Table of contents
The Square Developer podcast explores the intersection of technology and innovation in the world of payments and beyond. Your host and Square Head of Developer Relations Richard Moot sits down with a series of guests this season, walking you through the latest news, updates, and innovations in the Square developer ecosystem.
On today’s episode we are joined by Rhea Lana Founder and CEO Rhea Lana Riner, as well as Rhea Lana Chief Financial Officer and Franchise Owner Erin Franklin. We explore the journey from an idea to help families find high-quality children’s clothing on a budget to the nationwide franchise it is today. We also dive into the technological innovations and partnerships that have supported this growth, streamlined operations, and enhanced the shopping experience for customers.
Guests
- Richard Moot, Square head of developer relations
- Rhea Lana Riner, Rhea Lana founder and CEO
- Erin Franklin, Rhea Lana Chief Financial Officer and franchise owner
About Rhea Lana
Rhea Lana is an upscale consignment event that offers families around the country a chance to earn a paycheck off of outgrown children’s items and to purchase high-quality pieces at budget-friendly prices. Each franchise hosts two events per year – one for the spring and summer and one for fall and winter. Some franchises even host additional holiday sales!
Full transcript
Richard Moot: Hello and welcome to the Square Developer Podcast. I’m your host, Richard Moot, and today I’m joined by Rhea Lana. I want to thank you all for being here today. I really, really appreciate you taking the time. If you wouldn’t mind going ahead and giving quick little intros to tell us who you all are.
Rhea Lana: Hi, Richard. I’m Rhea Lana, and I’m the founder and also the current CEO.
Erin Franklin: I am Erin Franklin. I am the CFO for Rhea Lana’s, and I am also a franchise owner.
Richard Moot: Well, thank you so much. Rhea Lana, would you be so kind, tell us the story about what is Rhea Lana. Give us the story of how this all started and bring us if possible to where we are today.
Rhea Lana: Sure. Well, we host children’s consignment events. And so families bring their gently used children’s things, and we sell them for them. It started when I was a stay-at-home mom actually in the early nineties. We had made a move from the corporate world, and Dave was doing nonprofit work. And so I was a stay-at-home mom on a really tight budget. I loved cute kid’s clothes, but it was just hard to find good deals in a really high-quality atmosphere. So the goal then, Richard, was not to build a business. I really was just doing this little thing for my friends. And so I invited moms too and we did our first sale in my little living room. We moved the furniture out of the living room into our bedroom, and we had three racks of clothes and 11 consignors. A consignor is a mom who is selling her kids things. And so that was our very first sale in 1997. That’s how it started.
Richard Moot: After the starting of that, what made you want to turn this into a full-blown business?
Rhea Lana: Well, after that very first sale, Dave [my husband] actually is the one that said, “Rhea Lana, we should computerize this.” Well, back in the early nineties, stay-at-home moms didn’t have computers in there. I didn’t even know a mom who had a computer in their house, but we did. We computerized it, and we said we had barcodes. And the interesting thing is that families just kept asking me to do it again and again and again. And so the model is just two times a year. And so for those first several years, we would have these little sales in my house, and they would take over another room of the house and my daughter’s room and the kitchen and the garage. And then finally we moved out of our house and we began to hold these events in locations around our little town in central Arkansas. And then we had families that were driving in from Little Rock, Arkansas, which is about an hour away. And I began to realize families love this. They appreciate it. It’s helping them not only be able to buy high-quality clothes, but sell things their families didn’t need anymore. And it gradually was making a profit more and more. And so we began to realize, “Oh, this is something that could be a business.”
Richard Moot: That’s awesome. And so where are we today with the size of Rhea Lana?
