Rent-to-own industry veteran Larry Sutton found success with an innovative approach to selling tires. Will his 'rent and roll' philosophy boost his company to national prominence?
The past 10 months have been big for Tampa-based RNR Tire Express.
The company opened its 100th store, in Sarasota, for starters. And it was named to the Inc. 5000 list of the nation's fastest-growing companies — its third time on the list.
Founder and president Larry Sutton, who says the “RNR” in the company name stands for “rent and roll,” spent years in the rent-to-own industry before he launched RNR Tire Express in 2000. Sutton, 66, says he saw a gap in the marketplace and sought to fill it by offering tires for sale on a deferred payment basis.
“Nobody knows when they're going to end up needing new tires,” Sutton says. “Fifteen years ago, you could go buy a decent set of tires for under $400. Today, if you're looking for a good set to last three to four years, you're looking at $700, $800, even $900. A lot of families just don't have that extra cash laying around or it's not a good time for their budget.”
An Oklahoma native, Sutton acknowledged he's shooting for the stars — taking on big national competitors like Tire Kingdom, Discount Tires and Tires Plus. “Our 10-year plan is to have 1,000 stores,” he says. “With the contracts and planning we have in place, we believe that number will be 300 in less than five years, and from 300 the next bounce is even going to be that much quicker.”
The company's revenue growth backs up Sutton's ambition.
Each store (most are owned and operated by franchisees, with the exception of 15 corporately owned stores) averages about $1.6 million in sales annually, with the top 20 hitting close to $2 million apiece each year. In 2016, total revenue among all stores exceeded $100 million for the first time, and Sutton projects that number to rise to $135 million when the book is closed on 2017. He adds that $150 million is an easily attainable goal for 2018.
A strength of RNR Tire Express is its ability to grow organically, without bringing too many new, untested franchisees into the fold. The company has just a handful of franchisees, three of whom account for more than half of the total stores. (Sutton says he fields plenty of calls for potential franchisees, mostly thanks to his appearance on the popular CNBC show “Blue Collar Millionaires.”)
Sutton says the RNR Tire Express concept — which, in addition to tires, also includes custom wheel installations — is particularly popular with father-son franchisee teams. “You know, the son has the interest, the father has the money. Also, our biggest franchisees have all re-signed for more stores when their first deal was up. Seldom does anyone not sign up for more stores.”
The self-deprecating Sutton might come across as a blue-collar millionaire, but he's sharp enough to see and seize upon the right opportunities. “Somebody once told me, 'If you ever want to be a success, just hire people who are smarter than you,” to which I replied, “Ma'am, that's going to be easy, I'm from Oklahoma.”
In the late 1990s, after selling his share of a rent-to-own company, Sutton found himself adrift. “I played golf for about a year until I got so bored I couldn't stand it anymore,” he says. He ended his quasi-retirement by buying a Tropical Smoothie franchise — a humbling experience, he says. “I found myself in a banana costume out on the street giving away free smoothies and thought, 'What am I doing here?'”
Sutton extracted himself from the smoothie business and studied the custom wheel industry, which he believed was “set to explode.” But he thought he could be even more successful by offering tires for sale on a three- to six-month payment plan. That idea led to RNR Tire Express.
“Entrepreneurs are all a little cocky,” Sutton says. “You always think you can do something a little different or a little better.”