Louis Garcia has been in the rent-to-own sector for years. As part of Rent-A-Center’s re-franchising initiative, he and his investment partners now own 41 stores across the greater Baltimore, MD and Washington D.C. areas.
Rent-A-Center’s re-franchising program revolves around partnering great operators with sophisticated franchise investors. “Year after year we’ve handed out top performance awards to Louis’s stores” said Cathy Skula, Rent-A-Center’s EVP of franchising. “I couldn’t think of a better-suited operator than Louis for our next big refranchising transaction.”
Garcia began his career in the rent-to-own industry in 1981, first working as a driver for an independent rent-to-own dealer. Over the years, he worked for several rent-to-own companies in different capacities until he finally took the chance to get into business for himself in 2004.
“I decided it was time to open my own business, so I found a partner and opened a ColorTyme franchise in Baltimore,” Garcia said. “We started with one location, and then eventually bought three more. Instead of expanding, we directed our focus to making our existing stores bigger and better.”
Taking this approach to development paid off handsomely for Garcia, who was able to build his ColorTyme stores to some of the highest-performing in the system. After joining forces with two more business partners to reduce debt and increase the reach of their existing stores, Rent-A-Center approached Garcia’s team about converting their ColorTyme locations to the Rent-A-Center brand and they emphatically agreed.
“Rent-A-Center is a household name with a lot of great branding, so it made perfect sense for us to convert,” Garcia explained. “When we first converted, we were competing with Rent-A-Center corporate stores in close proximity to our former ColorTyme locations, but that didn’t keep us from growing our business. We became one of the largest revenue producers in the Rent-A-Center system.”
In early 2018 Rent-A-Center VP of Franchise Development Michael Landry reached out to Garcia with the idea of materially expanding his successful franchise operation in Maryland by pairing him with one of the many franchise investors interested in Rent-A-Center.
“With our current stores in such strong standing, I began discussing expansion with Michael,” Garcia said.
Garcia was introduced to a highly successful Texas-based investment group considering Rent-A-Center and other franchise investments. Both quickly realized it was a great opportunity. They retained David Paris partner at Paris Ackerman LLP, who has worked on other Rent-A-Center transactions to help manage the acquisition.
Paris explained that his previous experience working with Rent-A-Center’s leadership team was beneficial in getting the transaction completed in the desired timeframe of the parties. He currently represents the largest franchisee in the Rent-A-Center system, so he was able to present the investor with a firsthand perspective on the brand’s business model.
“We deal with many of the nation’s top franchise brands in various industries, so I get to see how franchisors behave and treat their franchisees,” Paris said. “It goes without saying those relationships can get difficult, but I was very encouraged by how Rent-A-Center treated its franchisees. I like the business model on every level and everything I’ve seen from Rent-A-Center points to the fact the brand bends over backward to create a partnership with its franchisees.”
It didn’t take long for the parties to begin working on the 37 unit corporate transaction and acquisition of Garcia’s and his former investment partners 4 franchised stores simultaneously. Now complete, Garcia will have an ownership stake in 41 stores across Maryland and Virginia and is already planning on further growth. He explained that large-scale development with Rent-A-Center was an appealing business venture for a number of reasons.
“Franchisees generally run their businesses more intimately than a corporation can,” Garcia said. “While a corporation does a great job with setup, training and disseminating information, someone immersed in daily operations with their hands on the pulse of the business can make quicker decisions. A corporation is like a battleship, where a franchisee is like a speedboat, capable of instantly changing direction to impact business. This deal gives us a ton of opportunity to make a significant difference in the market.”
Paris echoed Garcia’s sentiment, saying, “I've learned that as a lawyer who represents large multi-unit franchisees, my clients are interested in acquiring assets from corporate for that exact reason. Being closer to the business makes them better, more efficient operators. With Rent-A-Center, that is especially important. It’s a local business that, at its core, deals in delicate relationships with customers with needs and stories and requires that special touch and feel that can sometimes dissipate when run by the corporate mothership.”
For Garcia, the multi-unit deal is an opportunity to harness his rent-to-own expertise and apply what made his existing stores successful on a broader scale, a task he said he's excited to take on.
“We’re neighborhood stores, and people are the most important thing for us,” Garcia said. “Rent-to-own is unique in who we serve, so establishing a personal touch with our customer base will remain our priority. It begins and ends with our people.”