Aarons 2004 Annual Report Download - page 9

7
Company-Operated Sales &
Lease Ownership Store
Rental Revenues
Aggressive Store Expansion
The Aaron’s Sales & Lease Ownership
franchise program set new records in 2004,
the 12th year of the Company’s franchising
history. Area development agreements for a record
160 stores were awarded, a 43% increase over the
number of 2003 awards. Aaron’s franchise program
has been highly beneficial to both franchisees and
the Company. The franchisees benefit from Aaron’s
national reputation, industry experience, operating
standards and purchasing, manufacturing and
distribution systems. The benefits to Aaron’s
include a steadily growing stream of franchise
revenues and the opportunity to accelerate store
growth. The number of franchised stores has more
than doubled over the past four years, and the
pipeline of stores scheduled to open over the next
few years (301) is nearly as great as the 2004
year-end franchised store count of 357.
From the development of an individual business
plan during the start-up phase, Aaron’s supports
franchise principals with a full range of services.
Franchisees utilize the expertise of the Aaron’s
system in the store site selection process. In addition,
Aaron’s provides franchise principals with initial
and ongoing training in the management and
operation of Aaron’s stores as well as necessary
computer software and assistance in advertising,
marketing and publicity. Aaron’s willingness to
repurchase stores from time to time provides
an exit strategy for franchisees and attractive
acquisition opportunities for the Company.
The Aaron’s Sales & Lease Ownership franchise
program has attracted a variety of experienced
business professionals, including former executives
in banking, broadcasting, multi-unit restaurant
operations and manufacturing. Aaron’s franchisees
achieving strong and profitable growth with their
first Aaron’s stores often acquire additional franchise
territories. The typical franchisee owns and operates
three to four store locations, but some major groups
operate more than 30 locations. Franchisees operate
stores in 43 states and Canada.
Franchise Operations
A Growth Multiplier
Electronics and Appliances 52%
Furniture 35%
Computers 12%
Other 1%
200420001999 2001 2002 2003
Franchised Sales & Lease Ownership Stores
Company-Operated Sales & Lease Ownership Stores
Rent-to-Rent Stores
(stores)
0
200
400
600
800
1,000
1,200