Hiring - APRO

The value of loyalty + Rent-to-own inspires a new trend + APROfile: Aaron’s Mike MartinTHE OFFICIAL VOICE OF THE RENT-TO-OWN INDUSTRY | FEBRUARY–MARCH 2008HiringPracticesand the Debate overimmigrationNew regulationsare bringinghiring practicesunder increasedscrutiny, causingsome businessesto falter. Learnhow to avoid thelegal pitfalls whenbringing on newemployees.

Need Money ToYou may have a wonderful independent RTO store that you have invested an enormous amount of sweat equityinto to make it what it is today...but you continually come up short with the necessary time and money to buildrevenue and grow your business. That’s where ColorTyme excels. We empower the independent operator lookingto grow, an experienced multi-unit manager ready to put that knowledge to work for themselves, or an investorlooking for a great return on investment.Not only is ColorTyme the 3rd largest rent-to-own chain in the country, but 100% of our focus is on our franchisecommunity to share best business practices, and provide the right systems, marketing and training models tohelp them succeed. That’s why our motto is “People Helping People”.ColorTyme has a network of more than80 franchise owners. Since 2005, wehave converted 10 rent to own stores to aColorTyme franchise.Partners Steve Dami and Zach Routh,former Rent-A-Center (RAC) districtmanagers, bring more than 26 yearscombined experience in rent-to-own totheir franchise. The partners signed adeal with ColorTyme because of theirfamiliarity with ColorTyme’s businessmodel and the low start-up costsassociated with ColorTyme stores.“ColorTyme offers a phenomenal deal for franchisees,” Dami said. “Wehave the freedom now to get the products our customers request,whether it’s a lawn mower or a flat screen TV. It’s such a reward to seea customer pay for a piece of merchandise they couldn’t otherwiseafford. That responsibility and success rolls over into other areas oftheir lives and I’m thrilled to provide that kind of opportunity for ourcustomers.”The partners both achieved top performer status with RAC beforeleaving the company, and plan to use their same motto for successin their ColorTyme franchise: “Customer service is everything. If wesay we’re going to do it, we’re going to get it done no matter what ittakes,” Routh says.“We want our customers to know how much we care for and respectthem,” he explains. “We look forward to building relationships with ourcustomers, rather than having a quick 30-second visit with a hello andgoodbye. When we see them once a week for their payments, we wantto know when their son wins a ball game, and when their daughter hasa ballet recital.”Here are just some of the ways we can help you:√ Top name brand product purchasingpower√ 100% inventory financing√ Dedicated sales associate tocentralize all product purchasingand questions√ Payday Loan program and capitalfinancing√ The RTO industry’s best nationalproduct service program√ State-of-the-art training programsfor owners, store managers andsupport staff√ Fully integrated advertisingpromotions and marketing materialsto support all aspects of yourbusiness√ Access to a large RTO skip databaseZach Routh & Steve Dami, Franchisees

Grow......And Still KeepYour Independence?“After working in the RTO industry for morethan 20 years, I knew I wanted to be inbusiness for myself. Partnering with successfulColorTyme franchisee Mike Houseworth wasa great experience which opened a door forme to go solo. However, I wasn’t completelysure if rent-to-own was the type of businessI wanted. So, I took a break to explore other opportunities. Thisis how I learned that when rent-to-own is in your blood, it stays inyour blood. After my wife, Lisa, and I carefully investigated otherRTO franchise opportunities, we came to the conclusion thatColorTyme is head and shoulders above the rest. The ColorTymesystem gives you an opportunity to become a partner and pavesthe way for you to go out on your own. With Pat Sumner and BobBloom, there are no hoops to jump through, no red tape. Pat isnever far away. Even during my break, he checked in with meregularly to address any questions or concerns I may have had.Colortyme provided the vehicle necessary for me to get going. InJuly, my wife came with me to the ColorTyme National Convention,she loved the fact that we were welcomed like family and that theColortyme family is supportive of each of the franchisees. Thatwas the icing on the cake.”- Mike Gavida, Franchisee“When I started in rent-to-own inOctober of 1986, I had no priorexperience, but my family has alwaysbeen in retail furniture. I’m a fourthgeneration furniture retailer so movinginto rent-to-own was a natural fit.Because I wanted to grow the businessand include more stores, I convertedmy original rent-to-own business to ColorTyme knowing that thenational recognition that the ColorTyme name held would help mebe able to do just that. Not many rent-to-own companies offerfranchising options and of the ones that do, I knew ColorTymewas the best deal. They have the best program for franchising.We’re very conscious of customer service here, and ColorTyme isa great name. If our customers need something, we’ll find a wayto do it.”- Don Hinton, Franchisee“I was a store manager for Rent-A-Center, but I really wanted to work formyself. With ColorTyme’s franchisingopportunities, you don’t have tobe a millionaire to be a franchisee.The support and the interest fromColorTyme was phenomenal andthey’ve done everything they said theywere going to do in a timely manner. They’ve supportedme every step of the way. I even went and talked with aColorTyme franchisee in a nearby town and he listed themistakes he made when he first opened - that has helpedme a lot. With my first store opening, I’m looking forwardto being able to help our customers by providing qualityproducts and great service. I can hold my head up highabout that. Each time someone walks in the door, the owner– me – will be there to say hi.”- James Stephens, FranchiseeFor more information ortestimonials, please visitfranchise.colortyme.comor call Jim Deering today at(800) 608-8963.(All calls are confidential.)Associate Member since 1992

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ProgressiveRentalsFebruary–March 200820 | Hiring Practices andthe immigration debateFaced with a dwindling supply of availableworkers, you may be among the manyemployers looking to fill your ranks withforeign nationals. But government rulesare changing and hiring practices arebecoming a bit trickier to navigate.By Phillip M. Perry30 | Looking for loyaltyin all the right placesA book written a dozen years ago titledThe Loyalty Effect: The Hidden ForceBehind Growth and Profit still offersvaluable insights about employee loyalty,customer retention and the pursuit ofprofit. If your company is suffering theeffects of high employee turnover and arapidly churning customer base, thistome might be worth a read.By Bud Holladay34 | Fractional ownershipThere is a new trend among the affluentand upper middle class societies calledfractional ownership and it’s taking its leadfrom rent-to-own. Be it cars, yachts, jets oreven handbags, the well-to-do are findingthat the rental plan is the way to go.By Geoff Williams38 | Mike martin andthe next generationWith a little push from his father, MikeMartin went into the rent-to-own businesson New Year’s Eve in 2002 with an Aaron’sSales and Lease Ownership franchise. Forthis former record-label-exec-turned-ITconsultant,it was the most memorableway to celebrate a new year.By Kristen CardDepartments7 | Noteworthy18 | Thinking RTO by ED WINN III46 | Who’s who inMiscellaneous RTOServicesCover IllustrationBy Larry GoodeFEBRUARY-MARCH 2008 3

Association of ProgressiveRental Organizations’RTO EmployeeDisasterRent-to-own families helpingfamilies of rent-to-ownIn 2005, members of the Association of Progressive Rental Organizationscontributed more than $190,000 to help rent-to-own employeesget back on their feet after the devastation caused by hurricanesKatrina and Rita. The rent-to-own community helped 159 employeesrecover from these natural disasters. Unfortunately, natural disastershave become all too common. The rent-to-own industry must be readyto help whenever a natural disaster occurs that affects our family ofemployees.relief fundTo address such needs, APRO has established a permanent disasterrelief fund: RTO [Relief To Our] Employees Disaster Relief Fund. Everydollar raised will go directly to rent-to-own employees in need. RTO EmployeesDisaster Relief Fund organizers are asking every rent-to-owncompany owner to implement a voluntary payroll-deduction plan withinhis/her company—suggesting a small donation per month from eachemployee. We ask that each company match its employees’ monthlycontributions. APRO can provide you with a template for paycheckstuffers to encourage your employees to participate.Rent-to-own has always been a family of generosity. Please contributeto the RTO Employees Disaster Relief Fund and encourage your employeesto do the same. A small contribution will make a big difference.For more information, contact Bill Keese at bkeese@aprovision.orgor by calling 800/204-2776, ext. 101.Volume 27, No. 1Published by the Association ofProgressive Rental Organizations—the official voice of therent-to-own industryEditorJulie SherrierExecutive editorEd Winn IIIArt directorNeil FergusonDirector of Marketing [advertising]Cindy Ferguson, CEMExecutive DirectorBill KeeseColumnistEd Winn IIIContributorsKristen Card, Murlin Evans,Bud Holladay, Richard May,Phillip M. Perry and Geoff WilliamsDirector of circulationLaurie HillEditorial/Advertising Offices1504 Robin Hood TrailAustin, Texas 78703512/794-0095; fax 512/794-0097E-mail: nferguson@rtohq.orgwww.RTOHQ.orgAPRO Officers and DirectorsPresidentLarry CarricoFirst Vice PresidentJohn RainesSecond Vice President“Tiger” John CleekSecretaryLarry GoadTreasurerRobert BrileyDirectorsSidney Burton, Ellison Crider,John Darden, David P. David, Ron DeMoss,Dave Edwards, Gloria Homeier-Schwien,David Kraemer, Richard Rose, Jamie Slatton,Mike Talley and Geron VailPROGRESSIVE RENTALS is publishedbimonthly—in February, April, June, August,October and December—by the Associationof Progressive Rental Organizations(APRO) at 1504 Robin Hood Trail, Austin,Texas 78703; 512/794-0095.Copyright © by APRO, 2008. All rights reserved.Cover and contents may not be reproducedin whole or in part without priorwritten permission. Back issues $5 each, subjectto availability. For subscription, changeof address, back issues, write to the above address.Three weeks required for changes onorders. Allow six to eight weeks for the firstsubscription copy to be shipped.4 PROGRESSIVE RENTALS

Associate Member since 1984

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Compiled byMurlin Evans,Richard May andJulie SherrierRent-to-own dealersencouraged to participatein TV converter boxcoupon programRent-to-own dealers who still have analogtelevision sets in their inventory or outon rent may want to consider registeringwith the National Telecommunicationsand Information Agency as certified retailers of thenew converter boxes. Rent-to-own dealers who registerwith the NTIA will then be able to take advantageof the much-touted $40 coupon program.As has been widelyreported, the cut-off dateof all analog broadcastswill be effective February17, 2009. It is estimatedthat 14.3 million householdsrely on over-the-airbroadcasts (using antennasand analog sets) anddo not have cable or satelliteservice, which willautomatically convertanalog to digital service.Those 14.3 householdswill need converter boxesby the 2009 deadline.NTIA began itsconverter box couponprogram January 1, 2007.The converter boxeswill cost between $40and $70. Converter boxmanufacturers have to beapproved and certified bythe government beforethey can sell the boxes.So far, 19 converter boxmodels are eligible forpurchase with the coupon,reports the U.S. Departmentof Commerce.The deadline to registeras a certified converterbox retailer is March 31,2008. Consumer electronicsretailers interestedin participatingin the program can call866/296-1107 or visit theNTIA Web site at www.ntiadtv.gov. A total of33.5 million coupons areavailable. NTIA ActingDeputy Assistant SecretaryMeredith Bakerreported that in the firstweek of the coupon program,more than 1 millionhouseholds requested2 million coupons.RentDirect NationwideExecutive Director JamesMacAlpine is consideringthe possibility of adding akiosk during the RentDirectNationwide show inDallas, March 2–5, whereRTO dealers can signup electronically to becertified converter box retailers.“Having these converterboxes available foryour customers who stillhave analog televisionswould be a great customerservice,” says MacAlpine.Currently, eight of thelargest consumer electronicsretailers, includingBest Buy, CircuitCity, Kmart, RadioShack,February-March 2008 7

