By BEN HEINEMANN
With the economy still shaky and consumers keeping their wallets buttoned up, the rent-to-own category is one type of business that is enjoying continued growth.
The rent-to-own concept allows consumers to lease everything from furniture and electronics to appliances and even fireplaces. Customers that lease from these companies make weekly or monthly payments that can be applied to the purchase price of the item they are renting, giving renters flexibility in the amount of time they wish to keep the desired item and even allowing them to try an item out before making a commitment to buy it.
ColorTyme is one of the most well-known rent-to-own businesses in the industry. In fact, founder Willie Talley was a great pioneer in establishing the rent-to-own segment. And while the rent-to-own business has generally been a successful one, a continued recession means an expanding customer base, with many consumers now taking advantage of the benefits leasing provides during times of economic uncertainty.
“Banking changes and lack of access to credit for huge pockets of the U.S. population make the rent-to-own category very attractive,” says Michael Landry, vice president of franchising for ColorTyme. “ColorTyme has a rich history dating back well over 30 years. Today, the rent-to-own market is $7 billion industry in the U.S. and growing.”
After two years in business, ColorTyme began franchising in 1982. The business model proved to be very successful, making “a great deal of money” for owners over the years, according to Landry. Eventually, the franchise grew to over 500 locations and was then acquired by Renters Choice, a name that later changed to ColorTyme’s well-known parent company
Rent-A-Center. That brand continues to dominate the rent-to-own category, with over 3,000 locations and $3 billion in annual revenue.
The ColorTyme name lives on, however, and is a great opportunity for potential franchisees looking to be part of a mid-size franchise while also benefitting from a rapidly growing industry.
“A smaller unit franchise system allows greater access to support staff at all levels,” Landry explains. “With 222 units, ColorTyme franchise owners can catch our CEO or COO on the phone at virtually any time. Since each of these executives ran upwards of 400 successful Rent-A-Center units in their previous roles, this type of access and consulting is priceless.”
Additionally, because ColorTyme is backed by its multi-billion dollar parent company, securing a loan to start your own ColorTyme franchise is a much easier process when compared to other smaller franchise companies.
“We see opportunities for continued growth upwards of 500-700 units,” says Landry. “While most franchise companies “want” to grow, our parent company has enough confidence in our business model to co-guarantee loans. Backed by Rent-A-Center and facilitated by CitiBank, we have access to tens of millions of dollars to lend to franchise owners.”
Since the economy makes the rent-to-own option attractive not only to consumers but also potential franchisees looking for a business opportunity, ColorTyme is poised for continued growth.
“We feel very fortunate,” says Landry. “We look forward to future growth.”
