What Are Operating Procedures of Aaron's Franchise
Ever wondered how a franchise like Aaron's operates and what it takes to become a franchisee? Understanding the franchise model is key to your success, and we break down the essential elements to help you make an informed decision. Explore the financial commitments, operational requirements, and the support you can expect, all detailed in our comprehensive Aaron's Franchise Business Plan Template.
| # | Operating Procedure | Description |
|---|---|---|
| 1 | Training and Support | The franchise offers a comprehensive, multi-phase training program, including approximately 4 weeks of combined classroom and on-the-job instruction. Ongoing support is provided through dedicated consultants, regional meetings, and 24/7 IT assistance for proprietary systems. |
| 2 | Marketing | Aaron's supports local marketing through a national advertising fee and provides franchisees with a digital asset library for customizable campaigns. A significant portion of the national ad budget is allocated to digital channels, with franchisor guidance on local marketing plans. |
The initial investment for an Aaron's franchise can range from approximately $283,270 to $852,975, with a required cash investment between $100,000 and $240,000. Franchisees must also meet a net worth requirement of $250,000 to $500,000. The franchise fee itself falls between $15,000 and $50,000. For new units, a royalty fee of 6% and a marketing fee of 2% are standard. The model demonstrates a break-even time of approximately 12 months and an investment payback period of around 18 months.
The financial performance of Aaron's franchise units, based on the provided data, indicates an average annual revenue of $3,828,923 per unit. The cost of goods sold averages 50.2% of revenue, resulting in a gross profit margin of 49.8%. Total operating expenses represent 42.2% of revenue, leading to an EBITDA of 7.6%. Key operating expenses include personnel costs, occupancy costs, and provisions for lease merchandise write-offs and bad debt.
The number of franchised units has seen fluctuations, with 693 in 2016, decreasing to 535 by 2018. Conversely, company-owned units have increased, reaching 1,312 in 2018. This suggests a strategic shift or varying growth patterns between franchised and corporate operations over this period.
Key Takeaways
- Aaron's operates on a dual business model, primarily driven by a lease-to-own system for furniture, electronics, and appliances, supplemented by direct retail sales.
- The total initial investment for an Aaron's franchise can range significantly, from $283,270 to $852,975, with a substantial portion allocated to initial inventory and operational capital.
- Franchisees are required to have a minimum net worth of $250,000 to $500,000 and liquid assets of $100,000 to $240,000 to qualify.
- Ongoing fees include a 6% royalty on gross revenues and a 2% contribution to the national advertising fund, in addition to an initial franchise fee of $15,000 to $50,000 per store.
- The average annual revenue per unit is reported to be $4,774, with the median at $196,210, and the top-performing stores can exceed $21 million in annual gross revenue.
- The business model is designed to serve credit-constrained customers, providing a relatively stable demand stream regardless of economic fluctuations.
- Prospective franchisees should possess strong business acumen and management experience, with a commitment to following the established operational system and a capacity for strong community involvement.
What Is the Aaron's Business Model?
The Aaron's business model centers on a lease-to-own system, offering customers the chance to lease furniture, electronics, and appliances with the ultimate goal of ownership. This approach is complemented by traditional retail sales, allowing it to cater to a broader customer base.
How does an Aaron's franchise generate revenue?
- The core of the Aaron's business model is a lease-to-own system, where customers lease furniture, electronics, and appliances with the option to gain ownership over time, supplemented by traditional retail sales. This dual approach captures a wide consumer base.
- As of late 2024, approximately 75-85% of revenue for a typical store is generated from lease and rental agreement payments. The remaining 15-25% comes from direct retail sales, fees, and other income streams. The average annual gross revenue for the top quartile of franchised stores exceeded $2.1 million in 2023.
- This Aaron's rent to own franchise model primarily serves credit-constrained customers, a market segment that remains robust regardless of economic cycles, providing a consistent demand for its services and products.
Is Aaron's a good franchise to buy?
- Evaluating if Aaron's is a good franchise to buy depends on the investor's capital and operational capabilities; it is a well-established brand with a proven system in the durable goods and lease-to-own industry.
- The brand boasts over 300 franchised locations as of early 2025, with many multi-unit owners, which can be an indicator of franchisee satisfaction and profitability. While specific Aaron's franchise profit margins are not disclosed publicly, the business model is designed for high-volume transactions and long-term customer relationships.
- Aaron's franchise success stories often highlight the strong brand recognition and corporate support, which are significant advantages. The company holds a substantial market share, estimated at over 15% of the US rent-to-own market as of year-end 2024.
