Rent-A-Tire's revenue mix is 50-50 - rental-purchase and retail. The company actively manages marketing campaigns to maintain that mix.

Rent-A-Tire's revenue mix is 50-50 - rental-purchase and retail. The company actively manages marketing campaigns to maintain that mix.

Rent-A-Tire, the largest independently owned custom wheel rental company in the United States, is actively searching for acquisition opportunities and experienced employees as they expand between the coasts.

Based in Los Angeles, Rent-A-Tire operates 60 locations in California, Nevada, New Mexico, Arizona, Texas, Florida and Georgia. RTO Online estimates the company's 2008 revenue will be over $90 million, significantly higher than any other wheel rental company, private or franchise, in the U.S. Only RNR (formerly Rent-N-Roll) has more storefronts - 69 as of Wednesday. RNR's estimated 2007 total revenue was $50 million*. As of March, 2008, Rimco, the custom wheel franchise division of Aaron's, operated 29 locations.

After the acquisition of Rent-A-Wheel in January (see story), Rent-A-Tire launched an aggressive new-store opening plan that will push the company to over 100 locations by 2010.

Rent-A-Tire was founded by Co-CEO's Don Sabino and John Bowlin. CFO Matt Seaburn joined the company as CFO in 2005 after a stint as the head of commercial lending for First Federal Bank of California. His primary responsibility has been growth. Rent-A-Tire has grown from 35 to 60 locations during his two year tenure. "We are primarily growing through de novo openings," said Seaburn. "But our acquisition of Rent-A-Wheel in Florida and Georgia (see story) went very well and we're interested in looking at acquiring more existing stores." Although recently focused on the Southwest, Seaburn is shopping locations from California to Florida.

Unlike traditional rent-to-own stores that can operate independently, Seaburn believes it takes a regional presence to be profitable in the wheel rental business. "Unless you're very big, I don't see how the cash flow works," he said. Seaburn said the company has no plans to franchise.

Rent-A-Tire's revenue mix is 50-50 - rental-purchase and retail. The company actively manages marketing campaigns to maintain that mix. "At certain times of the year we create incentives for either RTO or retail customers," Seaburn said. "I like the 50-50 mix. It mitigates some cash flow risk by keeping us from becoming too dependent on financing customers. It's a good balance."

"I'm as proud of our profit growth as I am the new store openings," Seaburn added. "The bottom line is as important a the top-line."

At an average revenue of more than $1.3 million per location, Rent-A-Tire believes it has the model nailed. Seaburn said the financial side of wheel rentals different than traditional RTO. "The cash flow of a wheel store is much different than a traditional RTO. It's much more expensive," he said.

The typical Rent-A-Tire store footprint is also much different than the traditional operation. Of the average 4,000 square feet of an average store, only 1,000 sq. ft. is devoted to showroom. The remaining space is devoted to work bays and service areas.