Rhea Lana: Well, in, let’s see, it was about 2008, I think. That’s right. We decided we would franchise, and we still were on a very limited budget. And so we knew that if we tried, it didn’t have much to lose. We couldn’t risk a lot is what I was going to say. We didn’t have the money to hire some big, fancy firm to help us, some consulting agency. We just thought, “Well, we’ll just franchise it.” I actually read the book “Franchising for Dummies.” That’s not a joke. I did. And while my kids were swimming at the pool, I would check the things off and do the things. And thankfully I had a friend who was a really smart tax attorney, and so he helped me put our contracts together. And then we just decided to see if anybody would buy a franchise. And so that’s how we started our franchising company. And so today we have about 120 locations in about 26 states across the country, and we’ve served now millions of families. And our heart is we love serving families, and we love just adding value to lives to families across the country.
Richard Moot: Wow, that’s awesome. And so to hopefully give also how this all works — so you have 120 franchisees or franchises all throughout the United States, and this is an event-based thing, right? There’s two annual events. Tell me a little bit about how these events get set up and how big are they?
Rhea Lana: Well, I’ll start and then I’ll let Erin share, because she owns one of our early franchises. And I still own and operate our franchise in central Arkansas. But you’re right, the model is that we hold semi-annual events. So we just do em twice a year. And when the franchisees start, they’re like a baby, but they grow into these huge sales. And so we will fill up large, like, a Walmart or larger, and we will have several thousand families bring their things. But we just set it up. We take items in for about a week, and then we sell items for about a week. And so it’s kind of a pop-up event, but it is all just run at such a high-quality of excellence, because we do have incredible technology.
From our very first event, I always had a desire that we would guarantee items just from experiences I’d had and consignment stores and other things. I just felt like we needed to track where every item went. And so even in the very first sales in my home, we would hand our consignors a computerized report that told them exactly what sold and for how much. We wanted them to be able to trust us. But Erin, again, was one of our early franchises. Erin, you should share about your event.
Erin Franklin: Yeah, I’m in the Kansas City market, and so we didn’t have Rhea Lana’s until 2010. That’s when I bought. There was another franchise kind of next to us that bought about the same time. And so we had competitors in the Kansas City market, but Rhea Lana’s was just so different. We set it up more like a boutique store, rather than these long rows of clothes. It was set up pretty and colorful, and we decorated. And you just kind of made it feel like a store. And, just, I don’t know. It really set us apart in the market, in our territory. So you do, you start out small. So you see now these pictures of even my event today — but really Rhea Lana’s event in central Arkansas — you see these pictures of this massive space and all these items. But really in the beginning you start out and you have your little seven or eight racks, and it just grows because these families.
In the beginning I might’ve had 50 families that consign with me. I have well over a thousand now. And so just these families see the value in selling these items that are in great shape, but their kids no longer use. And so really the model itself is just such a benefit to the community and to the shoppers. We will have thousands and thousands of shoppers come through the door in the matter of one week. And so what brick-and-mortar stores tend to see in months we see in a week. And so just really the event aspect of it is really just so beneficial for the community. And so doing it twice a year, you get that spring-summer event. And so you get all the swimsuits and all the tank tops, and then you do more. I do more of a back-to-school fall event. And so then you can get that colder weather, warmer attire kind of aspect. So yeah.
Richard Moot: It’s very interesting to sort of hear how it initially starts out. As you would expect with most businesses, whether it’s a franchise or not, is that it’s going to start out a little bit smaller, and then it grows from there. So one thing I just imagine is it’s very important to be able to to grow as you’re growing — that you’re able to scale with that growth. So I imagine that you might start off with only a few point of sales, and then as you’re having thousands of people coming through, you’re like, “Oh my gosh, now we need to have so many of them.” Tell me a little bit about how it is when these events get really, really big. I mean, you were sort of giving this visual of filling up an entire Walmart almost. What does that look like on the event day?
Erin Franklin: Yeah, for my event, I am now in an old Marshalls and Home Goods space. So it’s about 55,000 square feet, and we max it out. We use every square inch. And so we went, our first event, we had one computer, one point of sale, and now we run 15-plus point of sales and Square Terminals and all the things. But it is just massively full. And Rhea Lana — I’ll let her speak — but, I mean, her event has gotten to the size where she’s outgrown the entire expo center in her town and uses the whole outside. And so you can speak more to that.
