Rent-A-Center

Rent-A-Center, Inc.

Company type	Public
Industry	Rent-to-own retail
Founded	1986
Headquarters	Plano, Texas , United States
Area served	United States, Puerto Rico, Mexico
Key people	Mitchell Fadel (CEO), Fahmi Karam (CFO)
Products	Furniture, electronics, appliances, computers
Revenue	$4.16 billion (2024)
Total assets	$2.62 billion (2024)
Website	www.rentacenter.com

Rent-A-Center is a publicly traded American company specializing in furniture and electronics through a rent-to-own business model, with its headquarters located in Plano, Texas. Established in 1986, the company operates approximately 2,972 stores owned directly by the corporation throughout the United States, Puerto Rico, and Mexico, capturing nearly 35% of the U.S. rent-to-own market based on store numbers.

The business also manages 24 Get It Now retail installment locations in Wisconsin along with 17 Home Choice outlets in Minnesota. Its subsidiary, Rent-A-Center Franchising International Inc. (RACFI), which was previously known as ColorTyme Inc., serves as a prominent franchisor of independently operated rent-to-own stores. Franchise operators run 162 locations under the Rent-A-Center and ColorTyme banners across 31 states, while the RimTyme franchise focuses on wheels and tires with 31 stores spanning 13 states.

In 2014, Fortune Magazine placed Rent-A-Center at number 711 on its Fortune 1000 ranking based on revenue figures. The company generated $4.16 billion in revenue during 2024 and reported assets totaling $2.62 billion. Leadership includes CEO Mitchell Fadel and CFO Fahmi Karam.

History

The origins of the rent-to-own industry trace back to the 1960s in Wichita, Kansas, where Ernie Talley operated Mr. T's Rental, a store that eventually allowed customers to gain ownership of rented washers and dryers. Thomas Devlin, once an employee there, teamed up with W. Frank Barton to establish Rent-A-Center in Wichita in 1973.

Mark Speese became part of Rent-A-Center in 1979. By 1986, Speese and a partner departed to form Vista Rent-To-Own. Ernest Talley took on the role of chairman at Vista in 1989, steering its transformation into what would become Rent-A-Center. In 1987, Thorn EMI purchased Rent-A-Center for $594 million.

Following an acquisition of an 84-store chain spanning twelve states, Vista Rent-To-Own rebranded itself as Renters Choice, Inc. in 1993. Two years later, Renters Choice went public on NASDAQ under the ticker "RCII." In August 1998, Renters Choice expanded by acquiring Thorn Americas, Inc., which added 1,474 stores nationwide operating under the "Rent-A-Center" brand. By the end of that year, the company adopted the Rent-A-Center name and consolidated its branding efforts.

After Talley retired in 2001, Speese assumed the roles of Chairman and CEO. The company pursued growth through multiple acquisitions: securing 295 stores from Rent-Way, Inc. in 2003; entering the Canadian market with five stores in 2004; and acquiring Rainbow Rentals as well as Rent Rite that same year. The substantial $600.3 million purchase of Rent-Way in 2006 brought an additional 782 stores into the fold, increasing total locations to approximately 3,535. Due to overlapping markets following this acquisition, between 2007 and 2009, about 282 stores were either closed or merged. Expansion efforts continued internationally with the addition of 123 stores in Mexico by December 2019.

In 2006, Rent-A-Center introduced RAC Acceptance kiosks within third-party retail venues; these kiosks were rebranded as AcceptanceNOW starting January 2014.

Speese stepped down as CEO in January 2014; CFO Robert Davis took over until January 2017 when Speese returned to serve as interim CEO. In January 2018, Mitchell Fadel, formerly president of the company, succeeded Speese as CEO.

In August 2019, Rent-A-Center expanded its footprint by acquiring Merchants Preferred, a nationwide virtual lease-to-own service provider. This acquisition facilitated the launch of Preferred Lease, combining AcceptanceNOW’s staffed kiosks with Merchants Preferred’s digital platform.

On February 27, 2023, Rent-A-Center, Inc. underwent a corporate rebranding to become Upbound Group, Inc., integrating brands acquired from Acima Holdings two years earlier to fortify its market presence and support strategic growth initiatives.

