RTOHQ: The Magazine July-August 2011

Complete issue of RTOHQ: The Magazine by APRO 

Rent-to-Own Families, Part IV by Kristen Card

Resolving Rent-to-Own Disputes by Ed Winn III

Rent-to-Own Family Reunion: A Recap of APRO’s 2011 Convention by Murlin Evans, Neil Ferguson and Shelley Martinek

The Brileys
Briley Investments, DBA Aaron's Sales & Lease Ownership | Abilene, Texas

Family rides the West Texas winds of challenge and change to achieve success, significance By Kristen Card

Once upon a time–circa 1974–Robert O. Briley was a brand-new graduate of Texas Tech University, with a political science degree in his hand and his eye on law school. Things change. Briley's professional path took an unexpected turn, leading him from a men's clothing store to a truck-stop restaurant to a Curtis Mathes franchise. Eventually–circa 1990–he did hang up his own shingle, but rather than reading "Esq.," it read "RTO."

Briley grew his Texas-based Rent City business to 16 stores over the next 16 years. And then he decided it was time for things to change again. "We had grown the business by opening up a store, achieving success with it and buying out our competition," Briley says. "But we found ourselves coming up against Aaron's more and more, and buying out an 1,800-store national chain wasn't an option."

So Briley, with the support of his wife, Lou, decided if he couldn't beat 'em, then he might as well join 'em. Once Rent City's conversion to Aaron's was complete in late 2006, the Brileys' company consisted of seven West Texas stores, with one more Lubbock location in the works.

"We're extremely happy with our decision to join Aaron's," Briley says. "The investment per store is much greater–in bigger buildings, a higher volume of inventory and about twice as many associates, but the supporting infrastructure is incredible. Aaron's system streamlines everything from ordering and tracking inventory to advertising and directmail marketing. They reduce the time you spend in those areas, so you can dedicate that time to leasing and collecting."

The Brileys' business is thriving under the power of the Aaron's name; for two of the past three years, Briley Investments has won both Aaron's Franchise of the Year and Store of the Year awards.

With the company going strong, Robert has been loosening his hands-on involvement in the business in order to serve elsewhere. Just re-elected as APRO president, he also was recently re-elected to the Abilene City Council and contributes to many area non-profit organizations.

"We want to be more than successful–we want to be significant," Robert affirms. "Doing for other people is what our industry does."

The company's daily operations are managed mainly by vice president of operations Terry Bilbrey, CFO Craig Shewmake, office manager Tracy Martin and accounts manager Berta Fernandez, as well as regional managers Penn Mallery, Scott Lunsford and Robert and Lou's younger son, Parker.

The couple's older son, Zach, has also been involved in the family business over the years. Born with spina bifida and hydrocephalus, Zach suffered a stroke at the age of two, has undergone 46 surgeries, is paralyzed from the waist down and requires medical attention every three hours. Yet many days, he accompanies his mother to the Brileys' impressive home office to work for the company and boost morale with his strong spirit.

"Our business has evolved and so has our family," Lou says. "Our children are now at a point where they want to be involved in our company and they offer newer, fresher ideas to benefit us. We are truly a family business in the business of helping families."

Q&A APRO President Robert O. Briley

At APRO's Convention and Trade Show in Little Rock, Robert O. Briley was elected by the board of directors to serve a second term as the association's president. Briley operates seven Aaron's Sales & Lease Ownership locations in West Texas and lives in Abilene. We asked him about the past year as president, the coming year and beyond.

Congratulations on your re-election as APRO's president. Tell us about the past year and your first term. What were the highlights and what were the primary challenges?

Most important, I am very humbled by the opportunity to serve our membership again this year. I am motivated to follow in the footsteps of our past presidents, who provided solid leadership, commitment, integrity, courage, persistence and optimism. I continue to be amazed by the high quality of performance, professionalism, promptness and attitude of our APRO staff led by Bill Keese. I'm excited about the years to come and the opportunities we have to strengthen our industry by working together.

The highlights are obvious. I'm proud of our industry for coming together again for another successful APRO Legislative Conference in Washington, D.C. The evening at the Folger Shakespeare Library was absolutely perfect. Our "Family Reunion" Convention in Little Rock was very successful–the ideal opportunity to network with one another and learn new ways to provide better services and products for our customers. The potential customer focus-group studies revealed a need to adopt changes to help promote our industry to the non- RTO customer base. I'm grateful to APRO and the state associations that hosted the focus groups–Florida, Ohio, New York and Texas–for their vision and leadership in implementing them. I'm proud of the association for providing aid through the RTO Disaster Relief fund, which was much needed this past year with severe tornados in several areas of the country. And speaking of the spirit of charity, APRO's Scholarship Foundation had an incredible year, with so many members making generous contributions. As a result, we provided 17 scholarships this year–a record number.