Rhea Lana: We do actually. We have, we’ve moved outside. It is, it’s kind of a covered area, but I have a really amazing team, and we serve whether it rains or shines or snows. So that’s what we do. But we also have many point of sales, like Erin said. I think, I don’t know, we have about 20 now. Our goal is to give an excellent shopping experience. We don’t want people to stand in line for a long time. And so we just are always thinking through what’s the experience of the consignor, the families that are selling their things, and then what’s the experience of the shopper. And we want it to be visually beautiful like a department store, but we want to make it easy to shop. So families have shopping carts to put all their things in, and we have this special, big-ticket item pickup, because not only do we sell clothes, but we sell big toys and baby gear and furniture.
And so we just have this system where they can just have a little claim ticket, and they pull around the back and we’ve got these strong men that load the things up. So again, it really is all because we have a wonderful technology that we’ve been able to operate at such excellence. And we’re always trying to improve that. And we really have enjoyed our partnership with Square. It’s made our checkout process go even faster. We’ve gained even more respect from our customers, and so it’s just really helped us continue to, just in one more area, go to the next level.
Rhea Lana: I’ve tended to want things to be done excellently, but I didn’t know really how to do it, except that first sale. I was counting little string tags, and I would’ve just only thought about doing it manually. And so as Dave, I think, as he thought through my desires, he’s kind of always figured out a technical solution to solve whatever problem we were dealing with operationally.
Richard Moot: No, that’s great. And from what I’ve understood is it’s not like all 120 franchises are necessarily using Square. But you’ve been sort of progressively rolling out them using — I’m going to guess that most new franchisees would be using Square. Tell me a little bit about the mixture or the relative number of folks who are actually using Square for their events.
Erin Franklin: Yeah, we were at 98 last week of our 120 franchises. I’ve personally talked to more of those franchise owners, and most of them are planning to switch this year. So it was not something that we could require, because it wasn’t something in our franchise owners — FDDs are their franchise disclosure documents. And so it says a lot about Square and how smoothly this transition has gone with Square and how quickly it happened that so many of the owners voluntarily chose to make this change and make this switch. So yeah, it’s been a really smooth transition, and we do have — the bulk of our owners are already on it.
Rhea Lana: Well, I was just going to add — just an element of our business is that we are a pop-up event, so it adds this element of pressure. And so in a brick-and-mortar store, you can sort of maybe handle it tomorrow or probably fix it when you come in the next day. I mean, everything we do is urgent, and it needs to be done really yesterday. And so we do so many things from merchandising the store to marketing to our customers, and sometimes women are even having to fix the bathroom if they’re in an empty retail space.
So with technology we just need to depend on it. We need for it to work. And so I think that’s just — and the ease of being able to just go get a Terminal, because at the store and we just plug it in and it works. And again, these are just normal women who most of them don’t have business experience. And so Square has just made it fast and simple and dependable. And so we have just appreciated that very much. And I was also just going to add — we haven’t really been in the relationship very long. Erin, have we been through one season?
Erin Franklin: One full season.
Rhea Lana: One full season. Which I think that speaks a lot that we already have this many franchise owners that are using it. And another reason is because of the customer service. I mean, I really want to speak a lot to that, all of Square. Because in a franchise system, especially of women, they talk. We want to work with companies who, when we’re in a crisis, they’re going to actually answer our phone call, and they’re going to actually talk to us even if it’s late at night or on a weekend and we’re in a crisis. And so we have really just appreciated all of the customer service and the dependability that we have and really kind of surprised by it. So we’ve just really appreciated that.
