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Signature Inns founder plans auto-care franchises

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A Scottsdale, Ariz.-based auto repair franchise is seeking to expand into Indiana and has tapped the founder of the Signature Inns chain to help lead the effort.

John Bontreger and business partner Mark Carney have assumed the roles of co-regional developers for Honest-1 Auto Care, which hopes to open as many as 20 shops in Indiana over five to seven years.

Founded in 2003, Honest-1 has 26 locations throughout the country and is targeting Indiana as part of a Midwestern expansion. Bontreger and Carney will be responsible for locating franchisees.

Veterans of the Indianapolis business community might recall that Bontreger founded Signature Inns Inc. in 1978 and opened his first hotel in 1981, on Michigan Road near the Pyramid office towers.

He opened 35 hotels in seven states and took the company public before selling it in 1999 to Atlanta-based Jameson Inns Inc.

Carney worked for Signature’s outside auditor before Bontreger hired him in the early '90s.

Following the sale of Signature, Bontreger and Carney founded Riverstone Partners, a small commercial and multifamily developer. A few of its notable projects include condominiums in the Stonegate development in Zionsville and a retail building in Fishers anchored by Handel’s Homemade Ice Cream & Yogurt.

Besides assisting franchisees with site location and securing financing, they’ll provide consulting once the franchises are operating.

“We look to find certain characteristics in our region developers that [Bontreger and Carney] both have,” CEO Jack Keilt said. “Their ability to work with people, their experience level, are very strong in correlation to the success factor that we look for.”

The slowdown in the real estate market prompted the pair to explore other options and they discovered the Honest-1 opportunity online.

“In a way, we’ll be going through the same process of development, but we’re doing it in the auto-care business,” Bontreger said. “We’ve done all that stuff in the hotel business and in more recent years [with Riverstone Partners].”

The two are in charge of finding franchisees throughout Indiana, but the target markets are the larger metropolitan areas such as Indianapolis, Cincinnati and Louisville.

Indianapolis could have at least five locations, Bontreger said.

Secondary markets would include Elkhart, Evansville, Fort Wayne and South Bend.

“The one thing that really impressed us is the customer-friendly approach,” Bontreger said. “They’re committed to going the extra mile for their customers. I wouldn’t be involved in anything where the focus wasn’t on that.”

Honest-1 prefers business experience over auto backgrounds for its franchisees. Financial requirements include a minimum net worth of $350,000 with at least $90,000 in liquid assets, according to the company’s website.

Startup costs range between roughly $175,000 and $290,000, depending on the size of the facility, number of bays and equipment. The costs include $30,000 in franchise fees, $35,000 to $70,000 in working capital and $13,000 to $18,000 in deposits and first month’s rent.

Bontreger and Carney would share in royalty fees the franchisees pay to the company.

The typical Honest-1 facility is 4,000 square feet with six service bays. The company favors existing buildings that can be leased and renovated to fit specifications.

To appeal to a female demographic, Honest-1 facilities feature tiled lobbies with leather furniture, Internet work stations, complimentary beverages, large-screen televisions and a children’s play area.

Bontreger and Carney have built quite a Rolodex through the years and will use “some good old-fashioned networking” to find franchisees.

Bontreger thinks interest in the franchises could be high, considering the age of the average car on American roads is now at a record—close to 11 years old, according to R.L. Polk Co.

“This is an industry that’s growing,” he said. “We really saw an opportunity to take the auto-care business and really make a mark.”
 

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  • Entering a Soft Maket
    While the strategy looks good on paper the reality is that there is too much capacity in the market already. With unemployment high, high fuel prices and less miles driven the customer demand is down.

    Investors should look hard before they leap!

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