Rent-to-own News - Buddy's, now largest RTO indie, begins franchising

Buddy's owner Jamie Slatton with company president Joe Gazzo.

Tampa-based Buddy’s Home Furnishings, in February, completed its Franchise Disclosure Document (FDD) and is now listed in the national franchise registry ushering in the next era of the company's development.

The seminal rent to own company founded in 1961 by the late Norman Slatton Sr. and his wife Lois Slatton has opened 34 licensee stores over the last three years in an aggressive campaign led by RTO veteran Todd Homberger formerly of RentWay.

Read interviews with licensees here.

"Protecting the Name Buddy’s Home Furnishings is paramount and critical and in order to do that we must select the right franchisees," Homberger said. "Then we must offer great training, have a strategic model and plan, and support that plan with solid marketing and home office support."

Homberger, who joined Buddy's as president of franchising in 2008, and Buddy's COO Sal Moccia, have overseen Buddy's growth into the country's largest independent RTO with 92 stores, nudging out Dallas-based Bestway Rent To Own (78 stores). Buddy's is now the fourth largest RTO in the U.S. behind Rent-A-Center, Aarons and ColorTyme respectively.

Buddy’s has 58 company owned locations in Florida and South Georgia and 34 licensed stores throughout the southern United States.  License operated companies are expected to convert to the traditional franchise agreement over the next 7 to 10 months, Homberger said, and the Buddy's franchise model will continue to attract seasoned RTO operators who yearn for the opportunity to run their own business.

Though predicting store count in 2010 is difficult due to the large response from potential franchisees, he said, the year looks promising with several stores scheduled to open and lots of territory available.

The key is what Buddy's offers in the way of services including:

Start up tasks such as Business License, sales tax permits, comprehensive training, lease negotiations, full service purchasing, marketing, payroll, accounting, legal council support, HR support, auditing support, construction Support, IT support and additional services.

Buddy’s believes the company is poised for rapid growth. The corporate stores are based in Florida and South Georgia which leaves lots of desired areas available for growth. 

Buddy’s offers multiple options for RTO operators and investors with royalties ranging from 3.5 percent to 7.0 percent.

Franchise Fees are $25,000 for the first store with discounts based on experience up to $10,000. All future stores $15,000.

The base package royalty fee (similar to competitors) is 4.5 percent of total revenues and will reduce to 3.5 percent when 1 million dollars in revenue is achieved in a calendar year.

The “Full Boat” package is 7 percent of total revenues and includes significant additional services.

Buddy's intends to use traditional business financing avenues to finance new franchisees.

Current companies and operators include:
 
BREG RTO Ventures LLC – investor owned / operated by Chuck Haver
KS, AR, OK - 6 stores currently with a 7th stores planned in 2010.

ARKLATEX RTO ventures LLC – Investor owned / Operated by Dave Scarafiotti
TX, LA - 4 stores currently with a 5th store planned in 2010

West Texas RTO ventures LLC – Investor Owned / Operated by Adrian Rosales
TX - 4 stores currently with a possibly 5th location late 2010.

Preferred Sales and Leasing INC – Owned and operated by Todd and Lisa Homberger
OK – 2 stores currently with a possible 3rd location in 2010

PHX RTO Ventures LLC – Investor owned / Operated by Ron Taylor
AZ – 5 stores (Former Discover Rental Purchase purchased and converted in June 2009)

Synergy Sales and leasing LLC – Owned by Marty Beuk
NC – 6 stores currently with several planned in 2010 and 2011.

Duvall Rents LLC – Owned and operated by Lee Duvall
LA – 1 store currently

Shadowstone Investments LLC – Owned by Charles Cloud / Operated by Juergen Mildenberger
TN – 6 stores (Former American Rentals purchased and converted late September 2009). Additional store openings are planned.

For more information on Buddy’s Franchising contact Todd Homberger, president of franchising by email or at 972/890-4499 or Buddy's COO - Sal Moccia – 813/623-5461 ext 180.