Erin Franklin: Yeah, I was going to say something similar. Just that I was in my event when the issues arose with our previous merchant service. And it doesn’t paint a great light on your business. And it’s hard sometimes to have these families see, “Oh, I promise we’re fixing it.” But the time that it took for Dave and the Square team to flip and start this partnership, it was incredible. And Rhea Lana I have said many times to have this level of customer service come from such a large company, it truly is very encouraging, because sometimes when these companies get very big, customer service may go down. And that has just not been the case with us.
Richard Moot: I think I remember when we chatted before, setting up the podcast. It was a small, little story of the double charging incident. And it’s one of those things where it can be very heartbreaking, because I’ve seen it so many times in talking to so many different businesses that sure, the double charge can be refunded. But for a lot of folks, I think people forget that can take anywhere from three to 14 days before that is actually cleared and returned back to somebody’s account. And if they don’t have a high credit limit or they’re already close to their limit, that means I can’t buy anything for several days. And that’s hard.
Rhea Lana: Well, and with social media now, I mean that was what was going on. People are buying a lot. They’re buying for six kids, the whole season, a lot of money. So now with social media, they were just ripping me up because — and the bank —, they weren’t getting their money refunded quickly, they couldn’t buy groceries. It was so opposite what I stand for and really how I operate my business. And thankfully we solved it, but we were in several days of purgatory. It was terrible, because we couldn’t figure out how to solve it. And so you’re right. I mean, it’s a terrible place to be as a business owner.
Richard Moot: But I think I remember someone saying that it was even in that very next event or next season, they had noticed the switch over to the new payment system and that it all seemed way more seamless. I also quickly want to plug, one of the interesting things that you all have built for Rhea Lana is those digital receipts that give a full, branded invoice. So they can just say, “I don’t want to print a receipt, just go ahead and text me a link.” I can go look at it and follow it up. I’m sure that there’s a multitude of reasons that that helps streamline the checkout experience so you’re not having to wait for something to be printed out, and they get a full thing from you with all the branding. So it’s just a testament to the brand. And also that you were able to get this integrated in a way that can streamline things even further.
And I guess the final thing that I was wanting to ask about on the tech side, and then I want to talk about — just give a picture of what the size and the revenue of this is, for either on a franchise or nationwide. But how long was the initial integration process when you finally got in touch with our development team and you were sort of building out the integration? About how long did that whole thing take?
Rhea Lana: I remember the Square team was surprised how fast it was. We have a pretty small tech department. So was it over the weekend?
Richard Moot: And so just to come back to give an understanding of the scale of Rhea Lana, we have the two events a year, the 120 locations, and to whatever extent that you’re comfortable talking about this, but what would be the average for an individual franchisee or event? And then what is the size of this? Through all of the United States.
Erin Franklin: There’s a range in sales. And so startup new events, they might have $10,000 in sales, where larger events go up to a million dollars in sales for an event. And so there’s a very wide range across the company, and that’s per event.
Richard Moot: And for those larger events, how many point of sales? What is the checkout looking like?
Erin Franklin: Rhea Lana, I mean, most have probably 15 to 20.
Rhea Lana: Yeah, I think we probably set up 20. But it feels like one or two are not going to work for whatever reason. Either it’s the scanner or the printer or the — so we’re always trying to leave some room there for one station not to work, but about probably about 20. And we do try to use some just the way that we have our shop. Our people come to shop. We do try to control the crowds as well, just so that we can handle the number of people in a good flow so people don’t have to wait in line a long time.
Richard Moot: And it just reminded me, the thing I forgot to talk about is that because this is an event-based thing, you all have it. It’s scheduled. But people can buy tickets, and there’s different types of tickets they can buy. So there might be a little presale that some people can opt in for versus the main sale. Could you maybe give a little bit around what that looks like?