What do you want to see happen for APRO and the industry during your second term?

I want to have our entire industry work together and develop a strategy to expand our customer base and then implement that plan over the next few years. Our industry provides important services and products to our customers. Sometimes, we underestimate the impact we have on entry-level customers who are establishing credit, repairing credit and/or are unable or unwilling to make a long-term commitment to purchase.

Equally important, we want to pay close attention to the potential actions of the Consumer Financial Protection Bureau. I urge all association members, non-members and vendors to become even more persistent in helping to sign additional co-sponsors to the Consumer Rental Purchase Agreement Act (HR 1588 and S 881). Passage of this legislation will stabilize our potential to borrow money from banks and expand our customer base.

How do you view the state of the rent-to-own industry? What's changed since you started?

Our industry is very strong! We continue to have tremendous support from the APRO membership. Our state associations are improving year after year. The trust between small dealers, large chains, franchisees and the publicly held companies has improved. The cooperation of all members has improved dramatically, creating a powerful team. Participation in APRO's Legislative Conference and the annual Convention and Trade Show reflects the commitment of our members to our customers.

As Henry Ford said: "Coming together is a beginning; keeping together is progress; working together is success."

As for changes in the way we do rent-to-own business, of course computers have become an itegral part of our daily operations in so many ways. Credit card machines make it easy to process the automatic draft for rental payments. The variety and quality of merchandise is better. I'm most proud of our lifetime reinstatement policy, which reflects the integrity of rent-to-own dealers and their fairness to our customers.

What have you learned serving as APRO's president and also serving on the Abilene City Council?

I've learned a lot: 1) listen to constituents and members before making decisions; 2) be careful with your words; 3) be respectful to those with opposing views; 4) appreciate the journey; and 5) service to your community and industry is important. I like to remind myself that we are all successful in different ways, but we cannot become significant in the eyes of our Lord until we do something for someone else.

Why do you think rent-to-own has so many family-run businesses?

Most small businesses get started on a shoe-string capital investment. For most of us, all we have to offer in our early years is our willingness to work long hard hours. The cheapest labor pool is our family members–low pay and long hours. Seriously, we can count on family members to care more about the business, risks, consequences of failure and rewards of success. The family unit is already an established team and teamwork is the key to success. In reading the RTOHQ: The Magazine profiles this year, I've noticed that the family dynamics are all different, but all successful.

Regarding federal legislation pursuits, what do you tell non-participants in the legislative process to get them inspired to be involved?

We need your participation to protect our right to do business throughout the United States. You never know what industry member might be the contact who secures our future. You don't have to understand politics, but just tell legislators your rent-to-own story and your desire to serve a customer who just needs a chance to get started.

Who inspired and/or inspires you in our industry and why?

The people in our industry: customers, associates, vendors, founding fathers and owners. People coming together as a team and focusing on our customer service.

How do you find time to balance all of your responsibilities as APRO president and a city council member while maintaining a sense of family?

Balance is my life goal. Support for our associates at work, service to our industry and to APRO, service to the community that I have lived in for more than 50 years, service and giving to my church, service and donating to United Way and other non-profits and, most important, time with my family. All of this can't be accomplished every day, but each day is a new opportunity to attain the goal of balance.

The Fishers
Mustang Enterprises, dba Home Town Rental Purchase | Arkansas City, Kansas

Heartland company extends concept of family far beyond blood for business success By Kristen Card

Jess Fisher believes in birth order. He readily recognizes that had he not been the eldest of eight growing up in southern Kansas, he probably would not be where he is today–leading his family business, Home Town Rental Purchase (www. hometownsaleslease.com).

"You learn at a young age to begin watching over your younger siblings," Jess says. "Because of that, I grew up being a more responsible and, I think, more compassionate, person. So at the company–with family and with other associates– I'm still the overseer, the teacher. I'm still the big brother."

Jess already had over a dozen years of retail experience when he accepted a position in 1992 with ColorTyme in Arkansas (pronounced not like the state name, but as "R-Kansas") City, Kansas, under a store manager named Gayla. Eventually, Jess left ColorTyme to return to retail appliance sales, but Gayla–now his new bride–and rent-to-own had both taken hold.

"I approached the owner of the appliance store about letting me open a rental department in the store," Jess recalls. "He agreed and within two years, Gayla was helping me run the rental section and we were making more money for the store than the retail side."

