RTO Excellence; Big Ideas In A Small Town

Each issue of RTO Magazine (Print Edition) recognizes one rent to own owner or operator that has built a successful business through a day-to-day commitment to excellence. Our goal is to recognize achievement, find out what drives success, and to share hints we can learn from and emulate.

The November 2005 issue's success story is Joe Burchfield, Right Choice Rentals.

Joe Burchfield was 21 years old and fresh out of Southern Arkansas University when he answered a classified ad seeking an account manager. Joe thought he was particularly well-suited for the job (he did, after all, have an accounting degree!). When Joe arrived for the interview and learned the account manager slot had been filled, he agreed to accept a position as a driver for the company, E-Z Rental.

Joe Burchfield showed up for his first day of work in a shirt, tie and dress slacks. The year was 1987, and his co-workers donned the unofficial RTO uniform of the day – jeans, t-shirt and a lit cigarette. As one of E-Z Rental’s drivers based in Magnolia, Arkansas (population: 10,000), Joe traveled among owner David Pyle’s other stores, delivering product wherever it was needed.

Within 30 days the person who had been hired as the account manager decided he didn’t like the job, giving Joe the chance to take over his duties. There were no training manuals, and the store manager at the time wasn’t much help, either. Undaunted, Joe simply figured things out for himself.

“I developed my own system using three different-colored highlighters, depending on how late a payment was. I put some structure to it and became pretty darn good at running accounts,” said Joe.

David Pyle, the man who hired Joe, was something of an RTO baron in late-80’s Arkansas. While he was part owner of E-Z Rental, he was also the complete owner of a store across town, Rent-n-Own. Impressed with Joe’s account manager skills, David tapped Joe to become Rent-n-Own’s new store manager.

“I went from running a 200-account route to managing a 750-BOR store. It took me awhile to feel as though I had my head above water. I was in charge of the store plus the entire service facility. Thankfully, my father was a TV repairman, which helped me understand the service business.”

Over the next few years, Joe honed his managerial skills while more than doubling the BOR of the Rent-n-Own store to a peak of 1307 units. He began to feel he needed more of a challenge.

“In 1992, I took a position within the home office as training coordinator for David Pyle’s seven stores. I wrote manuals, conducted seminars, even doubled as company auditor. By ’94, I was a full-fledged district manager overseeing five of our company’s nine stores. Later we were sold to HomeChoice, which eventually became Rent Way. We were a great purchase for them – small town stores with low overhead, and each one averaged about 900 BOR.”

While the chain was a great purchase for a large entity, Joe felt his talents were better suited to a small company. So Joe left Arkansas for Shreveport, Louisiana where he spent five years managing operations for Good Home Center. All the while, though, Joe dreamed of being in business for himself. Like most folks, the only thing holding him back was a lack of capital. But a chance introduction to entrepreneur John Earnhardt helped Joe secure financing and make his RTO dream a reality.

Joe returned to Arkansas, and he knew just where to open his first store - in the tiny hamlet of Stamps, Arkansas (population: 2,000). Despite the small number of residents, Joe knew stores in Magnolia delivered merchandise there and he sensed an opportunity. In March of 1999, Stamps, Arkansas became the location of Joe’s first Right Choice Rental store.

The Stamps store performed well enough that Joe was able to add Prescott, Arkansas (population: 4,000) in September of 2000. Most recently, Joe added his third location in the big city (at least by Right Choice standards) of Texarkana, Arkansas (population: 30,000).

So, how does Joe make the small-town RTO model work? The answer lies not just in Joe’s head, but in his character.

“We all look at the numbers, but sometimes that bottom line is not the most important thing. When I see a customer develop a better lifestyle or quality of life through acquiring our merchandise, or when I see an employee develop a career, that makes me feel as though we have done something excellent. Our customers are told ‘no’ every day. These people are good folks who just get into tough situations. We want to be able to help.”