Rhea Lana: Yeah. So every franchise is different, but we do have a presale before. Once we open to the public, everything is free. And that’s how really we started was everything was free. But we did have to do a model change several years ago. And so we began offering tickets, and it has been a wonderful model change. And so people — it’s sort of like going to a concert, where the better seats cost a little more. Well, the earlier you come, the tickets cost a little more, because you get the best selection. And, like Dave said earlier, the consignors price their items themselves. So there might be 20 high chairs, but the earlier you come, you’re going to find your favorite brands and the lowest prices. And every item is unique. And so it’s like this wonderful treasure hunt. And so a lot of people do — it’s worth it for them to buy a ticket, and they’re still very affordable and you end up saving. You save the money, especially if you’re buying large items. Families that are having babies and have to buy all the baby gear, it’s definitely worth it. And then we have a half price at the end.
Richard Moot: Oh, that’s great. I mean, I would definitely say I would be guilty of wanting to do the presale type thing. I mean, I would like to get in there and get first pick, make sure that I get everything that I’m looking for. So it definitely makes a lot of sense.
Rhea Lana: And we have fewer shoppers too. So it’s just kind of a quieter, calmer experience. And one of the things I might just throw in, Richard, that we do love to do that’s part of our events is at the end we have a lot of consignors will decide that they want their unsold items to be donated. And so again our POS and our system helps us track all of that. And so then we are able to take those items that the consignors don’t want back, and we have a free shopping time, where foster families and some of the lower levels in the military can come in and get items for free for their family. So it’s really a neat way that we can give back in each community and really bless even more families. So it always warms our hearts. We love the very end.
Richard Moot: I guess my final question I would have, I see that we’re climbing close to time here. My final question would be, like, so how does the pricing of items work? Is it usually the consignor? Is it a partnership between them and the franchisee and figuring how they want to price the item? I’m going to guess that sometimes people have to be, like, “Look, you’re not going to be able to sell it for this much, so I don’t really want to consign it.” But just for those who aren’t familiar with how consignment pricing might work, tell us a little bit about how that all works.
Rhea Lana: Well, I’ll start first, then I’m going to toss it to Erin. But one thing I really did want to mention is that one of the things that we started that really Dave and the IT team get credit for is we do voice entry. And so families — a consignor can just speak into their phone instead of having to type it all in. And so that is another technological advancement that we use, so it helps it go so much faster. A mom can be sitting in the carpool line, talking into her phone, entering the items into the database. But Erin, you could speak to the pricing.
Erin Franklin: We strive for excellence. Rhea Lana mentioned that earlier. And so we do have a minimum price for items, and so that’s $4. And that’s just to keep quality high. We want the quality to be high. And so consignors do get to set their own, but we do have guidelines that we try to have them land in between. And so our hope is always for items to be priced about 25 to 35 percent of retail. And so it just offers enough of a discount that buying used items is a great idea for local families. And so we really try to strive for that kind of range. There have been many times when, as owners, we’ve called a consignor and said, “Hey, might be a little high.” And so sometimes they’re willing to come down. But for the most part, they do set their own prices.
Richard Moot: That makes a lot of sense, because, I mean, I do know that at a certain point you kind of be like, “Well, do we want this to take up space here?” If it’s kind of priced at a thing that no family’s coming around this area or going to want to buy it for that much. So that makes sense.
Rhea Lana: And the consignor chooses that in the POS system.
Richard Moot: Awesome. Well, I see that we’ve used up all of our time here. And I want to thank you all so, so much for attending here and telling us about Rhea Lana. To anybody out there who is interested, please look up Rhea Lana. See if there’s an event going on in your area. And again, I just can’t thank you enough for telling us about your integration, your business, your story. If there’s anything else that you wanted to mention here for if anybody wanted to learn more, I dunno if you have socials or anything that you want to mention for people to follow.
Rhea Lana: Sure. You can find us at Rhealana.com. And, of course, we’re on Facebook and Instagram and LinkedIn. And so we’re pretty easy to find. But we’d love to tell you more about it. We would love to serve moms and markets all over the country.
Richard Moot: Awesome. If you’ve got a project with Square, we’d love to hear about it. Reach out to us on our Discord or on X at Square Dev. Don’t forget to get to subscribe and check out developer.squareup.com for more. Keep building and catch you next time. Thanks.
