The First 25 of the Last Great Independent

(left to right) Richard Wolff (CFO), co-owner Mike Jaberi, Joe Knight, vice president of business development, co-owner Allen Rezapour and co-owner Mark Mirtorabi assemble inside the Fox Rent A Car location serving Los Angeles Airport. Photo by Vincent Taroc.
(left to right) Richard Wolff (CFO), co-owner Mike Jaberi, Joe Knight, vice president of business development, co-owner Allen Rezapour and co-owner Mark Mirtorabi assemble inside the Fox Rent A Car location serving Los Angeles Airport. Photo by Vincent Taroc.

It started with six 1989 Nissan Sentras. Allen Rezapour, Mike Jaberi and Mark Mirtorabi went out and bought two Sentras each, personally guaranteed. They were already running a large and successful limo service in Los Angeles, but the hotel concierges kept asking about car rentals.

“Most of the hotels were already working with the major [car rental] brands, but the concierges would call us for a lower price,” Jaberi says. “That’s how we thought about becoming a discount brand.”

Fox Rent A Car was born.

Forward 25 years later, and the company now stands at 18 corporate-owned locations in seven U.S. states and 53 affiliate locations in 23 countries across Europe, Latin America and North America. With a corporate-owned fleet of more than 20,000 units and rental revenue of $205 million in 2013, Fox stands as the fourth-largest rental company in the U.S.

While those numbers don’t rival the majors, it shows that Fox has not only survived the continental shifts in the industry, but it has also managed to thrive as an independent and solidify its niche as a low-price alternative for the car renting public.

As the company celebrates its 25th anniversary, the three owners of the company sat down with Auto Rental News to offer a look at Fox’s path to the present, their take on the current landscape and the shape of Fox’s future.

A New Channel

Flash back to the early ‘90s. It was before the era of consolidation, and Fox was just one of many independents in Southern California trying to compete with the majors.

The company was growing, in large part due to the efforts of a marketing department that would contact travel agencies for business. But those were tough nuts to crack, because the agencies were already working with the major brands.

Jaberi remembers visiting a wholesale flower shop next to the office in 1993. The owner pulled him over to his computer monitor and showed him his “banner ad” on this new channel called the Internet. He was selling a lot of flowers this way, he said.

For Jaberi, Rezapour and Mirtorabi, it was a revelation. “We were one of the first companies to jump on the Internet bandwagon,” says Jaberi.

In hindsight, they made the right choice. But back then, it was a leap into the unknown.

“It was risky for us,” Jaberi says. “We disassembled our marketing department and discontinued our print advertising. We put all our money — as a small company — into this new channel that many people weren’t believers in.”

Jaberi recounts meetings with owners of other local car rental companies. “They used to make fun of the Internet,” he says. “They’d say you can do a lot better by investing your money to reach the travel agents.”

“When the new Yellow Pages came out and Fox wasn’t in there, everyone was wondering if something was wrong,” says Rezapour. “They had no idea we were investing that money somewhere else.”

Lessons Learned

While the Internet became the company’s catalyst for growth, Fox had to weather the coming storms along with the rest of the car rental industry. As a discount brand, however, the ripples were less pronounced. “We actually grew when the economy went bad in 2008 and after 9/11, too,” Rezapour says.

The owners learned a lesson of fleet diversification after the Daewoo collapse in 2001. This helped them during the Chrysler and General Motors bankruptcies and later during the Toyota recalls.

The company wasn’t hurt by the skyrocketing fuel prices in 2008 because the majority of the fleet was small cars.
Fox put a flag in the sand in Florida in 2011, and now counts five locations in the Sunshine State. The leisure markets in the Sun Belt states are naturals for growth, Rezapour says.

While Northeast and Midwest cities don’t make sense right now, an anomaly is Chicago O’Hare, one of the largest travel hubs in the country. Fox will be part of the new intermodal facility when it opens in 2016. In 2012, Fox hired Richard Wolff as chief financial officer. Wolff is in the process of consolidating Fox’s debt to one lender.

CONTINUED:  The First 25 of the Last Great Independent
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Comments

  1. James Davenport [ May 16, 2015 @ 10:42AM ]

    I am a State Farm Agent for 40 yrs and have rented many cars over the years for my INSUREDS in accidents. I was traveling and was coming back thru San Fran and went onto priceline and got a great price from Fox Rental. Approx. $60 a day. When I finally found the counter a very nice African American gentleman helped me and ask if I was interested in an upgrade to a 300 and I said sure as I thought complimentary as he said nothing about price. Then I see it another $40 for@ 1 day rental as I was picking up a car later in the day I had bought and would be only renting for a short period of time. The total plus tax was going to be approx $100, I said no way and he said how about if only $20 for upgrade? I said sure. That was 11am and I returned the car at 6.30 pm approx 6 hrs. And when I dropped it off and review my receipt later it was a charge of $256!!!! For 6 hrs! I feel I was Scammed and would you check this out as I wanted to look up who the owners as I knew it was Independently owned and know lots of folks in rental bus. Please review who rented to James R Davenport May 4, 2015, SFO INT. I will follow up with my receipt and dispute this with my American Express. I kept wondering how this happend, and when I thought back he said, I fixed it and lower it $20 on the charge and then turned the papers over and said initial on theback and sign. Please look into this and I would appreciate a Credit on my American Express

  2. Matthew Crane [ June 5, 2015 @ 10:11AM ]

    These guys are crooks with a masters degree is deceptive sales tactics.

  3. Matthew Crane [ June 5, 2015 @ 10:11AM ]

    These guys are crooks with a masters degree in deceptive sales tactics.

  4. Matthew Crane [ June 5, 2015 @ 10:11AM ]

    These guys are crooks with a masters degree in deceptive sales tactics.

  5. Emma Leech [ October 22, 2016 @ 07:55PM ]

    Not sure if these comments are read. If they are, I must say, I was a satisfied customer for several years. But, in September 2016, I reserved a car and prepaid online. When I picked up the car, I was charged again. I have been trying to get a refund. No help or response. Fox would rather loose a customer than to refund a little money. I guess being big now, you don't need the little people.

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