Ron Berger is an entrepreneur and franchising industry leader. He has served as chairman and chief executive officer of Figaro’s since June 1, 2001, when he, his wife (Carol), and Mr. Bill LeVine acquired Figaro’s. From August 1989 to September 2000, Berger served as chairman and chief executive officer of Rentrak Corporation, a publicly-traded (NASDAQ: RENT) information and payment processor in the home video industry.
Berger conceived of the Rentrak concept: a method of sharing revenues between video rental shops and the Hollywood motion picture studios and other program suppliers. Under his leadership, the business grew from $6 million (1989) to $113 million (2000). During his last four years as CEO, Rentrak earned over $16 million in net income on revenues of $476 million.
While at Rentrak, Berger presided over the acquisition, management, and subsequent sale of The Pro Image, the nation’s largest chain of licensed sports apparel retail stores with 240 units and system-wide revenues of $80 million. Rentrak also developed several chains of retail video and game shops. One operated within Wal-Mart shopping centers, Kmart, Fred Meyer, Ralph’s, and other mass merchants. Under Berger’s management, the business (Blow Out Entertainment) grew to over 200 stores and was spun off as a separate, public company in a dividend to Rentrak shareholders. The other was focused on outlet malls, with its flagship store generating $3 million in annual revenues.
Prior to building Rentrak, Berger conceived of, founded and served as chairman and CEO of National Video, Inc. from September 1980 to September 1988, when the business was sold. The business, which started with a single store in Beaverton, Oregon in February 1981, grew to 746 stores in all 50 states and all 10 Canadian provinces. It became the largest chain of specialty retail video stores in the world in 1986, and held that number one spot until passed by Blockbuster in 1992, four years after Berger sold the business. In 1986, Berger took National Video public in a $5 million financing. The company completed a $21 million secondary offering, several years later.
Berger has served as a member of the board of directors of the International Franchise Association (IFA) on three occasions, once as CEO of National Video, as CEO of Pro Image, and as CEO of Figaro’s from 2004 to 2010. In 1985, National Video won the most prestigious award the IFA bestows for excellence in franchise relations, competing against industry leaders including Subway and Marriott Hotels. Today, Berger serves on the IFA Diversity Institute Board of Directors and as a member of the IFA VetFran Committee. While chairman of Rentrak, Berger was nominated to serve as a member of the board of directors of the Video Software Dealers Association (VSDA) board the maximum three times for six years of service. He served as chairman of the VSDA Scholarship Committee and the VSDA Revenue Enhancement Special Committee.
With actor Jeff Bridges, Berger was one of the founding directors of the video industry’s charity organization, “Fast Forward to End Hunger”. He has also served as a member of the board of trustees of The Nature Conservancy of Oregon, as a member of the board of directors of American Contractor’s Indemnity Corporation (ACIC), a leading insurance company focused on surety, and as a member of the board of directors of the publicly-traded National Lampoon. At Figaro’s, Berger led the creation of H.E.L.P., the charity, in 2009, and serves on its board. Today, he also serves as president of the Desert Tortoise Preserve Committee, and chairman of the board of a charity called The Desert Tortoise Conservancy.
Tell me about your early career.
After several stints as an executive at a number of businesses, including serving as director of purchasing and then as a business unit manager at a New York Stock Exchange-listed firm before the age of 21, I started a camera store chain which grew to become one of the largest in the nation. However, as interest rates hit 21%, the business went bankrupt and, as a guarantor of much of its debt, I personally went bankrupt.
How did the concept for Rentrak come about?
In the 1980s, the video cassette rental business was experiencing explosive growth. However, the motion picture studios artificially inflated the wholesale cassette prices because they felt they couldn’t share in the retail rental revenues being captured by video stores. I developed a solution, in which studios leased cassettes to Rentrak, and Rentrak in turn leased them to the retailers. Experts, years later, estimated that our system helped grow the industry by as much as 20%, or $2 billion annually. Over the course of its first ten years, Rentrak grew to over $100 million in domestic revenues. A licensee called Rentrak Japan grew to over $250 million in revenues as well. By the year 2000, Rentrak’s eleventh year, it was tracking for its studio partners all video rental revenues generated at over 10,000 locations including all of the industry leaders, like Blockbuster and Hollywood Entertainment.
How was the first year in business?
We lost a fortune. Survival required obtaining millions in additional capital.
What was your marketing strategy?
We showed retailers that their business would grow if they carried greater copy depth on the hits and a wider selection of titles, and leasing cassettes facilitated that.
How did you come across the opportunity to buy Figaro’s?
I had retired in 2000 and was happily playing lots of golf, when I realized the game was boring me and that I really needed to get myself involved in a business. As a lover of franchising as an institution and business model, I began searching online for franchise opportunities and settled on Figaro’s as having an appealing business model.
What were some of the challenges you initially faced with building the business?
There have been numerous challenges. We were faced with a 1980s retail model and design, so we updated it. However, upgrading and/or relocating long-time, entrenched franchisees can be problematic, and Figaro’s has struggled to take full advantage of the opportunities available. There had been only print marketing, primarily direct mail. We introduced radio, television, and social media marketing. The franchises were limited to Oregon and Washington. We expanded nationally, as well as to Dubai, Abu Dhabi, Cyprus and Mexico. We introduced low-carb, gluten free, thin crust, and New York-style pizzas. We added home delivery. These are only a few of the innovations we implemented.
How do you define success?
What is the key to success?
Persistence. I think all other “keys” pale by comparison. Entrepreneurs are often innovating concepts everyone around them consider to have little to no chance. Without persistence, most would fail.
What is the greatest lesson you’ve ever learned?
When everyone around you raves about a direction you intend to take, rethink it. It will likely fail.
What is your favorite book?
Team of Rivals by Doris Kearns Goodwin.
When faced with adversity, what pushes you to keep moving forward?
Persistence, not giving up (sometimes even when you should), and PASSION for the project.
What advice would you give to young entrepreneurs?
There is nothing so sweet as taking an idea from concept in your mind to an operating, profitable, successful business. You’ll encounter seemingly-endless opposition, hurdles, naysayers, but if you overcome them all, it will all have been worthwhile.
This interview was conducted for research purposes by author Jason Navallo for his upcoming book, Underdog.
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