For a deeper understanding of the operational aspects and potential challenges, consider exploring What are the Pros and Cons of Owning an Aaron's Franchise?
Key Considerations for Potential Franchisees
- Startup Capital: The initial investment can range significantly, from approximately $283,270 to over $852,975, with required cash ranging from $100,000 to $240,000.
- Ongoing Fees: Be prepared for ongoing royalty fees of 6% and a marketing fee of 2% of gross revenue.
- Market Position: The business operates within a niche serving credit-constrained customers, which can offer stability but also requires a specific sales and service approach.
The average annual revenue per unit reported in the Franchise Disclosure Document (FDD) can vary greatly, with figures ranging from $30,000 to $80,000, and the highest reported at $4.77 million in some instances. However, it's crucial to note that the median annual revenue per unit was reported at $196,210. The average P&L data suggests an average annual revenue of $3,828,923 with a gross profit margin of approximately 49.8%, leading to an EBITDA of $289,608, or about 7.6% of revenue.
How Much Does an Aaron's Franchise Cost?
When considering an Aaron's franchise opportunity, understanding the total financial commitment is paramount. The Aaron's franchise cost involves several components, from the initial franchise fee to the ongoing operational expenses. It's a significant investment, typical of businesses requiring a physical retail presence and substantial inventory.
What is the total initial investment?
- The total initial investment to open an Aaron's franchise is substantial, reflecting the need for a retail location, extensive inventory, and operational capital.
- Based on the 2024 Franchise Disclosure Document (FDD), the estimated Aaron's franchise investment details range from $300,700 to $851,500. This includes the franchise fee, leasehold improvements, initial inventory (which can be $150,000 to $350,000), and three months of working capital.
- Prospective franchisees need significant liquidity. The required Aaron's franchise startup capital needed is a minimum of $450,000 in liquid assets to ensure the business can manage initial inventory costs and operational expenses before reaching profitability.
What are the fees for Aaron's franchise?
- Franchisees are required to pay an initial franchise fee and ongoing royalties and fees to the franchisor. Understanding what are the fees for Aaron's franchise is critical for financial planning.
- The initial Aaron's franchise cost includes a franchise fee that can range from $15,000 to $50,000 per store. The exact amount can vary based on the development agreement and the number of units being opened.
- Ongoing fees include a 6% royalty on gross revenues and a 2% contribution to the national advertising fund. These fees, outlined in the franchise agreement, support brand marketing and ongoing corporate services.
Key Financial Considerations for an Aaron's Franchise
- Initial Investment Range: Be prepared for an investment between $300,700 and $851,500.
- Liquid Asset Requirement: Ensure you have at least $450,000 in liquid assets.
- Royalty Fees: Factor in a recurring 6% royalty on your gross revenue.
- Advertising Contribution: Allocate an additional 2% for national advertising efforts.
For a detailed breakdown of the process and what's involved in becoming a franchisee, you can explore How to Start an Aaron's Franchise in 7 Steps: Checklist.
What Are The Aaron's Franchise Requirements?
What are the financial qualifications?
- Embarking on an Aaron's franchise journey requires substantial financial preparedness. As of the latest data, prospective franchisees must demonstrate a minimum net worth of $1,000,000. This figure is crucial for ensuring financial stability and the capacity to manage the investment.
- Beyond net worth, a significant requirement is having at least $450,000 in liquid capital. This liquid capital is essential for covering the initial investment, which includes a substantial inventory purchase, and ensuring the business has adequate operating funds from the outset.
- The initial investment for an Aaron's franchise can range from $283,270 to $852,975. This broad range accounts for various factors, including location, size, and initial inventory. The franchise fee itself typically falls between $15,000 and $50,000.
What experience is needed to qualify?
- While direct experience in the rent-to-own industry or retail management is beneficial, it's not always a strict prerequisite for an Aaron's franchising opportunity. The franchisor places a high value on strong business acumen and proven management skills.
- Candidates are expected to have experience in operations management, including leading a team, and a solid understanding of financial performance. Skills in sales, marketing, and customer service are also highly regarded, as they are critical to the success of the Aaron's business model.
- The ideal candidate for an Aaron's franchise opportunity shows a commitment to community engagement and the ability to diligently follow the established operating system. Experience with multi-unit operations is a distinct advantage, as the brand often looks to expand with existing successful franchisees. For a deeper dive into potential earnings, you can explore How Much Does an Aaron's Franchise Owner Make?
