Honest-1 Auto Care®
Date of Incorporation: March 17, 2003
Franchising Since: 2003
Address: Las Vegas, Nevada
Description: Honest-1 Auto Care, Inc. offers "Honest-1" automotive products and services (including engine maintenance, lubrication, oil change and brake products and services) to the public at an "Honest-1" Center.
Franchise Offer: Honest-1 Auto Care grants franchises for the retail sale of automotive repair and various automotive tune-up and brake services, lubrication, oil changes, the sale of tires and rims and other related automotive services to the general public. The initial franchise fee for a single Center is $25,000. If the franchisee converts an existing automotive repair facility to an "Honest-1" Center, the initial franchise fee may be discounted by between 10% to 50%.
Financial Assistance: Honest-1 Auto Care, Inc. does not offer any direct or indirect financing nor do they guarantee any note, lease or obligation.
Training and Assistance: The franchisee must successfully complete initial training at least 2 weeks before starting to operate an "Honest-1" Center. The training will last for 2 weeks, for 8 hours per day, and training will be held on Monday through Friday of each week for a total of 80 hours of classroom and on-site instruction. Although there is no fee to attend any training program in Las Vegas, Nevada, the franchisee must pay for themselves and/or their employees' transportation, lodging and meal expenses, wages and employee benefits, and materials fees, including the cost of the applicable training manuals while in training programs. The franchisee is not required to attend any additional training programs.
Territory: The franchisee is granted the right to operate an "Honest-1" Center at a site the franchisor approves. The franchisor will not establish another "Honest-1" Center, franchised or company-owned, within a 2 mile radius of the Center location as set forth in the Franchise Agreement (protected territory). The Franchise Agreement does not prohibit the franchisee, franchisor or other franchisees from servicing customers who reside outside the protected territory, but the franchisee is prohibited from actively soliciting outside of the Protected Territory. The franchisor will not solicit orders or conduct business within the franchisee’s Protected Territory.
Term of Agreement and Renewal: The term of the franchise agreement is 20 years with an option to renew for an additional 10 years if the franchisee is in good standing. There is no renewal fee.
Obligations and Restrictions: Unless the franchisor permits otherwise in writing, the franchisee must devote full time, energy and best efforts to the management and operation of the "Honest-1" Center. , If the franchisee is a corporation, Limited Liability Company or partnership, a trained manager who the franchisee has designated and the franchisor has approve must personally manage the franchised business at all times. The franchisee must offer all required "Honest-1" products and services. Required "Honest-1" services include: various automotive tune-up and brake services, lubrication, oil changes and other related automotive services.
Total Number of Units: Total number of franchised units at the end of 2005: 5
Investment Table:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Leasehold Improvements | $0 | $15,000 |
| Equipment Package | $56,000 | $73,000 |
| Signage | $16,000 | $29,000 |
| First and Last Month's Rent and Security | $16,500 | $30,000 |
| Utility Deposits | $l,000 | $2,000 |
| Opening Inventory and Supplies | $8,000 | $14,000 |
| Grand Opening Advertising | $3,000 | $5,000 |
| Training Expenses | $5,000 |
$5,000 |
| Miscellaneous Pre- Opening Costs | $l,000 | $3,500 |
| Advertising Fee -3 months | Not Calculable | Not Calculable |
| Royalty - 3 months | Not Calculable | Not Calculable |
| Additional Funds - 3 months | $25,000 | $50,000 |
| Total estimated Initial Investment | $156,500 | $231,500 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 6% of weekly gross sales |
| National/Regional Advertising | 1% of weekly gross |
| Local Advertising | Minimum 3% of weekly gross sales |
| Transfer/Training | $25,000 if the franchisee is an Area Representative or 50% of the then current initial franchise fee |
| Rental Markup | $0-$1,000 per month |
| Refresher Training | No charge |
| Renewal | No Charge |
| Audit | Cost of inspection or audit |
| Interest | Lesser of 2% above prime or highest contract rate of interest allowed by law |
| Confidential Operating Manuals | $500 |
| Costs and Attorneys' Fees | Will vary under circumstances |
| Indemnification | Will vary under circumstances |
| Relocation Expenses | Costs of relocation |
| Income Taxes | In addition to monthly royalty fees, Franchisor has the right to collect from the franchisee the cost of all income taxes, sales taxes and other taxes arising as a result of the franchisor licensing of intellectual property to the franchisee in the state where the franchise is located, as well as any assessment on the royalty fees, advertising contributions and any other income the franchisor receive from the franchisee. |
The above information has been taken from the UFOC/FDD of Honest-1 Auto Care, Inc.
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