Fred Lin, CEO (left) and Rick Stevens, president, have steered Payless Car Rental through acquisitions, overseas growth, airport expansion and into a "preferred" online presence.
There are two paths in the business world: the corporate ladder or your own way. The 40-year history of Payless Car Rental is a story of entrepreneurs — from the company’s founder to its franchisees and its present-day president and CEO. These disparate groups each chose their own path to build a business but never wavered from staying focused on the cost-conscious leisure traveler.
An Entrepreneur’s Vision
Lester "Les" Netterstrom was working in sales for a book cloth company in Illinois when the offer came to take a vice president’s position at the company’s headquarters in Rhode Island. Netterstrom wasn’t keen on uprooting the family. But what he really wanted, says his widow, Zenta “Dusty” Netterstrom, was to run his own business.
And so — in one of those career- and life-defining moments — he turned down the job. Instead, “He decided to buy a Thrifty franchise,” Dusty recounts. Netterstrom didn’t know anything about the car rental business, except that he rented a lot of cars at airports while traveling for his sales job.
Netterstrom’s Thrifty territory was the car rental mecca of Idaho, and soon after so was Spokane, Wash. Along with Dusty, Netterstrom ran his franchise through the last half of the ’60s and ran it well. But Thrifty corporate wasn’t necessarily listening to all his big ideas. He had an entrepreneur’s mindset, and he needed to break out on his own. “Les had a lot of ambition,” Dusty says. “He had a vision for a lot of things.”
By the early 1970s, higher fuel prices forced Americans to consider smaller cars for the first time. But at airport rental counters, the established car rental agencies were pushing larger cars for higher rates — as Dusty puts it — to make enough money to cover their airport concession and lease fees. Netterstrom thought there was a place for a cheaper alternative that rented smaller cars off, but near, the airport.
In 1971, the first Payless Car Rental location opened in Spokane. The name fit the business model, though through the years “a lot of people thought the name was really ‘Pay Les,’ ” Dusty jokes, “especially the franchisees.”
Not long after, Netterstrom created the Payless Car Rental system and began franchising. The early days were spent marketing the new niche. “I don’t know how many feelers I sent out to get people interested in a franchise, but I contacted a lot of car dealerships,” Dusty says.
One of those dealers was a former governor of Utah. He put a rental office in his Ford dealership and called other Ford dealerships in Utah to do the same, Dusty says. “We always said the Mormons in Utah got us started,” she remembers. “Things just sort of snowballed from there.”
A Logical Combination
By 1982, Payless developed 100 locations and was solidly profitable. But the company’s coverage was primarily in the Northwest and Midwest, while another independent franchise system had been growing rapidly in other parts of North America.
Canadian-based Holiday Rent A Car started in the 1960s out of a Ford dealership in Peterborough, Ontario. The company had gotten onto airports in Canada in the late ’70s, and grew quickly to 40 franchise locations in Florida and other southeastern states.
In 1982, the Holiday system owners — the Tennant family — made an offer to buy Payless. The two companies combined their franchise systems to become Holiday-Payless Rent-A-Car. The combination provided greater national coverage, and for the most part, non-competing franchise territories. “The two franchises fit together well,” says Jim Tennant, who ran Holiday’s U.S. division for two years. Dusty concurs: “It fit together like a jigsaw puzzle.”