noteworthyPhilip Eppard | Dreamstime.comSam’s Club, Sears, Targetand Wal-Mart, are among250 certified retailersapproved to participate inthe coupon program.“While RTO dealersmay not be besiegedwith customers wantingconverter boxes, it wouldbe great to have the abilityto offer the boxes tothose who do need themat virtually no cost,” saysMacAlpine.To learn more about theTV converter box couponprogram, visit www.dtv2009.com or call888/DTV-2009.RTO industryfriend andmentor Moondies at 62Craig Moon, 62, asales representative whohad worked for Sears,Whirlpool and Bosch-Siemens, died on January7. “Craig’s name wassynonymous with RTO,”says APRO PresidentLarry Carrico. “He will bemissed by all rental dealers.”Moon was diagnosedwith esophageal cancerjust a few months ago.“Craigwas a bigsupporterof APROand therent-toownindustry,” saysAPRO Executive DirectorBill Keese. “His exuberancefor life was alwayspresent in his winningsmile and wonderfulpersonality. He will bemissed, but his memorywill live on in the mindsof all his many friends.I will always rememberCraig for his genuinedemeanor, his integrityTexas’ 2008 tax plan may causesmall RTO dealers financial hardshipThe Texas Legislature broadened its scope of what type of businesses would besubject to its new “margin tax” (formerly known as the franchise tax) in 2008,which may cause smaller rent-to-own dealers financial hardship, says Aaron’sowner Robert Briley of Abilene, Texas.In early 2007, the Texas Legislature increased thestate’s “franchise” tax in order to procure lower propertytaxes for homeowners. In addition to broadening the scopeof the businesses that are to be taxed next year, the legislaturealso changed its calculations on how it would tax thesebusinesses, says Briley. “We’re predicting that our taxesare going to go from $2,000 to $40,000,” he says. “The tax used to be based on yourretained earnings, but now it is calculated on your revenues.”“One thing that it could do is cause smaller dealers who are not highly profitable tosell out by making it a little less profitable to stay in business,” Briley says. Briley andthe Texas Association of Rental Agencies have been working with Texas legislators on adepreciation exception to the tax.Read more about the tax and how it is calculated at www.dallasnews.com/sharedcontent/dws/bus/stories/121307dnbusfranchise.2ae529c.html.and his friendship.”Moon was very activein APRO and theindustry, having servedon the APRO VendorAdvisory Committee forseveral years as well asserving as a member ofTRIB Group’s ApplianceCommittee.Brian Rosen, formernational director of RTOSolutions, says, “CraigMoon was one of the firstfriends that I made in thisindustry. He was a kind,intelligent and caringperson who I looked up to.Craig once told me thatif I work hard enough, Icould be like him. I tookthis as a compliment. Hewill be missed.”Calling Craig a truefriend and mentor tomany, John Blair of CMJewelry had this to sayabout Moon: “Craig wasalways friendly and justmade you feel you werealways his friend. I hadthe honor to play a fewrounds of golf, enjoy afew dinners and lunchesduring the years I servedwith Craig on the APROVendor Advisory Committee.He just madeeveryone feel comfortablewhen around him. Wewill all miss him and prayfor his family.”Al Benson of CentralFile also found Moon tobe a great friend. “Youcould sit and talk toCraig for hours,” saysBenson. “He could tellgreat stories, make youlaugh or offer advice ifyou sought it. He trulyenjoyed life and was just8 PROGRESSIVE RENTALS

CALENDAR OF EVENTSfun to be around.” MikeBertolani of SED Internationalalso consideredCraig a good friend,saying, “Craig’s smile,humor and laughter willtruly be missed by allwho knew him.”Moon was known tochallenge people as well.Eli Kosanovich of Whirlpoolsays: “Craig was themost challenging andconfrontational employeeyou’d love to manage! Hewas feisty and contrarian,but usually right. Craigwas always a great teacherfor all of our newerhires. I was fortunate toget a second chance towork with Craig whenhe worked for Sears andenjoyed the renewedpartnership all the more.He will be missed forsure by all of his coworkersat Whirlpool andespecially by me.”Moon also had anuncanny ability to put togetheroutstanding eventsand was very generouswith his time and resources,says Dave Bradlaw ofSears Commercial. “I willnever forget an opportunityI had to spend sometime with Craig,” saysBradlaw. “During one ofour many conversations,I mentioned to him thatas a baseball fan, I hadseen many teams play inmany stadiums across thecountry. However, I hadnever been to WrigleyField to see the Cubs play.On my next visit to Chicago,Craig arranged forus to go to a Cubs game.As was his style, we metRTO dealers take note:37 state legislatures convenedin JanuaryForty-five state legislatures will convene in 2008 withconsumer protection legislation being one of the mostpopular legislative bills to be introduced. Thirtysevenof these convening legislatures began in January 2008.Already, more than 300 consumer protection bills have beenprefiled throughout America, even though most state legislativesessions did not begin until mid-January.APRO monitors all state and federal rent-to-own legislation,but encourages dealers to continue to develop relationshipswith their local and federal elected officials to educate them onthe rent-to-own business and the success of 46 state rent-toownlaws. The periodic introduction of state statutes to amendthese rent-to-own laws serves as a reminder to APRO leadersthe importance of educating the public, media and legislativeofficials on the success of the rent-to-own business and itsrespective state laws.before the game wherehe gave me a tour of theWrigley neighborhood, aswell as arranging outstandingbox seats a fewrows behind home plate.Craig relished his abilityto bring memorable experiencesto others. I don’tremember a time that Ienjoyed a game as muchas that one. The memorieshe created for others willlive on as his gift.”Craig is survived by hiswife, Lynne, his brother,Cecil, nephew MartinMoon, niece JenniferKoch, 17 grand nieces andnephews and three greatgrand nieces and nephews.Cards and acknowledgmentsmay be sent toMrs. Lynne Moon, 6618Pinehurst Court, Lisle,Illinois 60532.Lane Erickson | Dreamstime.comFebruary 200820–24Tupelo Furniture Mart’s WinterFurniture Market, Tupelo, Mississippi.For more information, call662/844-1473 or visitwww.tupelomarket.com.March 20082–5RentDirect NationwideMember2Member Summit andPrimeTime! Vendor Show, WyndhamAnatole, Dallas, Texas.For moreinformation, contact JamesMacAlpine, 336/714-8802,www.gorentdirect.com12–13Florida Rental Dealers AssociationLegislative Conference, Tallahassee,Florida. For more information, contactSharon Tomaszewski, 813/241-0607,www.frda-rto.com.15–19TRIB Group/AVB BrandsourceConvention and Buying Show,The Summit, Dallas, Texas. Formore information, contact JenniferMaloney, 714/502-9620,www.tribgroup.com.25–27Aaron’s Sales & Lease OwnershipManager’s Meeting, Gaylord PalmsHotel, Orlando, Florida.For more information, contactKim Hegerberg by e-mail atKim.Hegerberg@aaronrents.com.March 30–April 2North American Retail DealersAssociation 2008 Service and RetailConvention, Las Vegas, Nevada.For more information, contact NatalieNapolitano, 847/375-4831,www.narda.com.April 20087–13High Point Furniture Market Spring2008, High Point, North Carolina. Formore information, call 336/869-1000or visit www.ihfc.com.May 20087–9High Touch Users’ Conference,Wichita, Kansas. For moreinformation, contact Brenda Flax,800/326-6059, www.hightouchinc.com.June 200816–18Missouri Rental Dealers AssociationHeartland of America Trade Showand Seminar, Lodge of Four Seasons,Lake Ozark, Missouri. For moreinformation, contact Ken Steiner,573/442-2963,www.missourirentaldealers.org.For a complete list of allrent-to-own industry events,visit RTOHQ’s calendar atwww.rtohq.org.OCTOBER-NOVEMBER February-March 2008 2007 9

noteworthyket opportunities as well.As a consequence, rentto-ownwas prominentlyfeatured by analyst GregEstes of Intrepid CapitalFunds where he statedthat “Rent-A-Center andAaron Rents are currentlytrading at seven-to-eighttimesfree cash flow.”KentuckyRTO dealersreestablish stateassociationOn January 16, 25rent-to-own dealerswith stores in KentuckyNewly elected KYRDA board members Mike Martin (vice president),Bill Esenbock, Bill Howard, Bob Knabel, Chris Bolin (president),Todd Wilkins and Bill Milby (secretary/treasurer).CNBC featuresRent-A-Centerand Aaron’s asstocks to pickCNBC published “FiveFresh Investment Ideasto Make You Money in2008” (www.cnbc.com/id/22452809) on December31, where rent-toownpublic companiesRent-A-Center andAaron’s were two of thetop five featured recommendations.The article’spremise is that while thesubprime mortgage crisisis hurting the markets, itis also creating new marmetfor an outstandingreorganization meeting,according to KentuckyRental Dealers AssociationPresident ChrisBolin of Bolin RentalPurchase.“The attendance andparticipation was waybeyond my expectations,”says Bolin. “I was hopingthat we would be ableto elect five officers andboard members, but dueto everyone’s enthusiasm,we were able to nominateand elect seven boardmembers.”The new officers ofKYRDA are PresidentErnie lewallen10 PROGRESSIVE RENTALS

Chris Bolin of BolinRental Purchase; VicePresident Mike Martin ofTame Inc., dba Aaron’s;and Secretary/TreasurerBill Milby of HomeExpress.Board members atlarge are Bill Esenbockof Raintree Group, dbaColorama; Bob Knabel ofHome Express; Bill Howardof Full-O-Pep; andTodd Wilkins of FairwayLeasing, dba Aaron’s.APRO Legal CounselEd Winn III provided anindustry update to thegroup and GE Consumer& Industrial andTRIB Group generouslysponsored the KYRDAmeeting.Bolin reports thatKYRDA will be havesolid representation atAPRO’s 2008 Dave EganLegislative Conferencein February, with eightcompanies attending.“We will definitely makean impact with our representativesin D.C. thisyear,” says Bolin.KYRDA will also bejoining forces with theOhio Rental DealersAssociation’s MidwestRTO Expo in September.A future education/networking meeting datefor KYRDA membersis slated for Louisvillein May. “We want tocontact those dealerswho may have wanted toattend this meeting—butcouldn’t—and make surethey know we’ve reorganized,”says Bolin. “Theparticipation was as goodas I’ve seen at any staterental dealer association.We certainly had membersstep up and offer toserve their fellow rentaldealers in Kentucky.”For more informationabout joining KYRDA,contact Chris Bolin bye-mail at bolinrto@bellsouth.net or by phoneat 931/647-1136.Aaron’s franchisereplacesSanta Claus inConnecticutAaron’s franchiseeCharles Smithgall embracedthe holiday spiritby donating a housefull of home furnishingsto the company’smost deserving customeramong its 61 SEI/Aaron’sfranchise stores. AracelisLiciaga and her family offive were the lucky recipientsafter Aaron’s pouredthrough the many nominationsfor the charitablegift. Two other familiesPlug Into The Power of Information!Information… It is thepower that drives yourbusiness. You need to havecontrol of your furniture andelectronics or tire and wheelbusiness. RSSS gives you thatcontrol by allowing you toeffectively manage and shareinventory across your entireoperation. Powerful reportingcapabilities assist you inreducing your inventorydollars while improvingproduct mix. By employingthe best in communicationand business technology,RSSS can even help youlower the cost of openingnew locations.If you havebeen searching for a way togenerate new business andharness the power of yourpresent information, thenRSSS is the solution youhave been looking for.Call us at 1.800.334.5224 or visit www.rsss.com.OnlineinRealTime!Associate Member since 1986Associate Member since 1997OCTOBER-NOVEMBER February-March 2008 2007 11