By 1999, the couple was ready for a change. Approached by an investor about owning their own business, the Fishers took the plunge and opened up the first Home Town in their own hometown that May. "My dad and my brother– John Fisher Sr., and John Fisher Jr.–started working with us part-time," Jess says. "In 2000, our daughter and son came on board."

The following years were filled with new store openings and new family hires. Today, there are five Home Town locations in southern Kansas and northern Oklahoma and of the company's 25 employees, nine are family members: Jess, co-owner; Gayla, co-owner and–according to Jess–still his boss; John Sr., company-wide maintenance; John Jr., district manager; daughter Kristy Crane, office manager; another daughter, Michelle Beach, marketing and training; sister Mary Folk, assistant store manager; and nephews Josh Kendrick and Kyle Russell, accounts and deliveries.

"I was never a big fan of working with family until I actually began doing it," Jess admits. "Now, we encourage an environment that is family-oriented through and through. Our motto is, 'We're helping local families as only a local family can.' Treating other families–associates and customers alike–as part of our own family has definitely been key to our continuing success."

Serving smaller communities–all five of the towns where the company has a location have a population of 30,000 or fewer–helps magnify that family feeling through tighterknit clientele and has helped insulate the company from the besieged economy. With more new-store plans underway and a new generation beginning to express interest in the family business, Home Town continues to grow toward its current goal of 10 stores–and potentially beyond.

"Many people don't like being around us after-hours, because the shop talk never stops," Jess chuckles. "Our family never stops talking about the business because we still have such excitement about it. Rent-to-own is like no other industry and it's not just our livelihood; it's a way of life."

Ron Zimmerman and Reta Bailey
Entertainment Products, DBA Al's Rent To Own | Irving and Paris, Texas

Siblings work together–yet apart–to fulfill their father's vision of a family business By Kristen Card

"My dad was raised during the Depression, so he knew what a dollar meant," begins Ron Zimmerman, owner-manager of Al's Rent To Own in Irving, Texas. "He was a talented salesman and a great teacher, and he definitely had the vision for his children to be involved in the business, to give his children a means he hadn't had."

Al Zimmerman–the Al behind Al's– had five children who grew up mostly in California with their mom while he grew a business, slowly but steadily, on Main Street in Irving, just west of Dallas.

"He opened Al's Stereo & TV in 1967," his son, Ron, relates. "Around 1971, color televisions became the trend. Curtis Mathes was on Young Street here in Dallas, so my dad would go over there and buy one color set, bring it back to his store and when he eventually sold it, he would go back and buy another. He built his business just like that– sell two, buy three."

Ron had spent summers with his dad and in 1973, came to help with the business and never left. The company converted completely to rent-to-own in 1979 and by 1989 had grown to seven locations.

Al decided it was time to pass the business along to the next generation and offered a store to each of his children–four now, as one had passed on. Two opted out, but Al's daughter, Reta Zimmerman Bailey, relocated for the opportunity to run the company's Paris, Texas, location, about 200 miles northeast of Dallas.

"The cost of living in California was skyrocketing," Reta says. "So I came to Paris mainly because it was cheaper. And I just love this business. I love the people and I love what I do."

Sadly, Al died unexpectedly the same year. Once company matters were settled, Ron's Irving location and Reta's Paris store were what was left–and 22 years later, they're still going strong. Though they operate their stores wholly independently, the two talk several times a day about everything from effective marketing efforts to product popularity to customer challenges.

"We've got a lot in common because we're living the same professional life," Reta explains. "We have a deeper understanding, a different sort of bond, and I think it makes us closer as siblings."

Both Ron and Reta are in their stores every day, each working alongside three employees. When asked separately about the secret of their longtime success, they both provide the same answer: fairness and service.

"I buy only things I would put in my own house; if it's not good enough for me, it's not good enough for my customers," Reta affirms. "And we never take care of it tomorrow. If someone calls, it's because they need help now, not later."

"It is not necessarily about the merchandise; it's about what we can do for our customers," Ron says. "And for me, it's not necessarily how much money we make; it's what I enjoy doing. If you have fun with the customer and they know you're going to do what you say–come heck or high water–then why should they go anywhere else?"