Key Considerations for Franchisees
- Financial Readiness: Ensure you meet the net worth and liquid capital requirements before starting the application process.
- Operational Skills: Highlight your experience in management, sales, and customer service to demonstrate your capability.
- System Adherence: Be prepared to follow the franchisor's established business model and operational guidelines.
Operating Procedure to Aaron's Franchise Unit: The Application
How to start an Aaron's franchise application?
Embarking on the journey to own an Aaron's franchise begins with a structured application process. The initial step involves submitting an inquiry form through their official franchising website. Following this, the dedicated franchise development team conducts a preliminary review to assess your qualifications.
Once you've cleared this initial hurdle, you'll be provided with the Franchise Disclosure Document (FDD). As of 2025, this comprehensive document often exceeds 400 pages and offers a deep dive into the specifics of the Aaron's franchise agreement, detailing all investment costs and essential company financials. This is where you can find critical information, such as the How Much Does an Aaron's Franchise Cost?
The culmination of the application process involves a series of in-depth interviews, thorough financial verification, and an invitation to a 'Discovery Day' at Aaron's support center located in Atlanta, Georgia. The entire approval timeline typically ranges from 60 to 120 days from the moment you submit your initial application.
Where is Aaron's franchise territory availability?
The availability of Aaron's franchise territories is carefully managed, with a strategic focus on markets that align with the business model's demographic and economic requirements. This ensures a strong foundation for new franchisees.
As of June 2025, opportunities for new Aaron's franchise units are concentrated in specific regions across the United States, with a notable presence in the Midwest and West Coast. Their franchise development map provides detailed information on available states and metropolitan statistical areas (MSAs).
Each Aaron's franchise is granted an exclusive territory, generally defined by a radius of 3 to 5 miles or a population base of approximately 50,000 to 75,000 people. This exclusivity guarantees that no other Aaron's store will operate within your designated zone, safeguarding your market share.
Key Application & Territory Insights
- Initial Inquiry: The first formal step in the Aaron's franchise application process.
- FDD Review: Essential for understanding the full scope of the Aaron's franchise agreement, investment details, and financial obligations.
- Discovery Day: A crucial opportunity to engage directly with the Aaron's support team.
- Territory Exclusivity: Typically defined by a radius or population count to protect your market.
| Initial Investment Range | $283,270 - $852,975 |
| Franchise Fee | $15,000 - $50,000 |
| Royalty Fee | 6% of revenue |
| Marketing Fee | 2% of revenue |
| Cash Required | $100,000 - $240,000 |
| Net Worth Requirement | $250,000 - $500,000 |
| Franchised Units (2018) | 535 |
| Corporate Units (2018) | 1,312 |
| Average Annual Revenue per Unit | $3,828,923 |
| Gross Profit Margin | 49.8% |
| Breakeven Time | 12 Months |
| Investment Payback | 18 Months |
Operating Procedure To Aaron's Franchise Unit: Legal And Financial
What is the Aaron's franchise legal structure?
When considering an Aaron's franchise opportunity, understanding the legal framework is crucial. The standard requirement for operating an Aaron's franchise is to establish a formal business entity. This means you'll need to set up your business as a corporation, an LLC, or another recognized legal entity, ensuring it's properly registered and in good standing within the state where your franchise will operate. Operating as a sole proprietorship is generally not permitted under the franchise agreement.
This stipulation is in place to offer protection for both you, the franchisee, and the franchisor, by clearly defining liability. The franchise agreement itself is entered into by your business entity, not by you as an individual. These agreements typically have a term of 10 years, with options to renew, providing a long-term framework for your investment.
As part of the application process for an Aaron's franchising, you will be required to submit all formation and ownership documents for your chosen business entity. This step is vital for maintaining transparency and ensuring compliance with all the terms and conditions outlined in the Franchise Disclosure Document (FDD). It's a fundamental part of the due diligence for both parties involved in the Aaron's business model.
How are Aaron's franchise average earnings?
To get a clear picture of potential Aaron's franchise average earnings, it's essential to consult Item 19 of the FDD. This section provides detailed historical financial performance data from existing franchised locations. For instance, the 2024 FDD indicates that franchised stores operating for at least a full year in 2023 generated an average annual gross revenue of $1,754,992. For those locations performing at the top tier, the average gross revenue reached $2,189,550, representing the top 25% of stores.
While net income figures are not directly provided, the gross margin on lease and retail revenues, before accounting for operating expenses, typically falls within the range of 55% to 65%. Profitability is significantly influenced by various factors, including the chosen location, the effectiveness of your management team, and your ability to control operational costs effectively. Understanding these financial metrics is key to assessing the viability of an Aaron's franchise.
