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Franchise Costs: Detailed Estimates of Honest-1 Auto Care Franchise Costs (2016 FDD)

by Franchise Chatter on February 19, 2015

in Auto Repair Franchise, Auto Service Franchise, Automotive Franchise, Franchise Costs



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Honest-1 Auto Care Photo from Riverstonepartners.com

This post was updated on March 20, 2017 to reflect information from Honest-1 Auto Care’s 2016 FDD (Item 7).

Detailed Estimates of Honest-1 Auto Care Franchise Costs Based on Item 7 (Estimated Initial Investment) of Honest-1 Auto Care’s 2016 Franchise Disclosure Document

For Start-Up Center

1.  Initial Franchise Fee:  $35,000

  • If you elect to purchase a 3-Pack, your initial franchise fee will be $75,000 instead of $35,000, and the estimated total investment for the first franchise will range from $233,650 to $547,150 due to the increased initial franchise fee.
  • If you elect to purchase a 5-Pack, your initial franchise fee will be $115,000 instead of $35,000, and the estimated total investment for the first franchise will range from $273,650 to $587,150 due to the increased initial franchise fee.
  • No other categories in Item 7 are anticipated to change for the first franchise location for a 3-Pack or 5-Pack.

2.  Leasehold Improvements:  $0 to $120,000

  • Leasehold improvements will vary among locations.
  • Build-to-suit buildings will require very little 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 rare 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.
  • You may purchase land and build a facility yourself. The cost of land will vary considerably depending on many factors, including the geographic region of the United States. No cost for land acquisition has been included here.
  • Typically, an Honest-1 Center requires 20,000 to 30,000 square feet of building area, including parking.
  • If you choose to build a facility or have a lessor do so, construction costs generally will range from $90 to $100 per square foot (based on a ready-to-build site).
  • A 6/8 bay Center requires between 4,000 and 5,000 square feet of building space.

3.  Equipment Package:  $25,000 to $120,000

  • Honest-1 has multiple levels of equipment packages that it offers through its designated suppliers. It also reviews refurbished or used equipment options in some situations.
  • 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 three 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:  $8,000 to $30,000

  • 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.  Deposits (first month’s rent, utilities, sales tax):  $13,000 to $18,000

  • The differences between the low and high ranges is due to the actual size of the Center and its location.
  • The numbers set forth in the chart reflect costs associated with the acquisition of a site by leasing an existing facility. 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 and the type of lease negotiated. Monthly base rents typically are $4,500 to $10,000, but may be higher in some regions of the United States.

6.  Opening Inventory and Supplies:  $3,000 to $12,500

  • 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:  $15,000 to $30,000

  • 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 $15,000 and $30,000, depending on your location, on grand opening advertising.
  • 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.

8.  Training Expenses:  $5,000

9.  Miscellaneous Pre-Opening Costs:  $3,000 to $7,000

  • 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 $20,000

12.  Business Coach – 4 Weeks:  $4,000

  • You must pay for Honest-1’s business coach services for up to 4 weeks. Its business coach will be onsite for 1 to 2 weeks prior and up to 1 to 2 weeks after opening and will assist in all aspects of the opening process.

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:  $68,000 to $100,000

15.  Total Estimated Initial Investment:  $193,650 to $507,150

  • 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. The cost of home page domain fees are included.
  • All estimates set forth in the chart are based upon Honest-1’s experience operating 60 similar automotive centers during the last 10 plus years.

For Conversion Center

  • The total estimated initial investment necessary to begin operation of an Honest-1 Auto Care Conversion Center ranges from $57,150 to $155,650.
  • A conversion franchise owner will incur an initial franchise fee, renovation cost, signage costs, and grand opening costs.
  • Honest-1 may discount the initial franchise fee for a conversion franchise by $10,000.



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