SCOTTSDALE, Ariz. (Aug. 3, 2009)—When it comes to setting one's automotive service franchise apart from the competition, what could be more unusual than making a claim to environmental friendliness in an otherwise dirty business?
Last year, Honest-1 Auto Care, a small franchise under new ownership and leadership, was trying to create a customer-centered approach, but it also wanted to be more than just another car repair place. It decided to embark on a rebranding and reimaging process to find its niche in the marketplace. After hiring a consulting firm and researching consumer analysis and feedback, the 19-outlet franchise program decided to target environmentally conscious consumers.
“No one was in that space, so we can be known for that. It fit right in with being customer friendly and women friendly,” said President and CEO Jack Keilt.
The Honest-1 stores scattered around the U.S. try to portray an upscale image with amenities for its customers—an Internet café, cushioned chairs, flat-screen TV, aesthetically pleasing bathrooms and a children's play area.
“That's because two-thirds of clients are women. We make it feel good. Moms think of their children and ecological implications,” he said. While the image may be upscale, about 80 percent of the franchise's customer base is middle income, according to Mr. Keilt, because the upper-income customers typically still have new cars under warranty and the lower-income clientele are impacted more heavily by the economy and choose to do maintenance themselves.
The Scottsdale-based franchise has 15 area representatives responsible for setting up franchisees in their regional markets. So far, 19 franchised stores are operating around the country, with Las Vegas having the largest concentration of six outlets.
Most franchisees are new to the auto service business. Even Mr. Keilt was new to the industry when he joined the company last year, although he had 35 years' experience in franchising for other businesses, including a 1,400-outlet hair salon chain. He was brought on board as a partner after Gary and Lisa Messer bought the then-4-year-old Honest-1 chain in 2007.
The new management hired a rebranding consultant last year and then launched a revamp that included changing its logos and trademarks. “Since the chain was small, we have the ability to reshift,” Mr. Keilt said.
Honest-1 now claims it's “the only national franchise in automotive repair to be 100-percent certified eco-friendly.”
The “certified” part was an in-house effort. Mr. Keilt said the company couldn't find a universal eco-friendly business standard that fit the automotive business, so the company developed and registered its own.
Called the “Environmentally Sustainable Actions” (ESA) program, the in-house certification consists of 92 points, of which 85 percent has to be met by a store to earn certification. The program sets standards and practices in four primary categories: pollution prevention, recycling, resource conservation and offering and promoting the franchise's Eco-Friendly Auto Care services.
The certification program was introduced in May of last year and by that August all the stores met the requirements and earned an ESA seal to put on their windows, Mr. Keilt said. “They embraced it and loved it.”
Among the environmentally-friendly programs the company adopted are:
c The company contracted its own line of eco-friendly automotive fluids containing organic friction modifiers for use in the service bays. So far its Eco 360 line includes transmission fluid, coolant and oil and fuel treatments. Mr. Keilt said the products reduce friction in the engine thereby improving mileage and lowering emissions.
c The firm has begun offering oil changes using re-refined oil that it claims is of the same quality as the original product.
c The outlets offer a 21-point Eco-TuneUp package that includes platinum spark plugs and wires, the Eco-360 fuel treatment, synthetic oil, lifetime air and oil filters and nitrogen inflation for the tires.
It's the premium package in its good-better-best line-up of services. While many customers ask for the “better” tune-up using the Eco-360 products, the recession has dampened interest in the Eco-TuneUp. “There is the cost consideration—it's twice the cost (of a regular tune-up) and they are being asked to rewire their transmission with platinum wire,” Mr. Keilt said.
c The stores recycle oils, batteries, filters and antifreeze and use environmentally-friendly cleaning and degreasing products and water-based cleaners.
c Franchise locations have installed landscaping that doesn't require watering and incorporate environmentally-friendly interior features, such as skylights, low-energy lighting and short-flush toilets.
c The company recently “bought” 40,000 trees—actually a donation to a U.S. forest reclamation fund—and for each service purchased, an Honest-1 customer gets to have a $1 sapling planted in his or her honor and receive a sticker proclaiming, “I planted a tree today.”
c The franchise is looking to attract hybrid car owners and has begun training its technicians on how to handle the unique repair issues, particularly the batteries. Soon “we'll be the only chain to service hybrids outside of car dealerships,” Mr. Keilt claimed.
c The company also is investigating the use of bio-fuels, such as animal and plant oils from restaurants, and testing eco-friendly brake pads that reduce metallic dust.
The company hopes touting its eco-friendly services and business practices will draw in additional customers concerned about such issues. “In general, our prices are the same as anyone else,” Mr. Keilt said.
Apparently the reimaging has paid off so far. Same-store sales jumped 12.4 percent last year over the previous year, and sales increased 11 percent in the last quarter. “It's largely a testimonial to our attraction and appeal to the market and having a unique operation,” he said.
“Last year was a tough year for franchising. We didn't open new franchisees. Instead we retrained and reshifted last year. We restarted the franchise this year and sold four stores in the past two months. There is a tremendous interest in franchising.”
Five more franchised stores are under development, and Mr. Keilt said the company would like to double its size in the next 18 months.