noteworthyAnnual RTO survey shows steady growth inrevenue, store fronts and customer countAPRO’s 2007 Statistical Survey on the Rent-to-Own Industry showed an increasein revenue, customers and store count over the previous year. The industrytopped $6.8 billion in revenue for 2006. APRO attributes this growth to the evolutionof products and store design, competition in the marketplace and public understandingand appreciation of the industry’s flexible payment choices and no-debt transaction.The survey was conducted from data received from both independent and franchiseerent-to-own businesses, but the final numbers also included the combined published datafrom the two publicly traded companies, Aaron’s and Rent-A-Center. The rent-to-own industryserved 3 million customers in 8,500 stores nationwide. This represents an increase of200,000 new customers and an increase of 200 stores from the previous year. The combinedrevenue figures from annual reports published by Aaron’s and Rent-A-Center, alongwith the figures from APRO’s 17th annual statistical survey, show an industry growth inrevenue of $100 million from 2005.Monthly gross revenue showed almost a $7,000 increase in 2006 over the same storerevenue in 2005. The survey of independentsand franchisees also showed morethan a 4 percent growth in same storecustomers.“APRO’s survey also shows substantialgrowth in electronic products, includingflat-screen LCD and plasma televisions andcomputers,” says APRO President and RentOne Owner Larry Carrico from St. Louis,Missouri. An additional major factor citedby Carrico for store and industry growth isthe trend of independent rental stores movingtoward more upscale stores and bettercompany branding across different communities. This has also proven to be successful withthe two publicly traded companies.“An increase in customers shows we are succeeding with our efforts in educating thepublic on the true value of the rental transaction,” says APRO Executive Director Bill Keese.“The proof is in the pudding—growth in customers and store fronts shows that more Americansare realizing that rent-to-own can be a better option than traditional credit.”To view details of the statistical survey, visit APRO’s Web site at www.rtohq.org.Tatiana nikolaevna Kalashnikova | Dreamstimewere also recipients ofAaron’s holiday spirit—one received a freecomputer and the othera sofa and love seat. Butit was the Liciaga familyof Hartford, Connecticut,who received the granddonation of a house fullof furnishings.“It was the right thingto do,” says SEI OperationsDirector DaveEdwards. “We wanted tohelp one of our customerswho not only deservedit, but needed it.”Smoke damage froman electrical fire destroyedall of the Liciaga’s familyhome furnishings. UntilChristmas Eve, they hadan empty house with a fewarticles of clothing andkitchen items donated byfriends. But the emptyhouse quickly filledwhen Aaron’s delivereda holiday miracle thatthe Liciagas had no ideawas coming. The storycaught the attentionof the Hartford FoxNews affiliate, whichfeatured the story onChristmas Eve, showingthe family’s excitementand gratitude for sucha charitable gift. Edwardsand Aaron’s werefeatured prominently inthe lengthy television newsstory.While Smithgall andEdwards plan on donatingannually because “it’s theright thing to do,” theyand many other RTOdealers like them may notknow that such donationsare also significant inimproving the rent-to-12 PROGRESSIVE RENTALS

own image. Studies showthat 42 percent of potentialrent-to-own customersare more likely to considerrent-to-own if they knowthe company is involved ina local charity or donatesto a charitable cause.RepresentativeHolden signson as H.R. 1767co-sponsorRepresentative TimHolden of Pennsylvaniasigned on as the 62nd cosponsorto the rent-to-ownindustry’s House bill, H.R.1767, theConsumerRentalPurchaseAgreementAct, onDecember 6. A “Blue Dogconservative Democrat,”Holden serves Pennsylvania’s17th congressionaldistrict and has servedhis constituents for eightterms.Holden has been amember of the AgricultureCommittee since1993 and was recentlyappointed vice chairmanof the House AgricultureCommittee in the110th Congress. He wasalso selected to serveas the chairman of theAgriculture Committee’ssubcommittee onConservation, Credit,Energy and Research,and continues to serve onthe Livestock, Dairy andPoultry subcommittee.In the 105th Congress,Holden was appointed tothe Transportation andInfrastructure Committee.Holden also serves onthe Transportation subcommitteeson Highwaysand Transit and Aviation.A complete list of cosponsorsis available onAPRO’s Web site atwww.rtohq.orgRent-A-Centerto closeapproximately280 storesOn December 3, Rent-A-Center announcedplans to close approximately280 stores acrossthe United States.“We continually analyzeevery aspect of ourbusiness in an effort toimprove operating andfinancial performance,”says Mark E. Speese,chairman and CEO ofRent-A-Center. “Accordingly,we evaluated everymarket in which weA new way to own furniture, appliances, electronics and computersLooking for afranchising opportunity?Attention: Multi-Site Operation RTO ManagersWe are looking for successful individuals with the desire to own their own stores.We have investors who want to partner with you in owning a successful business.Opportunities are available throughout North America!Contact us today and begin your own empire!Contact: Mark Feldbauer, Director of Franchising1.877.272.1166 Ext 251franchising@easyhome.us | franchising.easyhome.usCanada’s largest and the world’s third largest merchandise leasing companyMemberFebruary-March 2008 13

noteworthyoperate based on operatingresults, competitivepositioning, and growthpotential. As a result, weidentified approximately280 stores that we intendto close and merge withexisting Rent-A-Centerstores within the next 90days,” Speese says.The company expectsto incur pre-tax restructuringcharges related tothe store consolidationplan and other restructuringitems in the range of$36 million to $43 million,substantially all of whichwill be recorded in thefourth quarter of its fiscalyear ending December31, 2007. The estimatedcost with respect to thisrestructuring relates primarilyto lease terminations,fixed asset disposalsand other miscellaneousitems. The companyexpects the cash outlayassociated with thisrestructuring will be inthe range of $26 millionto $30.5 million over thenext 12 to 18 months.The 280 stores identifiedgenerated revenues ofapproximately $140 millionyear-to-date throughOctober 31, 2007. Thesestores will transfer theircustomer rental purchaseagreements to existingAR08-301.qxp:Layout 1 1/15/08 3:39 PM Page 1Rent-A-Center stores andthe company expects toretain the majority ofthese rental purchaseagreements. At the conclusionof the restructuring,the company expectsa pre-tax monthlyoperating income benefitin the range of $2 millionto $2.5 million.American TireRentals tobecome part ofRimTymeAmerican Tire Rentals,based in Temple, Texas,and run by Scott Savell,became part of Rim-Tyme, the custom wheeldivision of rent-to-ownchain ColorTyme Inc.,according to Modern TireDealer.Savell, a veteran ofthe tire-and-wheel rentalbusiness who recentlyjoined RimTyme, is incharge of RimTyme’sgrowth strategy, “includingdevelopment ofcorporate-owned storesas well as franchise development,”according toColorTyme officials.Savell says he seesthe opportunity “to takethe wheel and tire rentalCommercial Quality for the HomeStarting with three years parts and labor,Speed Queen backs its commercial qualityequipment for the home with the industry’smost comprehensive warranty.Partnered with full-service distributors, webring our expertise to rent-to-own dealerslooking for a profitable opportunity to sella differentiated line of laundry equipment.Laundry — it’s all we do.For dealer inquiries, call 1•800•552•5475 or visit www.speedqueen.com/rentalsAmarillo Hardware Company806•376•4731Appliance Assoc. of Buffalo, Inc.716•873•4100Blodgett Supply Company802•864•9831Cunningham Distributing915•533•6993 or 505•247•8838Doolittle Distributing913•888•7820 or 800•829•7820E.A. Holsten, Inc.804•359•3511Eagle Distributors, LLC504•464•5991 or 800•659•5991Hamburg Brothers412•488•4428Kimball Electronics, Inc.801•466•0569 or 303•893•1423Northern Plains Distributing701•293•6868O’Rourke Bros., Inc.210•333•1311; 972•245•0006;407•522•5600; 800•226•0272;404•346•9863 or 800•282•5282Persinger Supply Company304-706-2223Potter Distributing, Inc.616•531•6860 or 800•748•0568R&B Wholesale Distributors, Inc.510•782•7200; 909•230•5420 or602•272•1200Tri-State Distributors509•455•8300; 503•283•3297;253•872•2900 or 800•473•0002Universal Supply Group, Inc.973•427•332014 PROGRESSIVE RENTALS2 3 5 25 50 75 97 98PMS PMS#3 #2 DIEC M Y BJob No: 2008-0210Date: 1/14/08Op/Mac#: SAVersion: AR08-301SIZE: 7.5" X 4.875"

industry to new levels.”Headquartered inPlano, Texas, ColorTymehas seven wheel and tirestores, plus more than200 traditional rent-toownstores.TRIB GroupappointsBestway’sKraemer to boardDavid Kraemer ofBestway Inc. has beenadded to TRIB Group’sboard of directors. Bestwayis based in Dallas,Texas. Kraemer will fillthe positioncreatedwith therecent resignationofBob Bloomof ColorTyme. Kraemerwill serve the remainderof Bloom’s term.Both the board of directorsand staff of TRIBGroup were excited towelcome Kraemer aboard.Rent’N Go opensin NashvilleRent’N Go customwheels and tires announcedthe opening of itsFranchisees Greg Spring (left) and Jay Howe (right) and their team are allsmiles about the opening of their Rent’N Go custom wheels store in Nashville.newest store in Nashville,Tennessee, under the leadershipof franchisees JayHowe and Greg Spring.The company continuesto pursue its expansionstrategy throughfranchising in selectedU.S. markets. “We arepleased to have Jay, Gregand their team in theRNG family,” says Florida-basedRNG PresidentBob Catino. “We lookforward to developingthe Nashville market inconcert with managingpartner Greg Spring, whois a member of Nashville’sfirefighters.Associate Member since 1987February-March 2008 15

noteworthyRSSS promotesHersh to supportspecialistCarri Hersh has beenpromoted to applicationsupport specialistfor RSSS. For the pastsix years, Hersh hasbeen the client supportcoordinator, managingclient support calls fromthe company’s CorpusChristioffices.JanMiller,RSSS directorof clientservices, says, “Carri hasdone an outstanding jobas client support coordinator.She was readyfor a promotion and anew challenge.Due tothe growth of RSSS overthe past few years, wewere able to do that forher. We believe she is theperfect person for the jobbecause she has learnedthe application but, moreimportantly, has developedrelationships withour clients over the pastsix years. She will beable to leverage thoserelationships in hernew position.”Congress passes one-year stay on AMT;tax returns most likely postponedRent-to-own customers may have to wait for their tax refund this spring due to thelast-minute passage of an Alternative Minimum Tax “patch.” Congress passedthe AMT legislation in a 352–64 vote on December 19 and President George W.Bush approved the legislation. “This is a critical issue for millions of people who dependon their refunds and could have a massive impact on rent-to-own customers,” says APROExecutive Director Bill Keese.After weeks of wrangling over AMT legislation, one of Congress’ last acts of 2007 wasto pass a bill that would put a one-year stay on the AMT before it reached further down intothe middle class. Congress has typically frozen the number of AMT taxpayers at 4 millionby “patching” the AMT, which prevents more middle-class taxpayers from having to facethe tax. However, the “patch” deprives $50 billion that the Treasury would otherwise raise.With such a late fix, however, the IRS says it needs up to seven weeks from the datethe legislation was signed in order to complete changes to electronic and paper tax forms.Therefore, the tax filing season that normally began on January 14 was pushed to January28. Some sources are even stating that the tax season may start as late as February 18.If that is the case, both paper and electronic filers who depend on their returns to assisttheir cash flow may have to wait a few weeks longer than usual. “Our customers are oftenstrapped for cash after Christmas and depend completely on their IRS refunds to remedythe problem,” says Shannon Strunk of Baber’s Leasing. “I suspect that it will come as badnews when they realize that this late fix may cost them as much as 30 days in time beforethey can fix any problems they were expecting to fix promptly.”With the delay in filing, the backlog at the IRS will be substantial. Last year, the IRSreceived 38 million tax returns by February 16, 32 million of which involved refunds.Premierfranchiseesopen stores inDelaware andFloridaTen-year RTO veteranand current U.S. ArmyReservist Steve Newmanopened a Premier Rental-Purchase store in Milford,Delaware, in November.Although Newman willnot be able to able tomanage the store personallyuntil he completeshis military assignmentin the Reserves, he isfulfilling his long-standingdream of businessownership in an industryhe says he loves.Called up for activeduty in 2002, it was thesecond time in 10 yearsthat Newman’s careergot sidelined. After hereturned, he becamean account manager forRentWay, working hisway up to manage oneof the best stores in theregion at that time andreceiving the company’sDirector Award.Although Newmanstill has one more year inhis current military assignment,which is closeby at Dover Air ForceBase, he has structuredhis RTO operation to includea manager who willrun things for him.In other Premier news,after a lengthy careerworking as a rent-toownemployee, DennisLingerfelt and his wife,Donna, opened theirown store in Jacksonville,16 PROGRESSIVE RENTALS

