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| Bates’ Big Business |
| RV Business, July 2003 |
| International RV Rental Franchisor Evolved From ‘70s Gasoline Crunch By Bob Ashley Sandra Bate, president of Bates International Motor Home Rental Systems, Inc. in Las Vegas, Nevada, says she got into the RV rental business strictly by chance. She bought a motor home in the early 1970s, only to find that it sat idle too much of the time. “That was back during the gas crunch, and it was difficult to sell,” Bate recalled. “I was living in California and put an ad in the L.A. Times to rent it, and I got so many phone calls that I thought it would be nice if I had more motor homes to rent. Within six months, we started taking consignment units and we had 60 motor homes. The result was the Motor Home Rental Network – founded by Bate in 1973, which in 1997 became Bates International with franchise locations in the United States and Canada, primarily west of the Rocky Mountains. About 50% of motor homes in Bates’ franchise fleet, depending on the time of the year, are owned by investors, who, as part of a lease-back arrangement receive half the rental income and realize a tax savings on their motor homes. Bates rents Class C and Class A Gulf Stream, Forest River, Fleetwood and Coachmen motor home brands and employs a staff of six in the international franchise headquarters and eight at the Las Vegas rental facility. RVB: You ran a successful RV rental business for more than 20 years. Why did you decide to franchise your business? Bate: When we moved to Las Vegas, we started renting in other citifies through a toll-free number. It was difficult to rent motor homes in Oregon with a home office in Las Vegas. It was better to have people renting the units who were local. We have several different programs. Some of the motor homes are owned by the franchisees. Most of the locations take consignments and have investors who purchase the motor homes that they rent. RVB: Characterize your franchisees. Bate: It’s a mixed group. We have some people who have RV parks with golf courses, and then we have some who are RV dealers with sales and service departments. Others are leaving corporate American and starting their own business. The franchise fee depends on the location. RVB: Who are the lease-back clients who purchase half the motor homes that you rent? Bate: They are looking for investments for tax shelters – doctors and attorneys and other professionals who have had trouble with the stock market and want to put their money in hard assets like motor homes. RVB: Do you sell RVs? Bate: WE sell RVs only through our RV rental program. We work with manufacturers so we can get RVs for below retail price as long as they end up in the fleet for a minimum of a year. We usually keep those units for a year to 18 months and then sell them retail while they still have low mileage. We take the proceeds and buy another unit. We really don’t want them to go 30,000 miles because they are much easier to sell. RVB: Has the rental market undergone any changes recently? Bate: The majority of rentals are Class C motor homes, but more and more people want to travel in the big luxury units. That is different than in the past. And we are getting more Americans. Before 9/11, people from foreign countries were our biggest market – probably 55% of our business during certain times of the year. Now it’s about 25%. RVB: Do you have a service department? Bate: We have a service area, but we just do the light service ourselves. We take them to an RV dealer for heavy duty servicing. RVB: How do you decide whether a customer is qualified to rent an RV? Bate: We give them a test ride. On the application, we find out if they have every rented before. If they haven’t, we send them a safety tape, and then we take them on a test ride for 45 minutes to two hours when they get here, depending on the person. RVB: Do you turn people away? Bate: Yes we do - if they have a problem with their insurance or their license. Occasionally we’ve not been able to let people go out because they couldn’t drive the unit. That’s rare, though. Most of our customers are families, and they are concerned about safety, so they know what they can handle. We also do a lot of work for production companies for movies, television and sporting events that hire professional drivers. |
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