Resolving Rent-to-Own Disputes
By Ed Winn III

Rental dealers are confronted daily with their fair share of disputes with other people. Management consultants may call these situations "opportunities." They are disputes. They arise with employees, customers, vendors and, if it is a really bad day, with the government–maybe the state attorney general's office, the BBB or the IRS. Most disputes get talked out and resolve themselves. Since we live in allegedly civilized times, instead of reaching for dueling pistols, the disputants reach for their cell phones and call their lawyers. § Recent developments are changing the landscape of dispute resolution for rental dealers and all other merchants. The change involves the less-than-spellbinding topic of pre-dispute arbitration provisions in contracts–certain to numb the senses of all but the most attentive legal geeks. Here goes, anyway, because it is an important topic and can save rental dealers time and money. § Last April, the U.S. Supreme Court decided a case, Concepcion v. AT&T Mobility. In the 5–4 decision, the court ruled that AT&T's mandatory arbitration provision in its cell phone consumer contract–which included a class-action waiver–was enforceable despite decisions to the contrary by state supreme courts and U.S. Ninth Circuit Court of Appeals.

Some Background

Consumer advocates have long lamented the very possibility of any mechanism, such as arbitration, that deprives consumers of their day in court and, more importantly, prevents them from participating in class-action lawsuits, the only way, they claim, to keep businesses honest, which is not their natural inclination. The right to go to court is, after all, enshrined in the Seventh Amendment to the Constitution: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved..."

Likewise, consumer advocates maintain that the ability to sue as a member of a class is vital to protecting consumer rights in the marketplace when the damages for any one consumer may be small, but the damages to fairness in the marketplace and ultimately to the society are large, because many people are damaged without recourse unless they can participate in class-action suits. In agreeing to arbitration in a contract, consumers must waive both their constitutional right to their day in court and also their common-law right to participate in class actions. Consumer advocates are always wary when consumers are asked to waive their rights to anything.

Businesses counter that allowing class actions skews the judicial playing field, which fundamental justice demands be level, in favor of consumers and plaintiffs' attorneys. Plaintiffs with marginal or even bogus claims can file class-action suits with thousands or even millions of class members and extort settlements from defendant companies, because the companies cannot afford the costs of defending such suits. Often, settlements in class actions involve consumers getting coupons for discounts from the defendant company while the consumers' attorneys get millions of dollars in legal fees.

Businesses have long used arbitration provisions in employment contracts and, to a lesser extent, in their contracts with consumers. Courts in a number of states have struck down these provisions as unconscionable, insisting that the parties take their disputes to court. With or without getting a class-action waiver, many businesses deem arbitration to be a fair, efficient and relatively inexpensive process for resolving disputes.

Consumer advocates are suspicious of arbitration in any guise, because, among other reasons, the role of arbitrator is a paying job and most of the business in a merchant-versus-consumer dispute will come from the merchant. That means there is a bias built into the system that cannot be overcome even with the best of intentions– the repeat-player bias.

The NAF Settlement

Evidence of this kind of bias reached an apex in 2009 when the Minnesota attorney general exacted a settlement from the National Arbitration Forum (NAF), one of the three national arbitration companies at the time. In the settlement, NAF agreed to get out of consumer arbitration altogether forevermore. The attorney general had sued NAF alleging bias and deception.

NAF, a for-profit company, had been one of the largest consumer arbitration groups in the country with arbitrators available in every state. The attorney general alleged that in 2006 and 2007, a family of hedge funds bought controlling interest in NAF and also a controlling interest in a national debt-collection agency, Mann Bracken. Evidence showed that in 2006, NAF handled 214,000 consumer- debt-collection arbitrations, 125,000 of which had been filed by Mann Bracken. The evidence of bias was overwhelming, which is why three days after the attorney general filed suit, NAF settled and got out of the consumer arbitration business completely (see http://domestic policy. oversight.house.gov/documents/20090721154944.pdf). In the aftermath of this NAF scandal, the American Arbitration Association (AAA), a non-profit company and the largest arbitration group in the country, announced that it would not hear any more consumer-collection arbitrations pending the adoption of adequate standards for the process. Shortly thereafter, Bank of America announced that it would no longer seek to use arbitration to resolve collection disputes with its banking customers despite the mandatory arbitration language in all of the bank contracts. Understandably, mandatory consumer arbitration fell into disfavor after the NAF settlement and rent-to-own dealers and other merchants abandoned arbitration with consumers.

Concepcion

The vitality and usefulness of mandatory consumer arbitration provisions continued to wane–and then along came the Supreme Court's ruling last April in Concepcion v. AT&T Mobility. AT&T advertised "free" cell phones for customers who signed up for the company's cell phone service. However, AT&T billed consumers sales tax on the full retail price of the phone in the first bill. For the Concepcions, the tax was $30. The Concepcions sued AT&T in California's federal court for false advertising and fraud on behalf of all consumers who had been charged sales tax on their phones. AT&T countered that as per the cell phone service contract, the parties had to arbitrate the dispute and no class action was permitted.