Florida, earlier this year.Lingerfelt’s RTOexperience began 15years ago when he wasrecruited by Rental Kingthen endured a series ofbuy-outs as an employeeof RentWay and RentRitebefore deciding it wastime to go into businessfor himself.“I was excited aboutwhat they [Premier] hadto offer. It’s a good establishment.They want youto be a success and go outof their way to make youthat way. It’s really a greatprogram.”Industry vendorShannon ends 23years with RCAAfter 23 years of servicewith Thomson’s RCAaudio/videodivision,Timothy B.Shannonsteppeddown asnational manager specialmarkets on December 31.Thomson sold its RCAaudio/video activities toAudiovox Corp. “Currently,our RCA audio/video business sells awide range of AV products,including DVDand MP3 players, hometheater audio systems,clock radio productsand digital informationrecorders,” says Shannon.“As part of this transaction,Thomson will assignto Audiovox rights tothe RCA brand withinthe field of use for audio/video products.”Earlier this year,Audiovox purchasedThomson’s accessoriesbusiness, includingrights in that categoryto the RCA brand. It isShannon’s goal to stay inthe electronics industrydoing special markets—which includes rent-toown—ashe has too muchenergy to retire and willmiss the many friends hehas made in rent-to-own.“I started with RCA inMarch 1985, as the veryfirst national rental managerthat RCA had everhad. My first assignmentas the new RCA rentalmanager was to attend theColorTyme Convention inMaui that month—howcould you not love a joblike that!” says Shannon.His early customersincluded industry legendsTom Devlin of Rent-A-Center, Chuck Sims ofRemco, Willy Talley, DickGenotte, Jim Thompsonand Steve Kruse. “I knewI had found a home,”says Shannon. “The rentalpeople were fantastic towork with and extremelyloyal.”Shannon has also beeninvolved with APRO,having served 15 yearson the APRO VendorAdvisory Committee andwas part of the team ofindustry vendors whoorganized the committee.“Being associated withthe rent-to-own industryis one of the best thingsthat has ever happened tome and my wife, Pattie,”says Shannon.Aaron Rentspromotes TrainorJohn T. Trainor hasbeen promoted to vicepresident, informationtechnology, of Aaron’sSales and Lease OwnershipDivision. Hepreviously served as ITdirector of applicationdevelopment.Trainor has morethan 16 years experiencein information technologyand has been withAaron’s since 1999. He hasprovided leadership indevelopment of softwarefor Aaron’s stores and thedesign and managementof enterprise systems forthe company.Trainor holds abachelor’s of electricalengineering degreewith specialization incomputer systems fromthe Georgia Institute ofTechnology and lives inRoswell, Georgia, withhis wife and three sons.ColorTymehires Deeringas directorof franchisedevelopmentColorTyme has hiredJames Deering to lead itsfranchisedevelopmentefforts.Deeringmostrecentlyserved as president of PCJFranchising Co. in Wilmington,North Carolina,and brings 15 years ofretail and service industryfranchise experience toColorTyme. This positionwill be his first rent-toownventure; however,according to ColorTymeCEO Bob Bloom, hisextensive franchisingknowledge and expertisewill help the companyrefine and expand itsgrowing franchise system.“This position requiresbroad knowledge offranchising laws and bestpractices,” says Bloom.“James’ depth and breadthof experience makes himan ideal choice to headColorTyme’s franchisingefforts, especially as webegin to roll out plans toexpand RimTyme.”Last month, Color-Tyme announced significantexpansion to itsRimTyme custom wheelrental division that willinclude broad franchisedevelopment. In additionto overseeing ColorTyme’straditional RTO franchiseneeds and expansion opportunities,Deering willalso lead the franchisingefforts for RimTyme.“I’m excited about theopportunity to learna whole new industrywithin franchising,” saysDeering. “RTO is a strongbusiness model. For theindustry to continue toexpand and get better operators,they have to withnon-traditional routes.I hope to bring greatfranchise and businessorganizational efficienciesas well as help refine theproven systems that ColorTymehas in place now.”February-March 2008 17

T H I N K I N G R T OBy ED WINN IIIAPRO’s general counselWhen talking to rental dealers, which Ido every day, I make it a habit to askthem how their business is doing. Iam ever on the watch for trends inrent-to-own that I can attach to largereconomic trends so that we can learn, once andfor all, the exact parts of the economic engine thatdrive the business. Once I possess this informationand have shared it with APRO members, thenwe can all know when to open stores, how much toborrow, how much to buy—and thus help businessgrow at a record-setting pace.I am particularly mindful to ask this questionevery January about December and the fourthGauging the economic tidequarter. It used to be that the fourth quarterwas really big for rent-to-own stores and it stillcan be. Dealers can deliver a lot of product duringthe holiday season. Cash, though, more oftencomes in during the first quarter. The deliveriesstart paying, income tax refunds get spent andthe hope is that the December deliveries do notall get picked up in January. For the 27th year in arow, I have sought the keys to the RTO economickingdom. For the 27th year in a row, those keyshave failed to unlock any magical doors to economicinsight.The reason for this elusive insight is that I havenever gotten consistent answers to my questionsposed to rental dealers. At any given moment, itseems that some rental dealers have just had astellar season/month, some are hangingon by their fingernails as BOR droppedprecipitously and without warning lastseason/month and any number of dealersare treading water—renting and collectingwith nothing to complain about,but nothing to write home about either.It has been that way for 27 years.Dealers have suggested that I exploreregional differences in my surveys. It isprobably a good idea and had I been more scientificwith those I surveyed, I might have learnedsomething useful about regional trends. But mysurveys have depended upon who calls in with alegal issue or some industry gossip. I have nevertalked to the same identifiablesubset of rentaldealers on a regularbasis and sometimeseverybody I talk tocomes from the Southor California or NewYork or wherever dealersare felling legal heat.In any case, I cannotreport on any regionaltrends of late, alas.“Whateverhappens nextto the economyoverall, theefficient,optimistic,well-run shopswill prosper;those with issueswill suffer.”What my non-scientific surveys do consistentlyindicate—and this will not surprise manyof you—is that results depend oninternal company performancemore than anything else. A newadvertising campaign worked or itdidn’t and the ads dictated how thestores performed. Or the companylost two good store managers last month and performanceplummeted. Or the dealer bought toolate or badly or a supplier overcommitted and thedealer did not get the stuff that he ordered untillate in the month. Every time results are outsidethe bell curve, when I drill down a little, the dealersusually have an explanation tied to planning,good or bad, or execution, good or bad, as thereason for the blip, up or down.We are all wondering, of course, whether thefallout from the subprime debacle is going to putthe country into a recession and drive millions ofnew, credit-constrained customers through ourrent-to-own doors. Dealers want to know; stockanalysts want to know; thoughtful and ambitiousemployees want to know.There are going to be lots of consumers whooverbought houses and who will lose those housesand damage their credit. They may come to visitrent-to-own stores, unless, of course, they arenow suddenly crammed into a too-small apartmentand have no immediate need for any more“stuff,” rented or otherwise. We do not know if thecredit card companies are feeling chastened at all,yet. As long as they can keep adding fees and raisingrates, they may be happy to continue pitchingcards and credit to one and all, housing slump bedamned.The common wisdom is that RTO is recession-proof.Recessions do a lot of things, however,and some of those things can hurt our industry.18 PROGRESSIVE RENTALS

When credit gets tight, it gets tight upand down the spectrum. If consumersfeel the credit pinch, so will business. Itgets harder to borrow; harder to grow.The lack of customer growth in rawnumbers in the rent-to-own industryover the past few years can be attributedto easy consumer credit, but also consumerattitudes toward the business. Externaleconomic factors are not going tochange consumer attitudes about RTO.Only we can do that. So, once again, it isa matter of how stores and companies arebeing run that dictates success or failure.Whatever happens next to the economyoverall, the efficient, optimistic, well-runshops will prosper; those with issues willsuffer. That is all I have learned from surveyingrental dealers. I wish that I couldoffer more insight.I do intend to keep surveying, lookingfor the secret to it all. J10703_IMAG_vacancy_ad.indd RTO’s official Web 1 siteGet more fromwww.RTOHQ.orgCheck out APRO’s new-and-improved Web sitefor the rent-to-own industry: www.RTOHQ.orgMore news. More resources. More forums. More multimedia.More user-friendly. More connections.1/18/08 3:56:11 PMEd Winn’s e-mail address is edwinn@mwvmlaw.com.Associate Member since 2000FEBRUARY-MARCH 2008 19

20 PROGRESSIVE RENTALS

HiringNavigatinga changinglegal landscapePracticesAnd the immigration debateFFaced with a dwindlingsupply of availableworkers, you maybe among the manyemployers looking to fill yourranks with foreign nationals.Hiring immigrants, afterall, has long been a valuedtechnique for getting thejob done in America. Today,though, employers need totread more carefully overwhat has become rougherlegal terrain. As the nation’sheadlines attest, employerscan be hit with stiff penaltieswhen errors are made hiringworkers from other nationswho are in the United Statestemporarily or permanently.By Phillip M. PerryFEBRUARY-MARCH 2008 21

Federal regulations are tightening up in ways that target employersof undocumented workers. Worse, state governmentsaround the country are creating a confusing patchwork of lawsthat penalize employers who hire undocumented foreign nationals,following the failure of Congress to pass comprehensiveimmigration reform last summer. Last year, state lawmakersconsidered more than 1,560 bills related to immigrationand enacted 244 of them in 46 states, according to the National Conferenceof State Legislatures. That pace was triple the previous year and the NCSL expectsmore such activity in 2008. (The organization’s complete report is availableat www.ncsl.org.) • “The states are having to pick up where the federalgovernment did not come through,” says David Kotick, managing partner ofApsan Law Group, an immigration law firm in New York.Leading the wayBusinesses nationwide are assessing the impact of Arizona’snew immigration law, believed to be the strictestin the nation. The law does the following: Encourages people to contact their county governmentswhen businesses are suspected of employing illegalimmigrants; Allows the county to revoke the business license of anemployer who knowingly hires an illegal immigrant; Requires all Arizona businesses to use E-Verify, a federalonline database, to confirm that new hires havevalid Social Security numbers and are eligible foremployment.The law is being challenged in court by the ArizonaChamber of Commerce and Industry. “It’s crystal clearthat the employer sanctions law will harm the state economy,”says Chamber President Glenn Hamer. “It’s simplya question of degree.”Another high profile state is Virginia, where more than50 pieces of immigration-related legislation are expectedto be considered in 2008. One law would revoke the businesslicense of any employer found to hire undocumentedworkers; another would require employers themselves topay any workers’ compensation claims for undocumentedemployees. A coalition of businesses and trade groupscalled Virginia Employers for Sensible Immigration Policyhas been created to fight the laws.Even municipalities are getting into the act. “Manylocal communities are fighting illegal immigration bytargeting businesses,” says Kotick. “Employers who hireundocumented aliens face steep fines and the loss of theirbusiness licenses. Some laws even mandate jail time forrepeat offenders.”Verifying eligibilityWhatever your state, you are subject to federal regulationsthat require you to verify the employment eligibilityof anyone you hire. “Every individual, once hired,must be asked for documents that provetheir identity and their work authorization,”says Carlina Tapia-Ruano, a partnerat Chicago-based Tapia-Ruano &Gunn, an immigration law firm (www.trgpc.com). The employer must haveeach hired individual fill out an I-9form, titled “Employment EligibilityVerification,” issued by the U.S. Citizenand Immigration Services, a division ofthe Department of Homeland Security.(To avoid any appearance of discrimination,the law requires that you haveindividuals complete this form only afterbeing hired, not during the recruitmentprocess.)You can download a copy of an I-9form from www.uscis.gov. Click on“Immigration Forms” and then “Employment EligibilityVerification” or I-9, toward the bottom of the list.On part 1 of the I-9 form, the employee enters basic informationsuch as name, address, Social Security number anddate of birth. Just as important is the section on the employmentstatus of the individual. There are only three choices“Many communities are fightingillegal immigration by targetingbusinesses. Employers who hireundocumented aliens face steep finesand the loss of their business licenses.Some laws even mandate jailtime for repeat offenders.”here: The individual is either: 1) a U.S. citizen; 2) a legal permanentresident, or 3) an alien authorized to work until agiven date. The employee must sign and date the form.In part 2 of the form, you must certify that you havemade sure the documents provided by the employee establishthe individual’s identity and employment authorization.What documents are acceptable? There is an extensivelist on the back of the I-9 form. Any one documentfrom a list of 10 is acceptable as proof of both identity andemployment eligibility. (A passport and a permanent residentcard are two examples.) Additionally, there are nearlytwo dozen additional documents that have been certifiedas proof of one of the two criteria.Part 3 provides space for updating the form’s informationafter a worker’s previous work authorization hasexpired.“The law requires that the signatures and the informationbe completed within three days of the employee’s hire date,”22 PROGRESSIVE RENTALS

