On the fast lane: RNR Tire Express picks up speed
The national RNR Tire Express franchise operation had a banner year in 2020 and is poised for an even better 2021. The Tampa. The Florida-based company has made deals to open nearly 50 additional franchise stores by the end of the year.
The stores – which will be located in Arkansas, Arizona, Colorado, Indiana, Kentucky, New York and Ohio – will bring the total number of RNR Tire Express locations to around 170. That adds up to to the dozen RNR Tire Express franchise stores that have opened their doors. last year, despite the COVID-19 pandemic.
Larry Sutton, president of RNR Tire Express, wants the company to have 500 franchised outlets by 2027. It’s an ambitious goal, but well within reach, says Sutton – especially as more and more more cash-strapped tire buyers are exploring other forms of financing.
“Easy payment system”
RNR Tire Express’s âlease-to-own model,â as Sutton calls it, is steadily gaining traction – in part because it caters to an underserved niche of customers, he says.
âWhen we go into a new market that hasn’t seen what we’re doing, we can have a big impact because there are a lot of people out there who probably bought used tires every four to five months and never really had had a decent game. tires, âsays Sutton.
“In our program, you can buy a set of high quality tires” through what he calls an “easy payment system.”
âWe’ll make a deal with anyone for a $ 20 down payment and that will lead them to their next payment,â he explains.
âThere are millions of people in the United States who have no money in their bank accounts or maybe their credit cards are depleted. They must find a way to stretch their dollars
When registering clients, âwe don’t ask for a lot of information. We take a few personal references, where they work and where they live – and that’s pretty much the end of it. We don’t do credit checks or anything like that.
According to Sutton, customers don’t have to âgo for a cheaper tire with our model. They can get the tire they want. We will customize the payment according to their budget.
âOnce they have product on their car, from that point on, we’ll take care of their tires for as long as they’re on the vehicle.
âWe’re going to spin and balance for free. We repair the apartments free of charge. We offer a roadside assistance program. If they damage a tire, we’ll put a new tire on their car.
âThe tire industry has changed over the years,â he says. âIt used to be that you would buy tires and then you pay for fitting and balancing, you pay for the spin – all of those things have been added.
âWe said, ‘There’s a better way to do this.’ And that’s when we designed our customer service offering.
The economic shock of COVID-19 has helped accelerate acceptance of the lease-buy model, according to Sutton. Loyal customers accounted for over 40% of RNR Tire Express franchisee sales last year.
âIt’s a sign of satisfaction. And we want to keep that number high. We wouldn’t mind if it was 60% or more.
Tire mindset first
Most RNR Tire Express stores have a 70/30 ratio of tire sales to wheel sales. But this has not always been the case.
âOur model was originally geared towards wheels,â says Sutton, who founded RNR Tire Express 21 years ago.
âWhen we opened our company name was Rent-N-Roll Custom Wheels & Performance Tires and we were really focused on the wheels. The timing was good because when we got into the business the wheels were just starting to get bigger.
âWhen we started we were doing 17’s and 18’s, then 20’s and 22. We grew up really well with this model, but after several years we found out that we had gotten into a corner. ”
Consumers viewed Rent-N-Roll stores as places to buy custom wheels – not tires, he says.
âIt was the look of our stores and the way we advertised. We were in the wheel business. And we found out that people wanted to buy tires from tire shops, not wheel shops.
âPoll after poll, people were like, ‘Why would I go to RentN-Roll to buy tires?’ I would ask people, âHave you ever been to one of our stores? And they were like, ‘No. I don’t need wheels.
âThen I would ask, ‘Well, do you need tires? They were like, “Oh, do you sell tires?” ”
âThe other thing about the wheel business is that we found that we could take a store to a certain level, but we weren’t getting the growth that you want to see in a mature store. It was because we didn’t have this touring tire business.
Some Rent-N-Roll franchisees have discovered the same thing. âOne of them called me and said, ‘Hey, I have an idea I want to try. I think we should pay more attention to the tires. When customers walk into my store I want the tires to be the first thing they see and the wheels to be in a different area. ‘ âWe started talking about it,â says Sutton.
The franchisee remodeled its showroom and started running ads focusing on tires. âOf course, this has become the fastest growing store we’ve ever had. I said, ‘We might be on something here.’ ”
Another franchisee has adopted the âtires firstâ approach with great success. Others quickly followed. âWe said, ‘Now we know what’s got to happen here.’ We were a wheel dealer who sold tires and we thought we had to be a tire dealer who sold wheels. And that’s when we became RNR Tire Express. We have reinvented ourselves.
âIt really took off. We started to develop new stores faster and our more mature stores which were renamed grew their revenues faster. “
The Sutton and RNR Tire Express franchisees discovered something else: the switch to the tire-on-wheel format did not hurt their wheel sales. âWe make as many wheels or more than we always have,â he says.
89% growth rate
Sutton says most RNR Tire Express franchisees are open to trying new concepts in their stores. And he supports them.
âWe’ll help them put whatever they want to do in place. Now, if a guy calls me up and wants to try something that we’ve tried before and haven’t had much success with, I’ll tell him right off the bat, âThese are the things we had to deal with. You could be going through the same thing.
âWhen I got into the franchise business, my lawyer told me, ‘You’re not going to be a good franchisor.’ You never say no to anyone.
âI didn’t know what he meant at the time, but I quickly realized that there are areas where you have to say, ‘Let me help you’.
âBut I don’t suppose that because we failed at something someone else will. We give franchisees the freedom to try new things because you never know when someone will come up with a different implementation that will make things work.
At the same time, RNR Tire Express franchisees must also meet certain brand standards.
This particularly benefits new franchisees who do not have experience in the tire or wheel industry, says Sutton.
âWe have a very comprehensive training and support group. My trainers are former store managers and they know their stuff like the back of their hand.
New franchisees visit RNR Tire Express headquarters in Tampa for in-person training. âThey will come here for a few weeks and work with our people. Then we will do a follow-up in the field. My trainers and salespeople will come to their homes to set up the stores, and then when they leave our sales trainers will come in.
“And we will also do that for our franchisees who may be having a difficult year and need help.”
“We just opened our first store in New York State in Queensbury, which is in this northern corridor near the Adirondacks.”
The owners of the outlet are a couple who had operated a paper products distribution business, which they sold. âThey read an article about us and visited us. And now we are discussing with them the expansion into three more stores.
The hire-purchase model can be attractive to small independent businesses looking to change careers, says Sutton.
âEveryone needs tires. Depending on what you read, 15-20% of the market is in the market at any given time. How many other companies can say that? ”
The light truck tire market is particularly hot right now, he adds. âAnd that brings us additional business. A lot of people want accessories when they buy bigger tires for Jeeps and vehicles like that.
âWe are deploying ancillary products and services such as lifting kits in different markets and it is working well. We say to franchisees, “This is something you should get because you’re going to run out of business if you don’t.”
âA guy who wants an all-terrain package is probably going to buy his tiresâ in the same place.
All of the above should add to another record year for RNR Tire Express. The company achieved sales of $ 211 million in 2020, a 12% year-over-year increase. This has maintained an overall three-year revenue growth rate of 89%.
âWe signed a deal last year with a very aggressive, well-heeled, well-funded group and they want to open 50 stores. They have already opened three successful stores from the start.
“Our new store openings are off the charts because of how quickly they’ve grown their customer base.”
Sutton himself owns a percentage of an RNR franchise, which operates under the umbrella of SPF Management Co. LLC. (Based in Tampa, the franchise has 20 locations.)
âThere are others that I wouldn’t mind owning a part of, but I try to stay in my lane when I can,â he laughs.