Business operations

Rent-A-Center (RAC) provides both new and pre-owned brand-name furniture, appliances, computers, and electronic devices from well-known manufacturers such as Ashley Furniture, Sony, Whirlpool Corporation, Dell, and HP. Its rent-to-own approach allows customers to make low initial payments without committing to long-term contracts. Clients have the flexibility to return products at any time without fees or choose to continue renting or upgrade their items. Delivery, pick-up, maintenance, and repairs are all included in the rental cost.

In March 2007, RAC moved its corporate headquarters to a 175,000-square-foot building located at 5501 Headquarters Drive within Plano’s Legacy Business Park. This three-level facility features parking for 400 vehicles, a fitness center, a game room, and a cafeteria. In January 2020, Cawley Partners purchased the office property but leased back approximately 60% of the space to Rent-A-Center.

In July 2015, Rent-A-Center divested several Ontario stores to EasyHome for $3.4 million and entered into a three-year non-compete pact that barred both companies from opening stores in each other’s territories during that period.

Philanthropy

Rent-A-Center is committed to supporting family and youth development through ongoing charitable efforts. Since 2003, it has contributed to Big Brothers Big Sisters of America via annual fundraising events held at its stores. Between 2005 and 2010, RAC created 116 "RAC Rooms" at locations of the Boys and Girls Clubs of America, each outfitted with $5,000 worth of new merchandise. In 2014, the company enhanced its support by establishing four technology centers for Boys and Girls Clubs. Additionally, RAC awards $60,000 annually in scholarships to children of customers and employees, with total scholarships exceeding $850,000 since 2004.

The Random Acts of Caring initiative, launched in 2008, has donated merchandise and funds valued at $531,300 through 98 community-based projects. Since 2007, RAC has provided over $600,000 to Junior Achievement and its staff volunteer yearly to teach financial literacy in schools around Dallas.

Donations of cash and products to the North Texas Food Bank have approached $1.2 million since 2003. Employees have contributed more than 1,000 volunteer hours during annual food bank drives. Moreover, RAC has given upwards of $1.25 million to eleven additional food banks across the country since 2009. Its "Fill the Fridge" campaign uses over 3,000 U.S. store locations as collection points during Hunger Action Month to raise funds distributed among food banks throughout the United States and Puerto Rico.

Reception and litigation

The rent-to-own sector, including Rent-A-Center, has encountered scrutiny over consumer protection issues and allegations of predatory lending practices. Critics contend that rent-to-own agreements can lead consumers to pay two to three times retail prices. Nevertheless, a Federal Trade Commission study from 2000 revealed that 75% of participants were satisfied with their rent-to-own experience.

In 2000, Rent-A-Center resolved a sexual discrimination lawsuit by paying $47 million and agreeing to adopt policies fostering equal employment opportunities for women, including measures for board diversity and hiring practices.

In 2006, Rent-A-Center paid $7 million in restitution plus $750,000 in penalties related to deceptive business conduct in California and contributed funds toward consumer protection enforcement.

Following a 2010 lawsuit filed by the Washington Attorney General concerning unfair debt collection practices, Rent-A-Center reached a settlement agreement.

Also in 2010, the U.S. Supreme Court ruled in favor of Rent-A-Center in an employment discrimination arbitration case (Rent-A-Center vs. Jackson), affirming that arbitration agreements assigning challenges about fairness to arbitrators are enforceable.

In 2020, Rent-A-Center settled a class action lawsuit in California for $13 million regarding improper freight charges.

Other names

After a court decision concerning Wisconsin's consumer protection statutes, Rent-A-Center transitioned its Wisconsin locations into Get-It-Now! credit sale outlets, complying with legal criteria for credit sales, which encompass rent-to-own models. Additionally, the company conducts business under the Acceptance Now and Preferred Lease brands through affiliated kiosks throughout the United States. In Mexico, it operates under the RAC name, while in Minnesota, it uses the Home Choice brand due to similar rent-to-own legislation.

See also

• Closed-end leasing