Risk Score
Pending analysis
Investment Range
$255,750 - $1,242,250
Franchise Fee
$63,750
Min Cash Required
$50,000
Total US Locations
64
Business Summary
H-1 Auto Care, LLC offers franchises for outlets operating as 'Honest1' Centers. These centers provide a variety of automobile products and services to the public, including tune-ups, brakes, oil changes, tire sales, and general repair services. Franchisees operate their Honest1 business using a proprietary system developed by H-1 Auto Care, LLC.
Corporate History
Honest1 (H-1 Auto Care, LLC) was formed as a Nevada limited liability company on June 29, 2007. The business operates under the names 'Honest1,' 'Honest-1,' and 'H1.' Its origins trace back to its predecessor, Honest-1 Auto Care, Inc., which was incorporated in Nevada on March 17, 2003, and began offering franchises from June 2003 to June 2006. In July 2007, H-1 Auto Care, LLC acquired a company-owned center from this predecessor and subsequently started offering unit franchises on July 20, 2007. H-1 Holdings, LLC, Honest1's parent company, acquired full ownership in October 2011. Honest1 also has an affiliate, Honest-1 Auto Care, LLC (HAC), a Florida company formed in 2018, that operates company-owned centers. Another affiliate, SLC Opportunities Fund, L.P., is an approved supplier of real estate development services.
Financial Overview
Investment Range
$255,750 - $1,242,250
Franchise Fee (Low)
$63,750
Franchise Fee (High)
$75,000
Minimum Cash Required
$50,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$35,000
Equipment Costs (High)
$760,000
Working Capital
$62,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Honest1 appears to be in good financial health, as indicated by its unqualified audit opinion for the fiscal years ending December 31, 2023, 2022, and 2021. The auditors found that the company's financial statements are presented fairly. While Honest1 holds its cash in bank deposits that may sometimes exceed federally-insured limits, the company has not reported any losses in these accounts. The auditors' report did not include any going concern qualifications, suggesting that Honest1 has sufficient financial resources and stability.
Financing Details
Honest1 does not offer any direct or indirect financing to its franchisees. This means Honest1 will not provide loans or guarantees for notes, leases, or other obligations. Franchisees will need to secure their own funding through third-party lenders.
Performance Metrics
Total US Locations
64
Franchised Units
61
Corporate Units
3
Avg Square Footage
5,500
Franchising Since
2007
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Honest1 has two ongoing legal cases. One case, filed on October 5, 2021, involves Honest1 suing a former franchisee, its owners, and former employees. Honest1 claims the former franchisee breached franchise agreements and a mutual termination agreement, engaged in fraudulent misrepresentation, unfair competition, and trademark infringement by operating competing businesses and making false statements. Honest1 is actively pursuing these claims. The second case is an arbitration proceeding initiated on February 29, 2024, by former Region Developers. Honest1 had terminated their agreements in September 2023 because they failed to meet franchise sales quotas and other obligations. The former developers claim wrongful termination, and Honest1 has filed a counterclaim for breach of contract. A final hearing for this arbitration is scheduled for September 2025.
Bankruptcy History
Honest1 has no bankruptcy history to report for the company or its key executives.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Honest1 franchisees must be in substantial compliance with the current Franchise Agreement and all other agreements. They must pay a renewal fee, which is 25% of the then-current Initial Franchise Fee, and sign a general release of claims against Honest1. Franchisees are also required to sign Honest1's then-current form of Franchise Agreement, which may have materially different terms and conditions, though territory boundaries and renewal fees (compared to similarly situated franchisees) will remain the same. Franchisees and their approved managers must attend Honest1's current qualification and training programs at their own expense, and the facility must be refurbished to meet current design and decor standards. They must also confirm they have the right to possess the premises for the renewal term and maintain all necessary licenses and permits.
Training & Support Program
Franchisor Assistance
Honest1 provides extensive support to its franchisees. Before opening, Honest1 offers assistance with site selection and approval, provides standard specifications and layouts for the center's construction, and reviews site and construction plans. Franchisees receive initial training, and a business coach is provided on-site for three weeks (one week before opening and two non-consecutive weeks after opening). Honest1 also grants access to its confidential operations manuals. After opening, Honest1 continues to provide advisory assistance and consultation via emails and telephone, works to maintain high standards of quality and customer satisfaction, and provides updates to manuals and training aids. Franchisees also benefit from merchandising and marketing programs, periodic training, quality control audits, product information, and various bulletins and newsletters. Honest1 coordinates and conducts mandatory periodic conventions or meetings for its franchisees every 12 to 24 months.
Initial Training Hours
195
Training Location
Corporate headquarters in St Petersburg, FL, with some self-paced online training
Ongoing Support
After opening, Honest1 franchisees receive ongoing advisory assistance and consultation through emails and telephone. Honest1 continually works to maintain high standards of quality, cleanliness, safety, customer satisfaction, and service, providing updates to manuals and training aids as needed. Franchisees benefit from merchandising programs, marketing programs, and other data and advice. Honest1 also coordinates and conducts periodic training programs and performs quality control audits of franchised businesses. Franchisees receive product information and recommendations and are provided with bulletins, brochures, manuals, and newsletters regarding system plans and policies. Honest1 holds mandatory conventions or meetings for its franchisees every 12 to 24 months to ensure continued system alignment and support.
Franchise Requirements
Ideal Candidate Profile
Honest1 seeks franchisees who are deeply committed to the success of their business, emphasizing personal and continuous effort, supervision, and attention. If the franchisee is a business entity, a designated representative must be appointed. This representative must successfully complete initial training, dedicate full-time energy and best efforts to the management and operation of the Honest1 Center, and be approved by Honest1. While an ownership interest for this representative is recommended, it is not strictly required. Honest1 also recommends having at least one on-premises manager in addition to the designated representative, subject to Honest1's approval. All owners, officers, and partners of an entity franchisee, along with their spouses, must personally guarantee the franchise's obligations. This profile indicates Honest1 is looking for dedicated, hands-on, or at least highly supervisory business operators.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Exclusive
Territory Size Requirements
Honest1 franchisees are granted an exclusive territory, typically defined as a three-mile radius around their approved Honest1 Center location. Honest1 reserves the right to adjust this territory to a smaller radius or an irregular market area based on factors like population density and local characteristics. However, once the territory for an approved Center is defined and disclosed, Honest1 cannot alter it further based on changes in population or geography.
Staffing Notes
Honest1 strongly believes that the success of the franchised business depends significantly on the owner's personal and continued efforts and supervision. If the franchisee is an entity, it must appoint a Designated Representative who will complete initial training, devote full-time efforts to the management and operation of the Honest1 Center, and be approved by Honest1. It is recommended that this representative hold an ownership interest. Additionally, Honest1 recommends that each center have at least one on-premises supervisor/manager, in addition to the Designated Representative, if applicable. Any manager must also successfully complete initial training and other required programs. Franchisees must also employ a sufficient number of competent and trained employees, attired as specified in the Manual, to efficiently serve customers and maintain System standards. Honest1 does not control employment policies like hiring, pay rates, or termination, but franchisees must adhere to System standards.