What is a Master Franchise/Area Representative?
Honest-1 Auto Care has developed a Master Franchise regional program which we refer to as an Area Representative (“AR”). This program allows an AR to acquire an exclusive territory for the purpose of selling franchises and servicing the franchises that are sold in that particular area. The AR pays a fee for the right to own the territory, develop and service a specific number of Honest-1 Centers, and in return, receives 50% of the initial franchise fees and 50% of the royalties paid by the franchise owners operating in their area. Each AR has a development timetable within which to sell franchises in the exclusive territory. Generally it is a requirement to sell one franchise per year until the penetration with the territory reaches one Center per 200,000 population. Honest-1 believes that a fully penetrated market area should attain one Center per every 100,000 of population. The term of the AR Agreement is 20 years with one 10 year option to renew.