The California Supreme Court had previously ruled that mandatory consumer arbitrations provisions were unconscionable and therefore unenforceable when three factors exist: 1) the contract is one of "adhesion," meaning that the stronger party presents the contract on a "takeit- or-leave-it" basis to the weaker party who has no ability to negotiate the terms. (As a practical matter, several jurists have noted that all consumer contracts these days are contracts of adhesion.); 2) the amount of damages the consumer can recover is small; and 3) the weaker party alleges a deliberate scheme to defraud by the superior party.

AT&T argued that the Federal Arbitration Act (FAA), enacted in 1925 to counter judicial hostility to arbitration at the time, controlled and overruled state law. The stated goal of the FAA i s to "ensure the enforceability of a rbitration proceedings...to facilitate informal, streamlined proceedings." The FAA provides that parties to a contract can agree to arbitrate disputes before or after the dispute arises. An arbitration provision must be treated like any other contractual provision. It can be invalidated under any legal theory that exists to challenge any other kind of contract–e.g., fraud, duress, unconscionability, etc.–but it cannot be singled out for special treatment that makes an arbitration provision harder or easier to enforce than any other kind of contract.

The district court in Concepcion held that the AT&T arbitration provision was unconscionable and unenforceable because it was a fraudulent scheme to bilk small amounts of money out of a large number of consumers. The Ninth Circuit Court of Appeals agreed. The Supreme Court reversed the lower courts, overruling the California Supreme Court, holding that the AT&T arbitration provision was, indeed, enforceable and the only avenue available to the Concepcions to resolve their $30 dispute with AT&T.

The AT&T Arbitration Provision

Arbitration is a matter of contract law. That means the language in the arbitration agreement will determine its enforceability. The AT&T arbitration agreement contained several provisions that the court noted where AT&T bent over backwards to make the process a fair one for aggrieved customers.

AT&T made it easy to file a complaint against the company and initiate arbitration proceedings with short, onepage forms on its website (see www.ATT.com/disputeresolution).

AT&T agreed to pay all costs associated with a nonfrivolous filing by the customer. Ordinarily, anyone filing a lawsuit must pay the filing fees, which can be a few hundred dollars. One of the criticisms in the past about arbitration was that it costs more to start an arbitration than it does to start a lawsuit and thus was an unfair burden on consumers with a dispute against a company.

AT&T agreed that the arbitration would occur in the county where the customer is billed. One reason cited by courts for throwing out arbitration clauses is that the forum is an inconvenience. Some companies liked to require arbitration near the company's home office for the ease of administration. Courts have ruled over the years that for consumer arbitration to be fair, the locales must not be inconvenient for the consumer. Courts have reasoned that it is unfair to make the consumer travel long distances to enforce a claim when the company is better able to shoulder that burden. This is a different rule from the general jurisdictional rule for the legal system that a plaintiff must sue a defendant where he lives.

In the AT&T arbitration provision, if the customer's claim was for less than $10,000, the consumer can elect to have the arbitration conducted by telephone, in person at a face-to-face hearing before the arbitrator or by the submission of documents only.

The AT&T arbitration provision allowed either party to sue in small-claims court instead of going to arbitration. Smallclaims courts have jurisdictional limits of anywhere from $2,500 to $15,000, which means that a claim for more than that amount cannot be brought in that court and, in any case, that court does not have the authority to award damages greater than its jurisdictional limits. This provision allowed AT&T to sue customers on small balances due on their accounts without invoking arbitration. Such a provision would allow rental dealers to seek recovery of their merchandise through the courts instead of having to arbitrate.

The AT&T provision permitted the arbitrator to give any kind of individual relief that a court could award, including damages awards, injunctive relief and punitive damages. This provision ensured that an individual claimant has the right to the same relief available in a court.

The AT&T provision provided that if it was successful in the arbitration and the customer lost, the company would not seek reimbursement of its own attorneys' fees, even if state law would permit such a recovery.

Finally, the AT&T provision provided that if the customer receives an award from the arbitrator that is greater than AT&T's last written settlement offer, AT&T will pay the award granted or $7,500, whichever amount is greater plus two times the claimant's attorneys' fees.

This last provision caused the district court judge to note that "plaintiffs were better off under their arbitration agreement with AT&T than if they had been participants in a class action that could take months, if not years, and that may merely yield an opportunity to submit a claim for recovery of a small percentage of a few dollars."