The initial investment for an Aaron's franchise can range from $283,270 to $852,975. This range encompasses various costs, including the initial franchise fee, which can be between $15,000 and $50,000. Additionally, franchisees are expected to have between $100,000 and $240,000 in liquid cash available and a net worth requirement of $250,000 to $500,000. For a deeper dive into these figures, you can explore How Much Does an Aaron's Franchise Cost?
Key Financial Benchmarks for an Aaron's Franchise
- Average Annual Revenue: The FDD data shows significant revenue potential, with the average unit bringing in approximately $3.8 million.
- Gross Profit Margin: A healthy gross profit margin of around 49.8% is reported, indicating strong profitability on leased and retail revenues before operating expenses.
- EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stands at about 7.6% of revenue, demonstrating operational efficiency.
| Financial Metric | Amount ($) | Percentage of Revenue (%) |
|---|---|---|
| Average Annual Revenue | 3,828,923 | 100% |
| Gross Profit Margin | 1,907,020 | 49.8% |
| EBITDA | 289,608 | 7.6% |
| Expense Type | Annual Amount ($) |
|---|---|
| Personnel Costs | 664,412 |
| Occupancy Costs | 223,304 |
| Bad Debt Expense | 227,960 |
Operating Procedure To Aaron'S Franchise Unit: Store Setup
What does the real estate process involve?
Securing the right location is a critical first step in launching your How to Start an Aaron's Franchise in 7 Steps: Checklist. The real estate process for an Aaron's franchise requires finding a suitable retail space, typically between 7,000 and 10,000 square feet. This size accommodates both a showroom for merchandise and essential warehouse storage, along with office areas. High visibility and convenient access for deliveries are key considerations.
While Aaron's corporate real estate team offers guidance and site selection assistance, including demographic analysis, the franchisee ultimately bears the responsibility for securing the lease. The condition of the chosen site will influence leasehold improvement costs, which can range significantly from $10,000 to $200,000.
| Typical Store Size | 7,000 - 10,000 sq ft |
| Leasehold Improvement Range | $10,000 - $200,000 |
How is initial inventory sourced?
The initial inventory for your Aaron's rent to own franchise is carefully curated through Aaron's established proprietary supply chain and a network of approved third-party vendors. This ensures that all merchandise meets brand standards and quality expectations. The estimated cost for this comprehensive initial inventory package typically falls between $150,000 and $350,000. This includes a diverse selection of furniture, appliances, and electronics, strategically chosen based on market data and anticipated seasonal demand.
To manage this inventory effectively, franchisees will utilize Aaron's proprietary software. This system is designed to optimize stock levels, meticulously track all lease agreements, and oversee the entire product lifecycle, from initial acquisition through to the final sale or return of an item.
Inventory Management Tips
- Regularly review inventory turnover rates to identify slow-moving items.
- Utilize the proprietary software for real-time stock updates and demand forecasting.
- Build strong relationships with approved vendors to ensure timely replenishment.
| Initial Inventory Cost Estimate | $150,000 - $350,000 |
| Franchise Fee Range | $15,000 - $50,000 |
| Royalty Fee | 6% of revenue |
| Marketing Fee | 2% of revenue |
Operating Procedure To Aaron'S Franchise Unit: Training And Support
What is Aaron's franchise training and support?
When you embark on an Aaron's franchise opportunity, you're not stepping into it alone. The franchise provides a robust, multi-phase training and support system designed to equip you for every facet of running the business. This commitment to franchisee success is a cornerstone of the Aaron's business model.
- The initial training program is comprehensive, spanning approximately 4 weeks. This includes 5 days of focused classroom instruction at their corporate headquarters in Atlanta, Georgia.
- Following the classroom phase, you'll dive into 3 weeks of hands-on, practical training at a certified training store. This real-world experience is crucial for understanding daily operations.
- Post-launch, ongoing support is a key benefit. You'll have a dedicated Franchise Business Consultant to guide you, along with access to regional meetings and national conventions. Plus, there's 24/7 IT support for their proprietary point-of-sale and inventory management systems, ensuring your technology runs smoothly.
What are the Aaron's franchise owner benefits?
Choosing to join the Aaron's franchising network offers several distinct advantages that contribute to its appeal as a franchise. These benefits are rooted in brand recognition, operational efficiency, and a supportive franchisee community.
