Aarons 2002 Annual Report Download - page 11

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9
The Aaron’s Sales & Lease Owner-
ship franchise program reached
new milestones last year, the
tenth year of the Company’s fran-
chising history. The Company awarded
a record 151 stores in markets across
the country.
The franchise program is a win-win
situation. The franchisees benefit from
Aaron’s national reputation, industry
experience, operating standards and the
Aaron’s purchasing, manufacturing, and
distribution system. Aaron’s benefits
from a steadily growing stream of fran-
chise revenues, the ability to grow faster
using franchisee management talents, as
well as the opportunity to accelerate
store growth without a commensurate
step-up in capital requirements. The
number of franchise stores has more
than doubled over the past five years
and the backlog of 213 stores scheduled
to open over the next few years is nearly
equal to the existing store base of 232
franchise store locations at year-end
2002. A key indication of franchisee
satisfaction is that approximately half
of the new stores awarded in 2002 were
to existing franchisees.
The Aaron’s Sales & Lease Ownership
franchise program has attracted a vari-
ety of experienced business professionals
including former executives in banking,
broadcasting, multi-unit restaurant
operations, and manufacturing. In addi-
tion, Aaron’s has been fortunate to
attract strong operating management
from the home furnishings retailing
industry who see the Aaron’s business
model as a superior way to address the
market opportunity. Franchise princi-
pals who experience strong and prof-
itable growth with their first Aaron’s
stores often acquire additional franchise
territories. This provides the benefits of
common marketing programs as well
as economies of scale and other opera-
tional synergies to improve profitability.
The typical franchisee owns and
operates three to four store locations
but some major groups operate many
more locations.
The Aaron’s support program for fran-
chise principals includes the full range
of services needed, from start-up to
ongoing profitable operations. First, the
FRANK MERCARDANTE, DAVID SEWART, DAN SPECK, ROBERT HILL, NANCY MARTIN,
TOM VANDE GUCHTE, AND TOM MARTIN (FROM LEFT TO RIGHT IN THE PHOTOGRAPH)
JOINED THE AARON’S FRANCHISE TEAM IN 2002. COLLECTIVELY, THESE INDIVIDUALS
PLAN TO OPEN 25 STORES OVER THE NEXT THREE YEARS.
FRANCHISING: NEW MILESTONES