says Tapia-Ruano. “Many attorneys recommend that employersattach photocopies of the reviewed documents to each I-9,to help protect the business in the event of an audit.”Avoiding errorsGathering documents is one thing. Making sure theyare authentic and that all of the blanks are filled incorrectly is another. Failure to do so can be costly. Penaltiesfor errors can range from $1,000 to $10,000 per violation.“The penalties can accumulate very quickly even witha single I-9 form if there are numerous violations,” saysTapia-Ruano. “Some employers have been hit with hundredsand thousands of dollars in penalties and fines.”Even employers who make innocent mistakes can befined, says Tapia-Ruano. “If a receptionist or whoever isassisting employees in completing the I-9 forms makesmistakes, then even if the workers are U.S. born citizens,the employer is subject to fines. The fact that this can happenrepeatedly makes employers very uncomfortable.”Employers should make sure that everyone who helpsemployees fill out I-9s is trained to avoid as many errors aspossible, suggests Tapia-Ruano. “And I would encouragean internal audit of I-9s on a periodic basis. Don’t wait foran audit by the Department of Homeland Security.”While the I-9 form looks simple, attorneys caution employersfrom making these common errors: Illegal bias: Avoid charges of discrimination by requiringevery employee—not just the ones whom youbelieve are from another country because of their appearanceor their speech—to fill out an I-9 form. Entry errors: “Any mistakes can or will result infines,” says Tapia-Ruano. One of the more common errorsis incorrect indication of the employee’s immigrationstatus. An employee with a work visa, for example,may have erroneously filled in “permanent resident.”Such a mistake is significant even if done innocently.“It is the employer’s duty to make sure the entries areaccurate.” Over-restrictive documentation: Avoid requiringdocumentation that is more restrictive thanwhat the law mandates. An employer might be temptedto do this to simplify record keeping, but it is illegaland can lead to fines as well as charges of discrimination.“The I-9 provides a list of documents that are acceptableas proof,” says Tapia-Ruano. “You must acceptthe employee’s decision as to which of the listed documentsto provide.” Failure to assess authenticity: The employermust not accept documents that a reasonable personwould suspect were fraudulent either because they lookdoctored or look like duplicates. Procrastination: Another mistake is to put off thetask of examining the employee’s documents and gettingthe I-9 in order. “It’s not uncommon for employersto wait more than three days,” says Tapia-Ruano.“Again, that can result in fines.”Safe Harborfor employersFor decades, the U.S. Social Security Administrationhas sent “no match” letters to employers whenworkers’ names and Social Security numbers didnot correspond to the agency’s records.Employers have been unsure what to do after receivingthe letters. There was no firm guidance from the governmentand in many cases employees remained on thepayroll in a kind of limbo.This situation has changed. In August 2007, the U.S.Immigrations and Customs Enforcement division of theDepartment of Homeland Security issued new regulationsthat defined the steps to be taken by employers receivingno match letters. Employers who follow the procedureswere granted safe harbor from prosecution. At the sametime, the regulations provided for increased civil or criminalpenalties for employers who fail to comply.Here is a brief synopsis of what employers would berequired to do in the event of a no-match letter:1) Within 30 days, check records to ensure that the mismatchwas not the result of a clerical error;2) If this does not resolve the problem, ask the employeeto confirm the accuracy of the employer’s records;3) Ask the employee to resolve the issue with SSA within90 days from the date the employer received the nomatchletter;4) If the employee is able to successfully resolve the mismatch,ensure that the instructions in the SSA letterhave been followed;5) If the issue is still unresolved, initiate another verificationround as if the employee were newly hired.Late in 2007, a federal court issued a preliminaryinjunction barring implementation of the safe harborregulations, citing among other reasons a high incidenceof errors in the government’s Social Security database.Even so, the government has not abandoned the basicconcept outlined in the regulations and intends to issuerevised rules in 2008. “Employers would be remiss to fallback on their due diligence and security if they think theinjunction will cause the problem to be put on the backburner,” says Angelo A. Paparelli, managing partner ofPaparelli & Partners. “Employers should use this respiteto adjust any employment-related immigration policiesthat need correcting.”To stay abreast of developments in this area visit theweb site of the U.S. Immigration and Custom Enforcementat www.ice.gov.FEBRUARY-MARCH 2008 23

Everything You NeedFor Your RTO!BuyAssociate Member since 2004

RightEverything you need forSuccess and Growth• Buying Products BetterRentDirect’s parent company, Nationwide MarketingGroup, racks up over $11 billion in annual sales.• Ordering and FulfillmentRentDirect members can mix a variety of products andbrands on a single truck for maximum freight discounts.• Marketing and TrainingRentDirect offers more support than any other RTOgroup. Plus, access to exclusive financing and otherspecial opportunities.• On-Line Learning ProgramsTake part in and grow through focused training opportunities.• Group Centralized Purchasing SystemEnormous buying power from our vast line-up of vendors.• National Network of 40 WarehousesFlexible ordering, mix products, delivered within 48 hours.• MemberNet TVCustomized in-store video feed with member’s owncommercials & movie trailers.• Advertising and Promo Materials At No CostCirculars, postcards, door hangers, radio & TV.• Store Fixtures & DisplaysProfessionally designed custom displays to showcaseyour products.• PrimeTime! and Member 2 Member SummitThe Rent To Own industry’s leading events. Twice a yearour members meet and rake in millions of dollars inon-the-spot discounts.StayAheadFor more information, contact James MacAlpine336-714-8802 or email: jamesm@nationwidegroup.org or visit www.gorentdirect.com

Allowing expiration dates to slip by: Manyemployees have permission to work for only a limitedperiod. “You need a system to continue to verify theemployment status of an individual throughout theperiod of employment,” says Tapia-Ruano. Prior to theexpiration date, ask the employee to present new verificationdocuments.It’s important to retain these I-9 forms in a safe place.“At any time, the Department of Homeland Security or theU.S. Department of Labor may come around and performwhat they call an ‘employment audit’ of I-9s,” says Tapia-Ruano.Understandingemployment visasDocuments that certify that “foreign nationals”—people who are natives of other countries—areeligible to work in the United States are called“employment visas.” Not all employment visas are alike.In fact, there are a host of different kinds. To peruse thefull array of visas with explanations, navigate to the webpage maintained by the U.S. Department of State atwww.unitedstatesvisas.gov, and also http://travel.state.gov/visa.Many employers hire unskilled workers with H-2Bvisas, valid for temporary employment for up to a year.“There is a tremendous need for people to fill such positionsin this country,” says David Kotick, managing partnerof Apsan Law Group.Arranging for H-2B visas can take up to four months tocomplete. The process begins when the employer obtainsa labor verification from the U.S. Department of Labor.Then the employer files a petition with the Department ofHomeland Security. When that petition is approved, theworker can apply for a visa and a passport from the U.S.consulate in his or her own country.The United States limits such visas to 66,000 annually.“It’s nowhere near enough,” says Kotick. “They run out veryquickly and there is a severe labor shortage for these workersthat affect business profits and the economy as a whole.”“What’s really needed is a program that provides for ayear-round legal status for guest workers,” says Kotick.“That was part of the Congressional immigration reformpackage that fell through.”Safe-harbor rulesThe U.S. Social Security Administration has long beenin the practice of sending “no-match” letters to employerswhen workers’ names and Social Security numberson W-2 Forms do not match the SSA records. In the past,employers had never been sure what to do after receivingthese letters. Should a worker who cannot reconcile thediscrepancy be fired?“While the safe-harbor regulationswere intended to reduce ambiguity,employers still face the costly taskof checking and double-checkingdocuments. And the safe-harborregulations carry their ownheightened risk of financial penalty.”“In many cases, employers have kept the employees onboard, fearing that a termination decision based on a nomatchletter might lead to charges of discrimination,” saysAngelo A. Paparelli, managing partner of Paparelli & Partners,an immigration law firm with offices in New YorkCity and Irvine, California (www.entertheusa.com). “Afterall, there can be legitimate reasons why a no-match occurs.A female employee might have gotten married, for example,and changed her name to her husband’s without notifyingthe Social Security Administration. Or the Social SecurityAdministration could have misspelled the name.”Indeed, the Web site of the U.S. Immigration and CustomsEnforcement division of the Department of HomelandSecurity states that, “an employer who takes actionagainst an employee based on nothing more substantialthan a mismatch letter may, in fact, violate the law.”Times, though, are changing. Today’s employers facemore severe fines for hiring illegal immigrants and there isa general national mood shift against undocumented foreignnationals. Many observers, therefore, are concernedthat employers will opt to risk discrimination lawsuitsover the federal government’s civil and criminal penaltiesfor employment of undocumented workers. “The fear isthat many people will be terminated based on foreign appearanceand name,” says Paparelli.As partial mitigation for this problem, in August 2007,the Department of Homeland Security issued new regulationsintended to clarify matters while providing a “safeharbor” for employers who hire foreign nationals. Theregulations define what steps employers must take withinwhat time periods to avoid legal liability for hiring undocumentedworkers.While the safe-harbor regulations were intended toreduce ambiguity, employers still face the costly task of26 PROGRESSIVE RENTALS

Associate Member since 1997

checking and double-checking documents. And the safeharborregulations carry their own heightened risk of financialpenalty. “The procedures defined in the rules arenot really voluntary,” says Paparelli. “The employer whofails to carry out the defined steps risks being chargedwith ‘constructive knowledge’ of the employment ofworkers who lack the right to work. This would put theemployer in violation of immigration laws.”An injunction by a federal court in late 2007 delayed implementationof the new regulations. However, the reprieveis expected to be short-lived. “We’re currently seeing whatwe can do to address the concerns that the judge entered inorder to see whether we can get the injunction lifted, andthen go forward with this regulation,” Homeland SecuritySecretary Michael Chertoff recently told Congress.The government has stated that it intends to reissue thesafe-harbor rules in revised form to satisfy the court’s concerns.This delay provides employers with additional timeto study the proposed rules as well any related regulationsthat are likely to flow from the federal pipeline. (For details,see the sidebar, “Safe Harbor for Employers.”)Staying informedMany feel that recent changes in federal regulationsrepresent an attempt to shift the border control effortfrom the government to the private sector. “Employers feelan unreasonable burden is being placed on their shouldersto control undocumented employees,” says attorney Tapia-Ruano. If more is expected of the employer than ever before,though, it only highlights the need to maintain vigilancein hiring procedures. As the face of America’s workforcechanges, employers can be sure there will be additionalchanges in federal, state and local regulations. JPhillip Perry is a business writer based in New York City.Getting helpEmployers requiring legal assistanceon immigration law may turn to theseresources:•• The Academy of Business ImmigrationLawyers, www.abil.com•• The American Immigration LawyersAssociation, www.aila.org•• FindLaw—categorizes attorneys by legalissue, including immigration law,http://lawyers.findlaw.comFEBRUARY-MARCH 2008 29

