped around a number of different retail concepts for a few years before reaching out to Rent-A-Center in 2014. After years of researching his ideal consumer profile, Kanji said that the rent-to- business stood out as the best model for his portfolio, and from there it didn’t take long to settle on Rent-A-Center.

“Rent-A-Center is the largest, most well-known and all-around best brand in the rent-to-own space, so once we were settled on that model, it wasn’t a difficult choice,” Kanji said.

Kanji was determined to have Rent-A-Center make a quick and dramatic impact on his holdings, so he and the brand’s development team got to work preparing a large-scale growth plan, eventually agreeing on a 40-store deal across eight states, the largest deal the franchise has ever made with a single franchisee.

According to Michael Landry, Rent-A-Center’s vice president of franchise development, the brand was looking at a number of similarly large deals with multi-unit investors before the deal closed with Kanji, and he has little doubt that they chose the right partner.

“We were looking at several potential partners for a large-scale deal back in 2015,” Landry said. “Looking back, choosing to work with Shirin and Impact RTO was among the best decisions we’ve made as a company. He’s become a shining example of the type of multi-unit franchisee community we want to build.”

In Kanji’s three years with Rent-A-Center, he has worked closely with the brand to make sure that he is taking full advantage of its unique business model.

“Especially in the beginning, there was a lot of coordination with Rent-A-Center to make sure that everything was running efficiently,” Kanji said. “Unlike most other stores, Rent-A-Center has a recurring payment model, which makes it much more of a relationship business than most other concepts. So, we were careful to make sure that we fully understood how to manage that model and make the most of it.”

Both Kanji and Rent-A-Center see Impact RTO’s recent investment in 31 new locations as a clear indication that the partnership is meeting the lofty expectations of both parties.

“We’ve found exactly what we were looking for with Rent-A-Center,” Kanji said. “Not only does the model work perfectly for us, but the corporate team has been a fantastic partner to work with.”

As Impact RTO Holdings further pulls away as the largest Rent-A-Center franchisee, Landry said he hopes to replicate their success with new multi-unit investors.

“Shirin has really brought us into our future, and it’s exactly the type of relationship we’re looking to find more of. He gets our system and follows the model, but he also sees the business from a fresh perspective and gives us new ideas. We are learning together and building an incredibly strong franchise organization. We’re eager to find that same passion and sophistication from new investors as we look to expand our system of multi-unit franchisees.”

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