Honest-1 expects 'deluge'

SCOTTSDALE, Ariz.—Honest-1 Auto Care L.L.C. will grow its franchisee base by 50 percent in 2013. That tally takes into account locations that the franchisor opened earlier this year in Tacoma, Wash., and Portland, Ore., along with another 13 expected to open before year-end. It's been four years since Honest-1 completed the rebranding of its now eco-friendly-focused business model, and Chip Baranowski, Honest-1's vice president of franchise development, said he couldn't be more pleased with the program's rate of expansion. “We opened eight stores last year, and we've had two open this year and now we have a whole tsunami hitting here soon,” said Mr. Baranowski, who co-owns the program along with Jack Keilt and Rissy Sutherland. “We're finishing up financing and construction, and we're going to see a deluge in openings the rest of this year. It's pretty exciting.” Scheduled to open this year are outlets in Atlanta; Columbus, Ohio; Dallas; Houston; Philadelphia; Portland, Ore.; Minneapolis (three stores); San Antonio; San Diego; and northern Virginia (two stores). The new openings would boost the Scottsdale-based franchisor's store count to 45. But physical growth is not the only kind Honest-1 is seeing, Mr. Baranowski said. “We're seeing phenomenal growth sales-wise. Through the first two quarters of this year our sales are up 35 percent, and our same-store sales are up 12.2 percent,” he said. Mr. Baranowski attributed the firm's success to, among other things, the maturity of its franchisee owners and its go-to-market strategy. “We're not just waiting for people to come to us, and we're building long-term relationships (with customers),” he said. “A typical automotive shop out there today is not focusing on the whole customer experience. It's a transaction-based business. We're taking the time to educate our customers, making them feel comfortable and building relationships so they come in four or five times a year. “A lot of people just go out there and they're shopping around, and they don't have a home,” he continued. “We're trying to provide them that home, so when they come that's one less thing they need to worry about in life is the repairs done on their vehicle.” Mr. Baranowski said he anticipates the Honest-1 program will top out with around 70 franchise locations by year-end 2014, and the company's goal is to reach close to 200 locations within the next three years. The Honest-1 Auto Care program offers potential franchisees a chance to own a “100-percent certified eco-friendly” business. The company developed its own in-house eco-friendly certification process, called the Environmentally Sustainable Actions (ESA) program, which set standards and practices in four primary categories: pollution prevention, recycling, resource conservation and offering and promoting the company's eco-friendly services. Among Honest-1's environmentally conscious practices are: c Offering oil changes using re-refined oil; c Offering a 21-point Eco-TuneUp package, which includes platinum spark plugs and wires, synthetic oil, lifetime air and oil filters and nitrogen inflation for the vehicle's tires; c The use of low-energy lighting and short-flush toilets; and c Recycling batteries, filters and antifreeze. New Honest-1 franchisees pay an upfront fee of $35,000 along with a 6-percent weekly royalty fee. The company estimates initial investment in a franchise to be between $170,000 and $399,000. To reach this reporter: [email protected] crain.com; 330-865-6148.