Looking for loyaltyin all the right places∂A bOOk R eview that M ay be 10 yeaRs toO lateBy buD hollA dayLet any store lose a 60-inch flat-panel TV andsomebody at corporate will let the dogs out;the world will stop spinning until the missinginventory is recovered, Homeland Security isnotified and all systems are adjusted. Does thesame thing happen when a two-year employeeis lost? How about when a longtime customerjust goes away? If you have been listening tomany experts or any of your peers, you have probably heardthat loyalty is dead. Arguably, in some companies it’s merely onlife support and family members have been notified. z Butthere is hope from an unlikely source: a 12-year-old book fromthat pop-culture factory, the Harvard Business School Press.In 310 pages, the authors blow up just about everything most ofus thought we knew about loyalty, customer retention and thepursuit of profit. Along with making the proposition that valuecreation should be the primary aim of business, it introducessomething called loyalty based management. Plenty of evidenceis offered up showing how such a shift in focus can easilygenerate up to a 50 percent improvement in performance overthe next five years. The book is The Loyalty Effect: The HiddenForce Behind Growth and Profit, by Frederick F. Reichheld (andThomas Teal). I found my copy in the storeroom of a companythat is going broke. You may have to find yours online; if yourcompany is also going broke you might want to pay extra forovernight shipping.FEBRUARY-MARCH 2008 31

Reichheld asserts that loyalty is neithera substitute for profit nor agimmick for making easy gains oradvances. His findings are based on10 years of research as a key playerat Bain Co., the global equity capitalfirm founded by current presidentialhopeful Mitt Romney. Reichheld’sresponsibilities there included evaluating companiesthat Bain had an interest in acquiring. Being a naturallycurious fellow, he came to wonder why some companiesthat seemed to have every conceivable advantage in themarketplace failed to outperform competitors that theyshould have flattened long ago. What he discovered mightbe akin to the Holy Grail of Growth.The most identifiable and effective financial advantageone company can hold over another is having a vastlyhigher rate of retention across its employees and customers.More than pricing, more than costs of productionor distribution, more than marketing, the rate at whichyour company retains its customers and employees willdetermine its financial performance over the long term.Reichheld puts it in terms we all understand: “Eachtime we found a performance record that was hard tosquare with the traditional economics taught in businessschools, we also found a company with superior loyalty.Each time we found a company with outstanding loyalty,we also discovered a company that was delivering superiorvalue to its customers and employees, and, at the sametime, generating inexplicably strong cash flows to fundinternal growth.” Value, not price, Reichheld and othersassert, is a measurable commodity if you know what tomeasure.He illustrates his point with examples of companiesthat raised their customer retention rates by just 5 percentand improved the value of a customer by as muchas 100 percent. Figure all the new products, replacementgoods and add-ons that a top tier rent-to-own customercan account for over several years and it’s easy to see thefinancial impact of holding on to your best customers.That means through business cycles, economic cycles,product cycles and sales cycles.∂Reichheld focuses on two costly mistakes that companiesmake in adding customers. The first is a generalfailure to quantify or study customer defections so longas replacements keep coming along. Second, most companiesmeasure the wrong things to reach inferior conclusionsabout customer retention. Defining the “rightcustomer” and measuring the impact of his loyalty on thefinancial health of the business is simply too complicatedfor many to bother with. The Loyalty Effect demonstrateshow to do it, in language that any business leader can understand.The right customer, according to Reichheld, isone with a long and unbroken history with the company,who keeps agreements, maintains a high level of loyaltyto the company and its values and regularly sends otherblue-ribbon customers or offers suggestions on ways thecompany can improve its delivery of products and services(“build value”). Reichheld claims that financial performancesupersedes demographics in identifying thistype of customer.Such customers universallyprove to generate higher returnswith less risk and lowercost of handling. It’s hard toargue that anything positiveresults when new employeesservice newly acquired customersand at the same time try to reshapethe business relationships alreadyin place with old customers. Yetthat is where most of our salesand marketing campaigns aredesigned to take us. The LoyaltyEffect explains how a companycan break this costly and unrewardingcycle and reinvest in acycle of loyalty, learning andvalue creation to hold ontoits best customers and itsbest employees.∂Nearly everybody knows about Mazlov’s “Hierarchyof Needs.” Perhaps only a handful has ever heardof its counterpoint, the “Hierarchy of Loyalties,” formulatedby Harvard philosophy professor Josiah Royce.Maybe that’s because his book, The Philosophy of Loyalty,was published a century ago and has never been featuredon Oprah. Royce determined that loyalties arrange themselvesin a hierarchy much like human needs are grouped.At the lowest level is loyalty to individuals. Then comesloyalty to groups. At the pinnacle is our practical devotion—“loyalty”—toa set of values and principles. It isour devotion to principles that tells us when and if thetime has come to end our loyalty to an individual orgroup. Loyalty to principles overrides all other loyalties.Managers who never learn this are doomed to failure bythe weight of masses of people churning through theirotherwise excellent processes.The overall theme running through The Loyalty Effectis that money spent on most employee initiatives andclever “loyalty” programs could be better spent studyingthe company’s value system and devising trainingmethods that would encourage managers and workers toexemplify, communicate and uphold company values intheir dealings with each other, with customers and withshareholders. Old Josiah was prescient in stating that thesuccessful business is the one that gains the most devotionto its principles, not its principals. What employeeever quit a job because he didn’t like the price of a refrigeratoror the service schedule on Wednesday?32 PROGRESSIVE RENTALS

About value creation. The Loyalty Effect describes twokinds of profit. Virtuous profit is the result of creatingvalue, sharing it and building assets. Those assets includehuman capital of the customer and the employee type (anotion certain to give your CPA heartburn). Destructiveprofit comes from exploiting assets to generate the shorttermearnings demanded by bankers, investors and mostowners. That means giving up on the oldest, most valuablecustomers and employees because the company hassimply run out of ideas on how to keep either and is unwillingto restructure itself so that tenured workers canfind profitable ways to better serve longstanding and wellunderstood customers. In other words, build value.Firms that practice loyalty-based management integratecustomer acquisition, benchmark hiring and compensation,productivity improvements, learning, motivationand the building of value. They do not celebrateshort-term gains in counts or numbers that are easily manipulatedand prone to wild swings. Based on his findings,Reichheld describes a loyalty based company thusly:“Revenues and market share increase as the best customerscome into the business, building repeat sales andsafe, low-cost referral business. Because the companyoffers great value, it can be more selective in new customeracquisition. This stimulates sustainable, profitablegrowth from reduced outlays.”Sustainable growth enables the company to attractand retain the best employees.Consistent delivery of superiorvalue to worthy customersincreases employee loyaltyby giving people pride andsatisfaction in what they do.As the long-term employeegets to know his long-termcustomers better, he learns howto deliver still more value—further reinforcing both customerand employee loyalty.Loyal long-term employeesutilize OJT to reducecosts and improve quality ontheir own, further enriching thecustomer value proposition andcreating high productivity. Thecompany can then use thisproductivity surplus to fundsuperior compensation and better tools and training—further reinforcing employee productivity, compensationgrowth and loyalty.Spiraling productivity coupled with the increased efficiencyof dealing with loyal customers generates thekind of cost advantage that is difficult for competitors tomatch. Sustainable cost advantage coupled with steadygrowth in the number of loyal customers generates thekind of profits that are very appealing to investors, whichmakes it easier for the firm to attract and retain the rightinvestors (or, in some cases, lenders or partners).The list of companies that have been successful usingthis approach includes many household names acrossdozens of industries, including retail.A third of the way through The Loyalty Effect, theauthor offers something called a “Generic Model of theSeven Economic Effects Associated with Employee Loyalty.”Although that comes dangerously close to Harvardspeak,the model is elegant in its plainness, addressingrecruiting, training, efficiency, customer selection, customerretention, customer referral and employee referral.Get these right and your business grows exponentially.Get most of them wrong and, well…∂Changing old practices takes equal amounts of courage,confidence and cash in the bank. Reichheldreminds us that people learn, organizations don’t. Theburden is on senior management to lead the charge. Loyaltydoes not percolate up from the bottom because ofslogans, pretty stores or promises. The things that createloyalty—principles, values, ideals—must flow down fromthe top and be seen walking around the back room, thehallways, the front office, the company picnic. Reichheldand Royce, writing a century apart, agree that employeeswho do not share your values cannot share your beliefs;if people do not share your beliefs, you are communicatingin a vacuum, talking about goals and objectives thatinterest no one and will never come to fruition.A little chicken sandwich company from Georgia madehuge inroads in the fast-food industry with two simplebut bold statements: pay a store manager half of the profitearned by his unit and close every store on Sunday. It’s nocoincidence that manager turnover at Chick-Fil-A runs toabout 5 percent annually. Five percent! Chick-Fil-A managersstay long enough and have a big enough stake inthe P&L that they are tireless in discovering any wasteddollar, any overlooked source of new revenue. Contrastthis with the manager at the pizza joint or rent-to-ownstore across the street who may be there a couple of yearsat most and spend those in constant search of the “homerun.” A $100 monthly cost-saving just doesn’t mean much,unless you work for Chick-Fil-A and you know that halfof that $100 a month is yours, every month for an averageof 14 years!If your business is suffering the effects of high employeeturnover and a rapidly churning customer base, or youare just not having as much fun as you once did, I recommendyou spend a few hours alone one evening with TheLoyalty Effect. You won’t be lonely long. JBud Holladay is a founding member of the Associationof Progressive Rental Organizations, was APRO’s firstpresident and continues to write about and ponderthe rent-to-own industry. His e-mail address isbudholladaysells@yahoo.com. Holladay lives inCorpus Christi, Texas.FEBRUARY-MARCH 2008 33

y geoff williamsThe market forluxury items istaking a cue fromthe rent-to-ownindustryhere was, we thought, a natural order tothe universe. It’s difficult to imagine thatanyone in the industry liked it, but nobodyquestioned that here and there certaingroups and individuals attached a negativestigma to the notion of renting to own. VossGraham, business consultant and author ofThe Three Games of Selling, put the rent-toownimage problem bluntly: “It will take amedia blitz to change the perceptions thatpeople—including the middle class—haveof the industry. That image is the product ischeap and quality is low.”34 PROGRESSIVE RENTALS

But there is a trend infiltrating the affluentand upper middle class societies. A trendthat begs a couple of questions: Is the negativeimage of rent-to-own passé? In fact,are other consumer groups and companiesactually starting to follow the pathcreated by the rent-to-own industry?This trend is called fractional ownership. The ideais pretty simple, really. Instead of buying a private jet,yacht or exotic car, wealthy people have instead beenbuying a part of their luxury item. So rather than owningan entire Mercedes-Benz CL 600 (with a retail priceof about $120,000), they might lay claim to one-fifth ofit: the car being at their disposal 73days out of every year and the restof the time with someone else.Even some financialexperts are seeing thewisdom in sometimespaying for accessinstead of going forcomplete ownership.Shemin says that“absolutely,” he can seehow the concepts offractional ownershipand rent-to-ownare becoming lessdistinguishable.Which is perfectly reasonable,says author Robert Shemin, a multimillionaireand author of HowCome That Idiot’s Rich and I’mNot? (Crown, March 2008). “I tellpeople that ownership and rentingare purely psychological,” says Shemin.“People love to own thingsfor piece of mind and there are certainassets that are a good investment.”The good investment assets,however, are few and far betweenwhen it comes to keeping up withthe Joneses.Fractional ownership goes beyondthe enormous—and typicallyenormously depreciable—assetssuch as cars, yachts, jets and helicoptersor even race horses. Forexample, Bag Borrow or Steal is aSeattle-based company that allowsits customers to rent ladies’ luxury goods like Tiffany’sjewelry or designer handbags. Wish you could afford a$5,000 designer purse? No problem: pay a monthly fee,anywhere from $20 to $100 a month, and you can “own”handbags and jewelry until you’re tired of them—and thenmail the product back and/or replace it with somethingnew. The company is a startup that investors believe willsucceed. The company so far has raised more than $12million. And there’s already competition from the onlinestore, FromBagstoRiches.com, which tags itself as “the affordablealternative to buying designer handbags.”Whether it’s fractional ownership, renting handbagsor whatever you want to call it, something different is inthe air. Even some financial experts are seeing the wisdomin sometimes paying for access instead of going forcomplete ownership. Shemin says that “absolutely,” hecan see how the concepts of fractional ownership andrent-to-own are becoming less distinguishable. “It’s allsimilar and people are becoming more aware of rent-toown.It’s still fairly new. I mean, 30 or 40 years ago, youcouldn’t rent to own.”Well, you probably could, but we know what hemeans. Rent-to-own stores could not be found in everyneighborhood in the 1960s and 1970s as they are todayand, if there were image problems during the 1980s and1990s, the first decade of the 2000s is looking decidedlydifferent as businesses creatively adapt to consumerneeds and budgets and are borrowing concepts fromeach other.Yes, it sounds off-kilter, but rent-to-own has beenco-opted by the mainstream. If the wealthy don’t wantto “fractionally own” a car or a yacht and they don’twant to blow a wad of dough onthe whole thing, they can join amembership club and “rent” theexotic cars and yachts. Meanwhile,the rich, middle-class and poorall see the value in using Netflix,where you pay a monthly fee to“rent” whatever movies you want towatch. You keep the movies as longas you want—they’re yours—butyou keep paying that fee. Or youtrade the movies for somethingelse. Either way, you’re continuallypaying a smaller monthly fee insteadof spending the much higherpurchase price right up front.Greg Tanner, franchise developmentdirector for Aaron’s Salesand Lease, certainly sees how hisown industry and the fractionalownership industry seem to be approachingeach other’s territories.“We used to be located in theback alleys,” says Tanner, “butwe’ve seen our business increase to middle America,because we’ve positioned our stores right next to theBest Buys and Circuit Cities. We’re where people shop.Our philosophy is that lower-income people will shopup. They’ll come to the mall, right? But middle Americaand above, they will not shop below or far below theirincome level. They’ll come to a point and stop.“We don’t even use the words ‘rent to own’ in our slogansany more,” says Tanner. “We’re just Aaron’s. Youcan pay cash, use Visa or MasterCard and do 90-dayssame-as-cash.We use the term ‘lease.’ We’ve gone completelyaway from the term ‘rent’ because, you know,they can bring it back anytime they want.”And Tanner notes that just like the women who fractionallyown or rent purses, “when you buy, say, a widescreenTV from us and a few weeks later you think,‘Well, shoot, I wish I had that one,’ you can send yoursback to us and you can get a new one. It is,” says Tanner,“a shared ownership.”