Arbitration in RTO Agreements

The upshot of the Concepcion ruling is that mandatory consumer arbitration has been fully rehabilitated in the aftermath of the NAF scandal in 2009. The law in the U.S. favors the arbitration of disputes. Rental dealers should already have arbitration provisions in their employment agreements and they should consider adding them to their rental agreements. A separate arbitration addendum or another clause in the rental agreement itself–either will work–will add to the length of the agreement and may make closing occasionally more difficult. The advantages, however–including the elimination of the threat of a class-action and that arbitrations generally are quicker, easier and cheaper than going to court–outweigh the disadvantages to the process of including such a clause.

Dealers should consider having an opt-out provision in the arbitration agreement, allowing the customer an opportunity to send in written notice that he does not want to arbitrate disputes with the company and would prefer going to court in such an event. Put a reasonable time limit on the customer's ability to opt out; companies in other industries offer a time limit of between two weeks and two months.

There are other suggestions for ensuring that mandatory consumer arbitration provisions are fair to the consumer. Dealers should scrutinize the Consumer Due Process Protocols that have been developed for consumer arbitrations and incorporate as many of those provisions as possible in their agreements (see www.adr.org/education/ education/consumer_protocol.html).

It Is Never Over

As gratifying to the business community, generally, as the Concepcion decision is, the battle, alas, is not over. Already, there have been two bills introduced in Congress that would overturn Concepcion and essentially outlaw mandatory consumer arbitration (The Arbitration Fairness Act of 2011, HR 1873 and S 987). Moreover, Section 1028 of the Dodd-Frank Act instructs the newly created Consumer Financial Protection Bureau to study mandatory consumer arbitration provisions to determine if they are anti-consumer. The bureau has been granted the authority to ban consumer arbitrations altogether or to regulate them as the bureau may see fit if, through its study, it determines that such a ban or regulation is in the public interest and for the protection of consumers.

Despite these future challenges, for the moment mandatory consumer arbitration has the imprimatur of the highest court in the land. Dealers would be well advised to investigate this issue thoroughly to determine if it makes sense to add such provisions to their agreements with their customers.

Is Arbitration Really Unfair to Consumers?

Consumer advocates instinctively think arbitration is unfair to consumers and have condemned the Concepcion decision as a legal disgrace. However, empirical studies of the results of arbitration proceedings belie the emotional outbursts of these advocates and call into question their sentiments. Ernst & Young published a report in December 2004, Outcomes of Arbitration: An Empirical Study of Consumer Lending Cases. Based on four years of data, the findings included one that consumers prevailed in 55 percent of the cases decided by arbitration, the same win rate as in state courts (http://adrinstitute.com/edit/ Feb_05/022105EYPressReleaseADR.htm).

In 2009, the Searle Civil Justice Institute of Northwestern University School of Law published a study of the American Arbitration Association's consumer arbitrations (www. searlearbitration.org/report). Among the findings, the study found that up-front costs for arbitration were low–$96 for claims less than $10,000 and $219 for claims between $10,000 and $75,000. Arbitration was a quick way to resolve disputes with an average resolution time of 6.9 months. Consumers won 53.3 percent of the cases filed with an average recovery of nearly $20,000–52 percent of the amount claimed.

The facts seem to be on the side of arbitration. Conducted property, arbitration has as good a chance of getting the right answer in a dispute as a judge and jury.

Family Reunion
By Murlin Evans, Neil Ferguson and Shelley Martinek

This July in Little Rock, APRO held its annual convention. Yes, there was a trade show, too. But it was really a rent-to-own family reunion, where dealers and vendors from all parts of the country gathered to celebrate the kinship of colleagues. As we have reported all this year–and will continue to profile through 2012– family-run businesses are a cornerstone of rent-to-own, with plenty of mom-and-pop companies also employing sons, daughters, brothers, sisters, cousins and other DNA-sharing personnel. At Little Rock's duckfriendly Peabody, we all became one big, happy family during APRO's 2011 Rent-to-Own Convention and Trade Show, July 11–14.

During the annual Awards Banquet, Mark Speese was accompanied on stage by his wife and daughters–as well as his Rent-A-Center brethren–to accept the Ernie Talley Lifetime Achievement Award. Cynthia Baber-Strunk, Richard Rose and Sidney Burton also brought family members to the party where the industry's highest honors were bestowed upon them. To do the honors of presenting honors, APRO President Robert Briley was joined on stage by his wife, Lou, and son Parker, as well as Roger Sharp, APRO's first Rental Dealer of the Year recipient. During the general session, RNR's Larry Sutton took the stage to promote APRO's Scholarship Foundation and was joined by his sister, Judy Garrison, and cousin, Jamie Slatton. In short, rent-to-own families were in abundance–and, perhaps a bit unusual for a family gathering of this size, everyone got along!