- One of the most significant benefits of an Aaron's franchise is the opportunity to operate under a nationally recognized brand with a history spanning over 60 years. This established presence can significantly ease market entry.
- Franchisees benefit from the company's substantial purchasing power. This allows access to products from leading brands, such as Samsung, GE, and Ashley Furniture, at competitive prices, which helps protect profit margins. For instance, the average annual revenue per unit was $3,828,923 according to the P&L data, with COGS at 50.2%.
- Additionally, the Aaron's franchise model includes a well-funded marketing program, supported by a 2% advertising fee. You also gain access to a proprietary technology platform for efficient store management. Furthermore, the network of over 100 fellow franchisees provides a valuable resource for peer support and sharing best practices. For those curious about the financial commitment, you can explore the details in How Much Does an Aaron's Franchise Cost?
Understanding the investment details is critical for aspiring franchisees. The initial investment for an Aaron's franchise can range from $283,270 to $852,975. This includes a franchise fee that can vary between $15,000 and $50,000. The required cash on hand falls between $100,000 and $240,000, with a net worth requirement of $250,000 to $500,000.
Tips for Leveraging Aaron's Training and Support
- Actively participate in all aspects of the initial training, asking questions and seeking clarification on any unfamiliar processes.
- Regularly engage with your dedicated Franchise Business Consultant; they are a valuable resource for navigating operational challenges and identifying growth opportunities.
- Network with other franchisees through regional meetings and national conventions to exchange insights and learn from their experiences.
| Initial Investment Range | $283,270 - $852,975 |
|---|---|
| Franchise Fee Range | $15,000 - $50,000 |
| Required Cash | $100,000 - $240,000 |
| Net Worth Requirement | $250,000 - $500,000 |
|---|---|
| Royalty Fee | 6% |
| Marketing Fee | 2% |
Operating Procedure To Aaron'S Franchise Unit: Marketing
Understanding the marketing support structure is crucial for any franchisee looking to maximize their success with an Aaron's franchise. The franchisor offers a dual approach, combining national brand strength with localized execution capabilities.
How does Aaron's support local marketing?
- The national brand advertising, funded in part by a 2% national advertising fee, provides a broad reach. This national presence is complemented by specific tools designed for local market execution.
- Franchisees benefit from a comprehensive digital asset library. This includes professionally developed, customizable marketing materials suitable for print, digital, and social media campaigns. For 2025, a significant focus is on digital channels, with over 50% of the national ad budget allocated here.
- Dedicated Franchise Business Consultants work with owners to create an annual local marketing plan and budget. A common recommendation is to invest an additional 1-2% of gross revenues in local initiatives to drive foot traffic and customer engagement.
What marketing programs are provided?
- The marketing programs within the Aaron's franchise system are multi-faceted. They encompass national television commercials, targeted digital advertising, search engine marketing (SEM), and active social media campaigns.
- A key asset is the robust e-commerce platform, Aarons.com, which serves as a significant lead generator and facilitates online orders that are then fulfilled by the local store. In 2024, web-generated leases and sales represented approximately 15-20% of total revenue for many locations, highlighting the importance of this digital channel.
- Franchisees also gain access to an advanced Customer Relationship Management (CRM) system. This tool is essential for managing customer data, tracking lease agreements, and executing targeted marketing efforts via email and text messages to both existing and past customers.
For those considering franchise opportunities, exploring What Are Some Alternatives to Aaron's Franchise? can provide valuable context for the broader market landscape and potential investment strategies.
Marketing Tips for Franchisees
- Leverage the provided digital asset library to maintain brand consistency while tailoring messages to your specific local market.
- Actively engage with your Franchise Business Consultant to refine your annual local marketing plan and budget, ensuring optimal allocation of resources.
- Prioritize digital marketing efforts, as data indicates a strong and growing contribution from online channels to overall revenue.
| Initial Investment Range | $283,270 - $852,975 |
| Franchise Fee | $15,000 - $50,000 |
| Royalty Fee | 6% |
| Marketing Fee | 2% |
| Average Annual Revenue per Unit | $3,828,923 |
| Gross Profit Margin | 49.8% |
| EBITDA Margin | 7.6% |
The Aaron's franchise model benefits from a strong emphasis on digital marketing, with over 50% of the national ad budget allocated to online channels as of 2025. This digital-first approach is supported by a powerful e-commerce platform that drives significant business to local stores. In 2024, web-generated leases and sales accounted for 15-20% of total revenue for many locations, underscoring the importance of online presence and lead generation within the Aaron's business model.