But the general public will never see it the way Tannerdoes without educating the public, says Graham,who aside from writing about sales is also the CEO ofthe InnerActive Consulting Group in Cordova, Tennessee.Graham thinks the rent-to-own industry shouldn’tworry about advertising so much as changing the public’sperception. “If people actually read an ad, it’s forsome factual information or a validation of an existingprogram,” says Graham. He feels that going after localnewspapers, television and radio stations—somethingthe RTO industry has often done when, for instance, becominginvolved in community charities—is the way tochange hearts and minds.But how do you do that? If Graham were king of therent-to-own industry for a day, he says that he would“focus on the small-business people first, the ones whowork out of their homes, small offices, shared offices orexecutive suites. These people do not have the capital inmost cases to invest in furniture and fixtures—yet canpay the monthly fee of a rental. Since some of these peoplewill actually grow their business and have to hiremore people and rent bigger spaces, they will requiremore furniture.”And how did Graham come to think this way? Because,just as the affluent and middle classes have been,his own perception changed. In 1991, he and his wife,Robin, moved their business from the home to a suiteof offices. “As a business advisor,” says Graham, “I hadlearned that furniture was a bad investment—since itwould depreciate immediately after being purchased,like an automobile, and there would be little resale value.Using the rent-to-own process, we saved our cash,had some security knowing they would take everythingback if our venture was not successful and still got nice,though not high-end, quality furniture that we are stillusing 16 years later.”As more Voss Grahams experience thosetype of results and as more people rentor fractionally own everything frompurses to Porsches, the feel-good moodtoward renting to own seems to bemarching toward the industry. Andeven if it doesn’t, maybe it doesn’t matter.As Shemin says of the relatively young rent-to-ownindustry, “As people become more educated and consumersbecome more sophisticated, the businesses getbetter.”In other words, fractional ownership and renting highluxury items on a short-term basis won’t hurt the rent-toownindustry. It may even—if just fractionally—help. JGeoff Williams is a freelance writer based in Ohio.His e-mail address is gwilliams1@cinci.rr.com.Make the ConnectionAPRO’s 2008Rent-to-OwnConvention andBuying ShowAugust 11–14St. LouisSave the dates for therent-to-own industry’spremier gathering ofdealers and vendorsfrom across the country.In 2008, it’s a newlocation—St. Louis, thebeautiful Gateway to theWest—with many newfeatures added to theconvention and buyingshow to help you andyour business thrive. It’syour best opportunity toreconnect with friendsand colleagues in therent-to-own industry andmake new connectionsthat can last a lifetime.So make the connection!Rent-to-ownConnectionsAPRO2008Watch your mailbox in thecoming weeks for details—or log onto www.RTOHQ.org.FEBRUARY-MARCH 2008 37

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WHO’S WHO INMiscellaneous RTO servicesThe following is a list of miscellaneous services that cater to the rent-to-own industry. All companies are either APRO associate members (*), advertisersAccounting ServicesHigh Touch Inc. *^+Contact: John Rogers2020 N. Amidon Ave.Wichita, KS 67203-3366316/832-1611; fax 316/831-5555johnr@hightouchinc.comwww.hightouchinc.comKirkpatrick, Sprecker & Co. LLP *Contact: Jim Hubbard, CPA311 S. Hillside St.Wichita, KS 67211-2130316/685-1411; fax 316/685-4575jim@kscpa.comwww.kscpa.comWhite & Associates LLC *Contact: Michael S. White201 N. Main St., Ste. 300Wichita, KS 67202-1500316/265-4877; fax 316/263-3013MWhite@wacpa1.comWhitsell and Co. PC *Contact: Daniel G. Whitsell1275 Road To Six Flags St. E., Ste. 100Arlington, TX 76011-5045817/461-0041; fax 817/795-0025cpa@whitsellandcompany.comwww.whitsellandcompany.comAdvertising/PromotionalAd Design Inc. *Contact: Greg Batt7015 Old US 24 E.Huntington, IN 46750260/359-2068; fax 260/359-2070greg@addesignonline.comwww.addesignonline.comAdpro Advertising *^+Contact: Rick DelcampP.O. Box 610Dover, AR 72837-0610479/331-2526, ext. 25;fax 479/331-4640sales@adpro-ads.comwww.adpro-ads.comBanner Retail Marketing *Contact: Lena Martin23305 E. Knox Ave.Liberty Lake, WA 99019-9461509/922-7828; fax 509/922-7950lena@bannerretail.comwww.bannerretail.comCentral File Inc. *^+Contact: Alan Benson5277 W. Beaver Creek Pkwy.Brown Deer, WI 53223-2303414/365-9000; fax 414/365-9001al@centralfileinc.comwww.centralfileinc.comColor Ad *Contact: Daryl Oldenkamp19627 S. Santa Fe Ave.Compton, CA 90221-5914888/264-6991; fax 888/229-0615daryl@gocolorad.comwww.gocolorad.comG&G Graphics and Promotions *Contact: Gene Pharis6850 Shiloh Rd. E., Ste. AAlpharetta, GA 30005-2261678/947-3700; fax 678/947-8688gene@gggraphics.comwww.gggraphics.comICE ^Contact: Michael Garceau68 Rt. 125Kingston, NH 03848-3562603/347-3005; fax 603/642-9290mgarceau@icesigns.comwww.icesigns.comImagery Marketing Consultants *^+Contact: Marty Smith13523 Barrett Pkwy. Dr., Ste. 104Ballwin, MO 63021-3802314/835-0004; fax 314/835-1650martys@imageryadv.comwww.imageryadv.comLet’s Print Ink/America On Hold *^Contact: Bonnie Nitzsche7569 Barret Rd.West Chester, OH 45069-2604800/83-PRINT; fax 513/777-5757bnitzsche@cinci.rr.comwww.letsprintink.comPromobiz.com *^Contact: John Howard3325 Bryan Ave.Fort Worth, TX 76110-4206817/923-1368; fax 817/923-1484jhoward@promobiz.comwww.promobiz.comRTO TV *^+Contact: Rick Linton13523 Barrett Parkway Dr., Ste. 104Ballwin, MO 63021-3802314/835-0004; fax 314/835-1650rickl@imageryadv.comwww.rtotv.comThompson Wells Advertising Ltd. *Contact: Keith Labahn1828 E. Mulberry St.Fort Collins, CO 80524-4624970/221-2198; fax 970/493-3427aartotax@aol.comAutomobilesSouth East Auto DealersRental Association Inc. *Contact: John Garner128 Fairway Dr.Covington, LA 70433-4907504/241-0211; fax 504/241-0205jggarner88@hotmail.comBuying GroupsRentDirect Nationwide *^+Contact: James MacAlpine110 Oakwood Dr., Ste. 200Winston Salem, NC 27103-1958336/722-4681; fax 336/714-9760jamesm@nationwidegroup.orgwww.gorentdirect.comTRIB Group *^+Contact: Dennis Shields2775 Cruse Rd., Ste. 2401Lawrenceville, GA 30044-7148770/451-4302, ext. 1; fax 770/451-4312dennis@tribgroup.comwww.tribgroup.comCollection Agency/Debt BuyerNorAm Capital Holdings Inc. *Contact: Rudy CedP.O. Box 9250Dallas, TX 75209-9250888/886-6726; fax 214/296-9182rudy@noramcapital.comwww.noramcapital.comCustomer Background ChecksTeletrack Inc. *^+5550-A Peachtree Pkwy., Ste. 600Norcross, GA 30092-2555800/729-6981, ext. 3;fax 770/449-6647webinfo@teletrack.comwww.teletrack.comFinancial ServicesHigh Touch Inc. *^+Contact: John Rogers2020 N. Amidon Ave.Wichita, KS 67203-3366316/832-1611; fax 316/831-5555johnr@hightouchinc.comwww.hightouchinc.comIAM Financial Services *Contact: Steve Brown2515 Lincoln Dr., Ste. BClarksville, IN 47129-1620866/300-2070, ext. 102;fax 812/944-5635stevebrown@ezcreditwarehouse.comwww.iamrto.com; log-in: iamrto;password: tan33bedLynnray Financial Corp. *+Contact: Bill Lassiter5696 Peachtree Pkwy.Norcross, GA 30092-2855800/535-4138, ext. 101;fax 770/263-3775blassiter@lynnrayfinancial.comwww.lynnrayfinancial.comMoneris Solutions Corp. *^+~Contact: Pat Albright150 N. Martingale Rd., Ste. 900Schaumburg, IL 60173-2081425/557-4774; fax 425/677-7399pat.albright@moneris.comwww.monerisusa.comNorAm Capital Holdings Inc. *Contact: Rudy CedP.O. Box 9250Dallas, TX 75209-9250888/886-6726; fax 214/296-9182rudy@noramcapital.comwww.noramcapital.comPetz Enterprises Inc *Contact: Leroy E. Petz Sr.P.O. Box 611Tracy, CA 95378-0611209/835-2720; fax 209/835-2758leroy@petzent.comwww.petzent.comProgressive Finance *Contact: Brent Wilson3877 S. 400 E.Salt Lake City, UT 84115-4607801/685-7999, ext. 301;fax 877/966-2888jake@progfinance.comWhite & Associates LLC *Contact: Michael S. White201 N. Main. St., Ste. 300Wichita, KS 67202-1500316/265-4877; fax 316/263-3013MWhite@wacpa1.comWhiteco Commercial Funding *Contact: Bill White621 S. Bryan Belt Line Rd.Mesquite, TX 75149-5070972/288-4344; fax 972/288-4313bwhite@whiteproperties.comFranchise OpportunitiesAaron’s Sales & Lease Ownership *^Contact: Todd Evans309 E. Paces Ferry Rd. N.E.Atlanta, GA 30305-2367678/402-3411; fax 678/402-3575todd.evans@aaronrents.comwww.aaronrents.comColorTyme Inc. *^+Contact: James Deering5501 Headquarters Dr.Plano, TX 75024-5837972/403-4950; fax 972/403-4936jdeering@colortyme.comwww.colortyme.com46 PROGRESSIVE RENTALS