On the following pages, check out our family photo album, see who was honored and learn what was taught by business experts at APRO's big show in Little Rock–where relativity was more than just a theory.

APRO's Family Reunion provided four primary attractions: a trade show, education, recognition of industry achievers and, perhaps most important, socializing. This year's Gala at the Clinton Presidential Center was one classy event, where networking combined with reviewing an abundance of historic memorabilia.

APRO held its President's Welcome Reception on the opening night of the convention. APRO President Robert Briley honored distinguished state rental dealer associations and those members who have gone the extra mile over the past year to protect and nurture our industry's legislative pursuits. In addition to the honors pictured in this scrapbook, Continued Excellence recognition was given to state associations representing Delaware-New Jersey, Florida, Indiana, Iowa, Kentucky, Missouri, New York, Ohio, Pennsylvania, Tennessee and Wisconsin.

The annual Awards Banquet and Reception was the evening for honoring the industry's finest with "Buddy" awards for Lifetime Achievement, Rental Dealer of the Year, President's Award of Excellence, Heritage Award, Vendor of the Year and State Association of the Year (see page 36 for details). Attendees also hit the dance floor for some "Crocodile Rock" and other hits by a superb Elton John impersonator, Jeffery Allen. Elton-esque glittering sunglasses were provided to enhance the prevailing spirit of the 1970s.

In addition to individuals and groups receiving due recognition in Little Rock, advertising got its props as well. APRO's Rental Advertising Excellence Awards were on display in the exhibit hall, showcasing the finest rent-to-own advertising, marketing and community relations over the past year. "Best of Show" honors went to Countryside Rentals/ Rent-2-Own (in-house division) and Razor (agency division for Rent-A-Center). For a complete list of the 2011 RAE Award winners, visit www.rtohq.org/pdfs/RAE2011winners.pdf.

APRO's 2011 Rent-to-Own Trade Show showcased the latest in consumer electronics, software, asset management systems, furniture, appliances, jewelry, marketing and more at Little Rock's Statehouse Convention Center. When not on the trade show floor or socializing and networking, rental dealers likely were getting smarter. A new Innovation Marketing Session offered attendees an industry-specific plan to attract new customers. A motivating keynote address and an afternoon of seminars provided rental dealers in Little Rock with tools to help their businesses. William Taylor's keynote, "Practically Radical: Unleashing Big Changes in Tough Times," urged attendees to break the mold, go for the gusto and forge a more daring path for future success. APRO's popular Rental Roundtables gave colleagues from comparatively sized companies the opportunity to share information and business tips that they could take home to their stores.

The annual Awards Banquet celebrated the industry's finest, inducting into the Rent-to-Own Hall of Honor the 2011 recipients of the Lifetime Achievement Award, President's Award of Excellence, Rental Dealer of the Year, Heritage Award, Vendor of the Year and State Association of the Year. In keeping with the Family Reunion theme, many recipients brought their kin on stage with them to accept their awards and APRO President Robert Briley presented the awards with the help of his wife, Lou, and son Parker.

RTO Customer of the Year
Vivian Saunders, Bestway rent-to-own, Ahoskie, North Carolina

A North Carolina RTO customer contributes substantially to her community and testifies in Washington, D.C., on behalf of the industry By Richard May, Murlin Evans and Neil Ferguson

BestWay Rent To Own customer Vivian Sanders of Ahoskie, North Carolina, has been named APRO's 2011 Rent-to-Own Customer of the Year. The association awards this honor to an RTO patron who inspires and sacrifices to improve his or her family and community. Saunders does so with relentless energy and enthusiasm.

She is executive director of The Hive–an alternative charter school she founded in rural Bertie County, North Carolina–and she also serves as the director of two community centers that provide everything from a food pantry to a computer lab, job training and drug-rehabilitation counseling.

The Hive–a much-needed program in a county where 46 percent of those who enter high school do not graduate–opened in 2009 in partnership with the Bertie County School System and One Economy, a non-profit organization that provides vital information through technology to under-served communities. The school enrolls approximately 50 atrisk sixth- through 12th-grade male students, providing an all-day safe haven that prepares them not only for graduation, but also helps them to be effective in the workforce, offering technical, life and study-skills training.

