Top 250 Franchise by Entrepreneur – Rank no.18 – Aaron’s – US
Products & Services: Furniture, electronics, computer & appliance leasing & sales
Number of Locations: 2,098
Total Investment: $275.61K – 707.4K
Began Franchising: 1992
Aaron’s offers furnishings such as big screen televisions, couches and refrigerators for rental or purchase at its stores across North America. R. Charles Loudermilk Sr. began the business in 1955, renting folding chairs he had purchased from an army surplus store for 10 cents a day. Aaron’s Rents began franchising in 1992.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $15,000 – $50,000
Ongoing Royalty Fee: 6%
Term of Franchise Agreement: 10 years, renewable
Net Worth: $500,000
Liquid Cash Available: $350,000
90% of all franchisees own more than one unit. Number of employees needed to run franchised unit: 6 – 10. Absentee ownership of franchise is allowed. (30% of current franchisees are owner/operators).
|FINANCING TYPE||IN-HOUSE||THIRD PARTY|
How This Franchise Supports Franchisees
Franchise Ranking History
|Traded as||NYSE: AAN|
|Founder(s)||R. Charles Loudermilk|
|Headquarters||Atlanta, Georgia, USA|
|Area served||North America|
|Key people||R. Charles Loudermilk
Ronald W. Allen
(President) & (CEO)
|Revenue||$ 2.02 billion (FY 2011)|
|Operating income||$ 183.3 million (FY 2011)|
|Net income||$ 113.7 million (FY 2011)|
|Total assets||$ 1.7 billion (FY 2011)|
|Total equity||$ 976.5 million (FY 2011)|
|Employees||11200 (December 2011)|
Aaron’s Corporate Furnishings
Aaron’s, Inc. is a lease-to-own retailer. The company focuses on leases and retail sales of furniture, electronics, appliances, and computers. It is divided into three major divisions: sales and lease ownership; corporate furnishings; and manufacturing. The incorporation of manufacturing as well as retailing makes the company vertically integrated.
As of 31 December 2012, Aaron’s, Inc. has 2,073 stores: 1,324 Company-operated stores in 29 states and 749 independently owned franchised stores in 48 states and Canada. broken down of Company-operated stores as follows:
- 1,246 Aaron’s Sales & Lease Ownership stores, includes 19 Company-operated RIMCO stores
- 78 HomeSmart stores
|This section requires expansion. (May 2011)|
Aaron Rents, Inc. was founded by R. Charles Loudermilk, Sr. in 1955.
In September 2008, Aaron’s announced the sale of its Corporate Furnishings division to CORT Business Services, part of Berkshire Hathaway. Aaron’s Corporate Furnishings division, which operated 47 stores, had recorded revenues of approximately $99 million in 2007.
Within the last quarter of 2012 Aaron’s will be opening its 2000th store.
In February 2013, customers sued Aaron’s for allegedly using spyware on rented computers to send over 185,000 emails to the rental company, including customers’ Social Security numbers, passwords and captured keystrokes, as well as images including pictures of nude children and people having sex. Aaron’s, Inc. officials had previously said that the company had not installed the spyware, and individual franchisees were responsible.
- NASCAR racing: Aaron’s sponsors the No. 55 “Aaron’s Dream Machine", driven by Mark Martin and Michael Waltrip in NASCAR’s Sprint Cup Series. They also sponsor Ken Butler III, a decision that has been criticized because he is the son of Bill Butler, Jr, the Chief Operating Officer of Aaron’s. Aaron’s has also been the namesake of the spring race at Talladega Superspeedway, the Aaron’s 499, since 2002.
- National Hot Rod Association NHRA Racing: Aaron’s sponsors Don Schumacher racing in the NHRA Full Throttle Drag Racing Series. They sponsor Funny Car driver Jack Beckman and Top Fuel driver Antron Brown.