One way Right Choice Rental stores help is by offering a wide array of traditional and non-traditional RTO products and services. Sure, you can rent televisions, sofas and appliances in Joe’s stores. But you can also rent a U-haul, a car audio system or get phone service. And Joe’s next idea is really breaking new ground. At the Prescott location, Joe’s taken the bold step of adding a Radio Shack franchise to maximize his revenue opportunities.

“We’ve added Radio Shack fixtures and merchandise right within our own store. It’s not a kiosk, or even a separate counter. The potential benefit to us and to our customers is huge. Any Radio Shack item our customers want to rent, I’ll move over to a rental agreement. Digital cameras, LCD televisions, you name it. Plus, this introduces our store to an entirely new customer base.”

Joe believes the Radio Shack franchise could help him lower his overall merchandise cost, as well. He plans to take advantage of Radio Shack’s buying power and check his franchisee price for any item before purchasing it through a distributor or even direct from a manufacturer.

In addition to the Radio Shack opportunity, Joe has built another successful idea around a consumer trend – storage units.

“I almost hate to give this idea away it’s done so well for us. But I kept seeing all these mini storage units that were going for $30, $60, $80 a month that a customer had to drive to and that they would never own. It occurred to me that we could rent-to-own portable buildings – and boy, has that done well for us.”

Joe’s company created the patterns and keeps the materials in stock to custom-build each unit. Joe’s most popular storage building measures 8 foot by 12 foot and rents for $99 a month for 18 months.

“We’ve got it down to where we build it within 24- 48 hours and then one person can load and unload the building with a winch mounted to a refabricated flatbed truck. We set it up at the customer’s home, put it on blocks, level it, and we’re done. The best part is that I’ve yet to go pick one up from a customer, and for every unit I rent, I cash sale a unit for $1299.”

Joe’s seen how the rental business has shifted over the years, and he’s using items like the Radio Shack franchise and RTO storage units to set his company up to weather long-term change. As for short-term growth, Joe sees some opportunity right around the corner.

“I will say I’m actively exploring the tire and rim rental opportunity. And as for more standard RTO merchandise, gaming systems will be big this holiday. I’ll also rent MP3 players through Radio Shack. I am considering how I can make iPod’s available to my customers, but that may be further down the road because of how delicate the units are. And LCD televisions are growing at a fast pace for us. We rent a typical 44” LCD set for $39.95 a week for 104 weeks.”

Joe says in the small towns where he operates an advertising plan is secondary to treating customers well. Word-of-mouth is where it’s at.

“We pay $25 to any customer who refers a new customer. We’re willing to pay cash, but usually the customer just wants it deducted from their agreement. And nothing’s better than a smile and a handshake. We don’t just hang flyers on doors when we deliver merchandise. We knock on the door and invite that customer down to see what we’ve got in our store. We’re sort of ‘old school’ that way.”

Joe motivates his employees by demonstrating that no one, including him, is too important for a task at hand.

“One of the first things I did as a district manager, was on my first day in a new store or with a new hire, I would help load or unload a truck or clean the store restroom. I wanted the people I was working with to understand that we are a team. And to this day, you are just as likely to find me sweeping the floor or loading a truck.”

It’s worth noting that Joe considers Right Choice Rental a family business, with wife Amy “keeping my papers in order and keeping me out the door!”. Joe’s children have also worked at the stores during school breaks and in summertime. And his dad, the TV repairman, runs Joe’s service operation.

“I will say that in this business you definitely make a lot of friends. I have so many strong connections to my stores and to my employees, that I don’t ever see myself retiring. I would like to eventually develop into a 7 – 10 store chain. The ultimate for me would be to have seven stores with seven great managers who I could give an ownership stake in the company. I’ve always said, ‘Help me make some money and I don’t mind sharing it with you!’”

Which just goes to show that you can live and work in the smallest of towns, and still manage to think really big. Just ask Joe Burchfield.

Vendors: Contact sales@rtoonline to recommend dealers for the RTO Excellence Profile.

RTO Online is the official channel for Rent-to-Own Industry News and the only independent source of news for the rent-to-own, rental-purchase, lease-purchase trade. RTO Online (Rent to Own Online) represents the choice of the entire RTO Industry for trusted information, as it happens.

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