Unfortunately, the school has fallen on hard times due to cuts in the state's education budget. The Hive is short $250,000 to continue operating for the upcoming school year, Saunders says. During the association's Awards Banquet in Little Rock, APRO members spontaneously pledged $28,000 toward Saunders' cause, which will allow the program to proceed, even if temporarily.

"I want this school to be a turning point," Saunders says, "a place where I would provide everything they need in terms of food and shelter and would offer something that no dollar amount can: the love and support of a mom."

Saunders operates The Hive from dawn to dusk, cooking meals and providing afterschool and weekend instruction for the students and other community residents. Her school is the subject of a soon-to-be-released feature film, The Discarded Boys, produced by acclaimed filmmaker Robert Townsend.

In addition to inspiring her community, the rent-to-own industry and filmmakers, Saunders traveled to Washington, D.C., recently to inspire lawmakers. Just a few days after being honored in Little Rock, she spoke before the House Subcommittee on Financial Institutions and Consumer Credit during a hearing on the Consumer Rental Purchase Agreement Act, a bill that would regulate the rent-to-own industry (see page 5). House members wanted to hear directly from a rent-to-own customer about her RTO experience.

During the hearing, Saunders expressed gratitude for rent-to-own, detailing how it helped furnish her home when no other retail outlet would consider doing business with her. She told the committee how rent-to-own came to the rescue this past spring after a number of homes in Bertie County were destroyed by devastating tornadoes. Many families were displaced, their homes in ruins, and they used rent-to-own for short-term needs until their homes could be rebuilt, Saunders testified.

Saunders' substantial good deeds in Bertie County clearly are cause for due recognition. "What she is doing for the community sends chills up your spine," says BestWay coowner Jonathan Rose. "There are a few angels out there among us and she is one of them."

RTO Employee of the Year
Donna Fally, Rent one, Mt. Vernon, Illinois

Rent One's Donna Fally demonstrates a tireless devotion to her community, helping educate, build, provide shelter and nurture compassion for others By Murlin Evans

Donna Fally is not the kind of person content to leave her job for the day as Rent One's corporate financial manager, head home and spend quiet evenings on the couch. In fact, it is Fally's tireless concern for her Mt. Vernon, Illinois, community–and her numerous activities in many organizations– that have earned her APRO's 2011 Rent-to-Own Employee of the Year award, the first woman ever to win this prestigious recognition.

"I usually have a lot to say, but right now I'm speechless," Fally said upon learning that she had won the honor. "[Rent One] is a wonderful organization that really gives its employees the opportunity to be out there doing things."

Fally won an all-expenses-paid trip to APRO's Rent-to-Own Convention and Trade Show held July 11–14 in Little Rock, Arkansas, where she was presented the award during the association's General Session. "If there is one thing I can say up here," Fally told the audience of rent-to-own professionals, "it's to remind you to be grateful for what you have and remember to try to give a little bit back."

Fally has been giving back for years. She is a 16-year member of the Rome Community Consolidated School Board. In that position, Fally has participated in implementing a number of instructional and technological advancements in the district. Currently, she serves as the board's vice president and previously served two terms as president, overseeing extensive school district building renovation projects.

She is a longtime volunteer for the United Way of South Central Illinois, serving in half a dozen positions there, including seven years on the United Way board of directors. Fally is an officer with the Jefferson County Habitat for Humanity, where she has been treasurer for seven years and has helped build 13 homes. She enjoys cooking meals for the Habitat crews when a home is being built.

Also, she has served on an organizing committee that is developing a homeless shelter for Mt. Vernon. It is one of her proudest accomplishments. "People are finally beginning to realize that many are facing tough times," Fally says. "There is no reason for a family to be living in a car. This shelter will provide them with the dignity and security of a roof over their heads and something to eat [and they] can take advantage of some of the other tools we'll offer to help them get a job."

"Donna likes to keep a low profile, but we're going to blow her cover and recognize what a tremendous impact she has on her community," says Rent One owner Larry Carrico. "These are the stories we really want to tell about our industry to encourage others to do more. Donna doesn't just talk the talk, she walks the walk and is usually the first one there to do it. She's also a great cook and nary a person goes hungry at our events."

"You can always count on Donna for a smile, a hug and that warm heart that's wanting to change lives," says Tyler Brown, assistant superintendent for Mt. Vernon city schools. "She is definitely looking out for the interests of our kids and our parents and is trying to make a change in their lives through education."

During APRO's General Session in Little Rock, a video tribute featuring Fally's colleagues and friends was presented. It can be viewed by visiting www.rtohq.org/video-Donna_Fally.html.