Updated March 18, 2019.
Detailed Estimates of Honest-1 Auto Care Franchise Costs Based on Item 7 (Estimated Initial Investment) of Honest-1 Auto Care’s 2018 Franchise Disclosure Document
1. Initial Franchise Fee: $45,000
2. Leasehold Improvements: $0 to $300,000
- Leasehold improvements will vary among locations.
- Build-to-suit buildings typically will require no improvements and it has been Honest-1’s experience that most landlords will grant some tenant improvement allowance when signing a long-term lease.
- In the instance where you are unable to negotiate leasehold improvements into the rent or obtain the necessary improvements directly from the landlord, you may incur additional expenses.
- Improvements such as painting, counter tops, lounge clean up, and door openings may be considered as part of leasehold improvements.
- If you elect to build completely from the ground up, then you will probably have additional costs. These costs are not reflected in the high range as such costs will vary tremendously.
3. Equipment Package: $25,000 to $150,000
- Honest-1 has multiple levels of equipment packages that are offered through its designated approved suppliers.
- The required equipment package includes the minimum equipment for your Honest-1 Center and is based on a standard 8-bay configuration.
- Honest-1 has a second equipment package that includes all of the required items as well as additional equipment you may want to include at your Center.
- You may qualify for leasing equipment from any non-affiliated third-party leasing company. If you do, your initial cash outlay may be greatly reduced.
- A leasing company may require 3 months’ worth of lease payments as the only initial cash payment.
- The equipment includes typical automotive equipment like a wheel alignment system, tire mounting machine, lifts, lube equipment, battery charger and other similar items, and a State inspection machine, where applicable.
- Honest-1 does not lease equipment to you or otherwise finance your purchase of the required equipment.
4. Signage: $10,000 to $40,000
- The cost of the sign structures, exterior sign faces, awning, and interior signs will vary depending on the site, number, and type of signs you buy. All signage must meet Honest-1’s specifications.
5. Rent Expense (deposits, rent, utilities, CAM, sales tax, etc.): $0 to $100,000
- The differences between the low and high ranges is due to range of monthly base rents, the actual size of the Center, and its location.
- The numbers set forth in the chart reflect costs associated with the initial leasing of a facility, and the first 3 months of rent-related expense which may be paid prior to opening. No cost for land acquisition has been included here.
- You would normally develop an Honest-1 Center either by leasing and converting an existing facility or by entering into a build-to-suit lease under which the landlord constructs the Honest-1 Center and leases it to you.
- Rental costs vary considerably depending on regional and local factors including location, the actual size of the Center, and the type of lease negotiated. Monthly base rents typically are $8,000 to $25,000, but may be higher in some regions of the United States.
6. Opening Inventory and Supplies: $5,000 to $15,000
- Under the Franchise Agreement, unless Honest-1 designates a specific source for items you must purchase, you may obtain all required initial and continuing inventory from sources of your choosing if each item meets the franchisor’s specifications or has been approved in writing by it.
- Honest-1 has approved/preferred vendor programs as well.
7. Grand Opening Advertising and Initial Marketing: $48,000 to $72,000
- Advertising costs or expenses will vary depending upon the market in which you operate and the type of advertising used. You are required to spend between $48,000 and $72,000, depending on your location, on grand opening advertising and initial marketing during the first 6 months of operation.
- You may need a variety of promotional activities to take place during the first month of operation. These could include print media, broadcast media, direct mail, coupons, and press releases, all of which shall be consistent with the size of the market.
- Honest-1 must approve of your grand opening advertising campaign before it is conducted, as well as other marketing materials.
8. Training Expenses: $5,000
9. Miscellaneous Pre-Opening Costs: $3,000 to $10,000
- This item covers miscellaneous opening costs and expenses, like installation of telephones, business licenses, legal and accounting expenses, and insurance premiums, including liability and workers’ compensation.
10. Insurance: $3,000 to $4,000
11. Office Supplies, Furniture, Fixtures, Computers, and Software: $10,000 to $30,000
12. Business Coach – 3 Weeks: $17,500 to $20,000
- You must pay for Honest-1’s business coach services for up to 3 weeks. Its business coach will be onsite for 1 week prior and 2 non-consecutive weeks after opening and will assist in all aspects of the opening process.
- In addition, you will be responsible for the actual travel expenses incurred by Honest-1’s business coach which are estimated to range from $2,500 to $5,000, but may be higher, and include airfare, ground, hotel, rental car, and meals.
13. Accounting Service – First 3 Months: $1,650
- You must use Honest-1’s approved accounting service for a minimum of 12 months. You will pay approximately $550 with a $100 late fee per month directly to the accounting service.
14. Additional Funds – 3 Months: $50,000 to $75,000
15. Total Estimated Initial Investment: $223,250 to $867,650
- These figures are based on current costs or reasonable estimates and are, unless indicated otherwise, for an initial period of 3 months from the time the Honest-1 Center opens for business.
- All estimates set forth in the chart are based upon management’s experience.