in APRO publications (+), APRO Buying Show exhibitors (^) or APRO-endorsed member benefit program providers (~).easyhome Ltd. *^+Contact: David Ingram77 City Centre Dr., Ste. 600Mississauga, Ontario L5B 1M5Canada905/272-2788; fax 905/272-9886ingrada@easyhome.cawww.easyhome.caJ.D. Byrider Systems Inc. *^+Contact: Steve Wedding12802 Hamilton Crossing Blvd.Carmel, IN 46032-5424317/249-3040; fax 317/249-3041stevew@jdbyrider.comwww.jdbyrider.comMusic House, a division ofMolinari Enterprises Inc. *^+Contact: Dan Molinari3100 Airway Ave., Ste. 119Costa Mesa, CA 92626-4604714/429-2300, ext. 222;fax 714/429-2323dmolinari@musichouse.comwww.musichouse.comThe Premier Companies *+Contact: Trooper EarleP.O. Box 244Lightfoot, VA 23090-0244757/592-2720; fax 757/258-9262troop@premierrents.comwww.premierrents.netRent America Inc. *Contact: Larry Tinney5408 Yadkin Rd.Fayetteville, NC 28303-3194910/864-5778; fax 910/864-4790raiking@aol.comwww.rentamerica.comRent ‘N Go Custom Wheels and Tires *Contact: Bob Catino5219 N. State Rd. 7Tamarac, FL 33319-3323954/735-0900; fax 954/735-0043bob@rent-n-go.comwww.rent-n-go.comRent-n-Roll LLC, dba Rent-n-RollCustom Wheels and Tires *^Contact: Larry Sutton14620 N. Nebraska Ave., Ste. BTampa, FL 33613-1420813/977-9800; fax 813/978-0584lsutton@rentnroll.comwww.rentnroll.comRIMCO Custom Wheels and Tires *Contact: John Allevato309 E. Paces Ferry Rd. N.E.Atlanta, GA 30305-2367678/402-3703; fax 678/402-3575john.allevato@aaronrents.comInsuranceBenefit Marketing Solutions *^+Contact: Susan Matthews621 S. Bryan Belt Line Rd.Mesquite, TX 75149-5070972/285-1355; fax 972/288-4313smatthews@benefitmarketingsolutions.comwww.benefitmarketingsolutions.comRTO Insurance LLC,a subsidiary of Integrated Insurance &Risk Management *^~Contact: Robert P. Scott1912 N. Sheridan Rd.Peoria, IL 61604-3453309/686-3737; fax 309/686-3771roberts@iirm.comwww.iirm.comRTO Systems Inc./Walter Clark & Associates *^~Contact: Jeanette Beardsley CPIW, AIS1055 W. Morton Ave., Ste. CPorterville, CA 93257-1988559/781-3466; fax 559/781-4956jeanetteb@wlcins.comStrategic Marketing Associates Inc. *~Contact: Alan Stein3000 Old Alabama Rd., Ste. 119-309Alpharetta, GA 30022-5860770/740-8100; fax 866/765-2420alans@smaadvantage.comwww.smaadvantage.comLegal ServicesMartinec, Winn, Vickers and McElroy ~Contact: Ed Winn600 Congress Ave., Ste. 500Austin, TX 78701-2957512/476-0750; fax 512/476-0753edwinn@mwvmlaw.comMail ServicesCentral File Inc. *^+Contact: Alan Benson5277 W. Beaver Creek Pkwy.Brown Deer, WI 53223-2303414/365-9000; fax 414/365-9001al@centralfileinc.comwww.centralfileinc.comProspects/Unlimited *^Contact: Robert J. Dana408 Pythian Rd.Santa Rosa, CA 95409-6325707/539-2742; fax 707/539-2742dufferbob@sbcglobal.netwww.rtorenterlists.comMusical InstrumentsDBL Distributing Inc. *Contact: David B. Lorsch16698 N. 94th St.Scottsdale, AZ 85260480/596-8636; fax 480/483-8293breusing@dbldistributing.comwww.dbldistributing.comMusic House, a division ofMolinari Enterprises Inc. *^+Contact: Dan Molinari3100 Airway Ave., Ste. 119Costa Mesa, CA 92626-4604714/429-2300, ext. 222;fax 714/429-2323dmolinari@musichouse.comwww.musichouse.comNational Educational Music Co. *Contact: Ken Maehl1181 U.S. Hwy. 22Mountainside, NJ 07092-2807908/232-6700, ext. 230;fax 908/232-3149kpmaehl@eclipse.netwww.nemc.comPetra Industries *^Contact: Bill Stewart2101 S. Kelly Ave.Edmond, OK 73013-3665405/216-2100; fax 800/997-3872jherzberger@petra.comwww.petra.com/rto_index.phpYamaha Music ^Contact: Tom Murphy6600 Orangethorpe Ave.Buena Park, CA 90620-1396800/386-8744; fax 813/925-1410tmurphy@motivatedmarketing.comwww.yamaha.comOffice SuppliesLonesource Inc. *Contact: Tripp Rogers115 Mackenan Dr.Cary, NC 27511-7903919/459-8205; fax 919/466-7072tripp_rogersy@lonesource.comwww.lonesource.comOn-Hold MessagingLet’s Print Ink/America On Hold *^Contact: Bonnie Nitzsche7569 Barret Rd.West Chester, OH 45069-2604800/83-PRINT; fax 513/777-5757bnitzsche@cinci.rr.comwww.letsprintink.comPayroll andInsurance ServicesCM Services Inc. *Contact: Jeff KearnsP.O. Box 270536 Maple Valley Dr.Farmington, MO 63640-0270800/888-8179; fax 786/513-3967jlkfountain@aol.comwww.cms-service.comSkip/Trace andConsumer InformationTeletrack Inc. *^+5550-A Peachtree Pkwy., Ste. 600Norcross, GA 30092-2555800/729-6981, ext. 3; fax 770/449-6647webinfo@teletrack.comwww.teletrack.comTrucksAdobe Equipment Truck Center Inc. *^Contact: Michelle Dunning2915 Lawrenceville Hwy.Tucker, GA 30084-8130770/496-1000; fax 770/270-6774Micki777@aol.comwww.adobetrucks.comFLX Industries Inc. *^Contact: Alan H. PetersP.O. Box 520Pikeville, TN 37367-0520423/447-2187, ext. 23; fax 423/447-6502flxadmin_1@bledsoe.netwww.flxtrucks.comWage-and-Hour ConsultingHarry Weisbrod Assoc. Inc. ~Contact: Brian FarringtonP.O. Box 330088Ft. Worth, TX 76163817/429-8011; fax 817/423-0999btfjd@aol.comWarehouse andDelivery SuppliesRES Accessories *^Contact: Michael E. Gerwe Jr.4909 W. Nassau St.Tampa, FL 33607-3813800/444-7304, ext. 210; fax 800/444-7312mgjr@resacc.comwww.resacc.comSandhill Quilting Moving Pads,Supplies & Equipment *^Contact: George Walters Jr., Sue Quick568 Antioch Church Rd.Bennettsville, SC 29512-5810866/783-7237; fax 843/479-2696sandhilquilt@shtc.netwww.sandhillquilting.comFEBRUARY-MARCH 2008 47

APRO: THE VALUE OF ASSOCIATIONADVERTISER INDEXAPRO Member Services..................48ArchBrook Laguna...........................27ColorTyme.................................. IFC–1D&H Distributors............................... 2Easyhome...........................................13GE Appliances................................ IBCHigh Touch.......................................... 5Imagery Marketing Consultants.... 19LG Electronics..................................BCPremier Rental-Purchase................48Rental Information Systems........... 15RentDirect Nationwide............. 24–25RSSS.................................................... 11RTO Pro Software............................ 19SED International.............................45Speed Queen...................................... 14St. Louis Convention & VisitorsCommission...................................44Teletrack.............................................28TRIB Group....................................... 10Twin-Star International/ClassicFlame..................................... 6Open YourOwnRTO CompanyWe areafranchising companythat provides startup andongoing assistance to experiencedRTO operators. We can provide financialassistance with startupcapital and have a program to helpnew business owners obtain inventoryfinancing with SBA GuaranteedLoan assistance. If you havethe desire to own your RTO company,this is an opportunity youmust review. See our Web site atwww.premierrents.net for completedetails or callTrooper Earleat (800) 2-Premier.EQUITY INVESTMENT FUND ANDSBA LOANASSISTANCEAPRO general counsel: Ed WinnIII, APRO’s general counsel, provideslimited free legal advice to APROmembers. Contact him at 512/476-0750,edwinn@mwvmlaw.com.Rent-to-own Convention andBuying Show: APRO’s annual eventbrings more than 100 companiescatering to the rent-to-own industrytogether with rental dealers from allover the country. There are educationalsessions presented by respectedexperts in addition to networkingopportunities and social events.public relations: Studio-producedtelevision and radio advertising areavailable free to members. APRO alsorepresents member companies whenmedia crises arise. The public relationscampaign includes image-buildingadvertising materials and coordinationof the industry’s commitment tocharitable causes. Contact Richard Mayat 800/204-2776, ext. 104,rmay@aprovision.org.government relations: APRO hasspearheaded the national safe-harborlegislative effort and implementedpassage of state safe-harbor laws in 47states. It maintains a grassroots networkof members supporting federal and statelegislative efforts and provides directfinancial support to candidates whoare advocates of our industry. ContactRichard May at 800/207-2776, ext. 104,rmay@aprovision.org.Rental Training Online: RentalTraining Online is an online educationprogram designed specifically for therent-to-own industry. ContactShelley Martinek at 512/225-1041,smartinek@aprovision.org.APROEXCLUSIVE MEMBER SERVICESWage-and-hour consultation:The law offices of Brian T. Farringtonprovide limited free wage-and-hourconsultation to APRO members.Contact Brian Farrington, 817/429-8011.Group health insurance: TrustmarkAffinity Markets and IntegratedInsurance provide an exclusivehealth insurance program for APROmembers, featuring discounted rates,group buying power, more than 40networks and a claims-stabilizationfund. Contact Robert Scott, RTOInsurance, 309/686-3737, or GeorgeMichelic, Trustmark Affinity Markets,847/283-2041.Commercial insurance: APROendorsedcommercial insurance offersproperty, liability, auto and workers’compensation programs customizedto fit RTO’s needs. Contact Barry L.Gambini or Jeanette Beardsley,RTO Systems/Walter Clark& Associates, 559/592-5777 or559/781-3466, jeanetteb@wlcins.com.Credit/debit card program:Moneris Solutions provides a credit/debit card program with premiumservice and exclusive rates. ContactJoe Garza, 847/352-0787, joe.garza@moneris.com.Industry research: APRO offers awide range of exclusive statistics andsurvey results for RTO dealers andthose on Wall Street wishing to investin our industry. Contact Laurie Hill at512/225-1045, lhill@aprovision.org.www.rtohq.org48 PROGRESSIVE RENTALS

NO.81CONFESSIONS FROMTHE KITCHEN“MY REFRIGERATORIS MORE ORGANIZED THANMY SHOE CLOSET.”GE Profile You are the very picture of organization.In your much admired shoe closet. And, inyour refrigerator to boot. The new GE Profilerefrigerator features two freezer drawers topolish your organizational skills - no shufflingand digging through freezer items to get tothe Rocky Road you’re craving. The upperdrawer is great for everyday foods and iswide enough to fit a frozen pizza, while thelower drawer gives you flexibility with both amiddle basket for smaller items and a bottombasket for larger ones. And, the refrigeratorlaces it all together, with adjustable shelvesthat move up and down and a QuickSpaceshelf that folds in to make room for talleritems. Tie it all up with a full width deli drawerand convenient beverage rack, so even yourfood behaves in an orderly fashion. Nextstop: your husband’s workbench.Learn more and share your confessionat gekitchenconfessions.comContact your Rental Sales Manager for product and pricing information Associate Member since 1992Paula Allison800.782.8093Paul Eichberger800.782.8097Fax866.238.6595

42” LCD Integrated HDTV