Honest1 vs Merlin
Honest1 vs Merlin: Honest1 costs $1.5M to $2.3M to open; Merlin costs $262K to $531K. Honest1 has 70 units, Merlin has 61. SBA loan history: Honest1 = 89 loans (7.9% default); Merlin = 74 loans (12.2% default). The franchise with more SBA funded units, a lower SBA default rate, and a lower royalty load is the safer financing bet; see the comparison below.
Honest1 vs Merlin: Capital, Scale & Lending Analysis
Analysis based on FDD filings and SBA 7(a) loan level data. Each pairing reflects a unique combination of capital intensity, system scale, and financing path.
Capital Intensity
Merlin requires the lower minimum capital commitment ($262K vs $1.5M for Honest1), a 475% spread. Initial franchise fees come in at $35K for Honest1 versus $30K for Merlin, Merlin has the lower entry fee. Ongoing royalty load is 6% for Honest1 and 6.9% for Merlin, giving Honest1 the lighter per-unit drag on operating income.
System Scale & Tenure
On scale, Honest1 operates 70 units to Merlin's 61.
SBA Lending Profile
Honest1 has the deeper SBA lending track record, with 89 7(a) approvals compared with 74 for Merlin. Honest1's peak SBA year was 2017 (14 loans); Merlin's peak was 1999 (9 loans). Honest1's more recent peak generally indicates fresher lender appetite. Honest1 has the most SBA funded units in MN, with 20. Merlin leads in IL, with 61. Borrowers should pick the brand whose strongest SBA state matches their own state for warmer lender introductions. Average SBA loan size on funded Honest1 deals is $451K vs $236K for Merlin, useful as a sizing anchor when modeling your own unit.
Risk Signal
SBA default rates are 7.9% for Honest1 and 12.2% for Merlin, Honest1 has the cleaner SBA loss record by 4.3 points. PeerSense FPI scores come in at 51 (Moderate) for Honest1 and 23 (Fair) for Merlin, giving Honest1 the stronger composite signal across SBA performance, lender appetite, and operational consistency.
Health & Performance
FPI Score | 51/100 | 23/100 |
Health Tier | Moderate | Limited |
Confidence | N/A | N/A |
Lending Trend | Declining | Declining |
SBA Lending
SBA Loans | 89 | 74 |
SBA Volume | – | – |
Default Rate | 7.9% | 12.2% |
Peer Tier | established | established |
Investment & Costs
Total Investment | $1.5M to $2.3M | $262K to $531K |
Franchise Fee | $35K | $30K |
Royalty Rate | 6% | 6.9% |
Ad Fund | N/A | 5% |
Liquid Capital | N/A | N/A |
Net Worth Required | N/A | N/A |
Financial Performance (Item 19)
Item 19 Status | Not Disclosed | Not Disclosed |
System Size & Operations
Total Units | 70 | 61 |
Franchised Units | 70 | 61 |
Company Owned | – | – |
Term Length | 10 yrs | 20 yrs |
Brand Information
Year Founded | N/A | 1975 |
Franchising Since | 1960 | N/A |
Years Franchising | 66 yrs | N/A |
Headquarters | N/A | Charlotte, NC |
Category | General Automotive Repair | General Automotive Repair |
Website | ||
FDD Year | 2024 | N/A |
Which Is Better, Honest1 or Merlin?
Lower upfront capital required
Tie
Honest1: $1.5M starting · Merlin: $262K starting
More SBA lender confidence
Honest1
Honest1: 89 SBA loans · Merlin: 74 SBA loans
Lower SBA default rate
Honest1
Honest1: 7.9% · Merlin: 12.2%
Larger system & brand presence
Tie
Honest1: 70 units · Merlin: 61 units
Lower ongoing royalty load
Honest1
Honest1: 6% · Merlin: 6.9%
More lender financing options
Honest1
Honest1: 44 unique lenders · Merlin: 24 unique lenders
Decision matrix uses publicly disclosed FDD and SBA loan data. Not a recommendation. Your best franchise depends on capital, market, operating capacity, and risk tolerance.
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About These Franchises
Honest1 vs Merlin: Franchise Funding Comparison
Comparing Honest1 and Merlin is about more than brand preference. It's about which franchise fits your financial profile and funding strategy. Investment ranges from $262K to $2.3M.
Honest1 has 89 SBA loans on record and Merlin has 74. Those totals are cumulative history rather than a measure of current appetite. Recent lending activity is trending down for at least one of these brands, so current lender appetite has to be checked deal by deal rather than assumed from the totals.
SBA 7(a) loans are the most common franchise funding vehicle, offering up to $5M with as little as 10% down. PeerSense connects franchise buyers with the specific lenders who have approved loans for these brands, not generic referrals, but lenders with actual franchise lending track records.
Data sourced from SBA loan records, Franchise Disclosure Documents, and public filings. Updated regularly. Not financial advice, consult with a lending professional before making investment decisions.
Honest1 vs Merlin, Frequently Asked Questions
Which is a better franchise investment, Honest1 or Merlin?
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Can I finance Honest1 or Merlin with an SBA loan?
Which has a lower SBA default rate, Honest1 or Merlin?
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Page Review
Reviewed by Edward L. Freeman, Founder and Managing Director, PeerSense
- PeerSense is a capital advisory firm that places commercial financing with direct capital sources; the capital source sets final terms.
- Edward L. Freeman founded PeerSense in January 2020.
- He is a Registered Franchise Consultant with Business Alliance, Inc., a credential issued in March 2022, and worked as a franchise consultant there from March 2022 to May 2023.
- His recorded experience includes a $22 million SBA construction loan, with about $16 million funded on the deal.
- In the 12 months through September 30, 2026, PeerSense tracked 912 publicly announced financings with a disclosed size of $361.32 billion. PeerSense Capital Data Report · Methodology page
Last reviewed LinkedIn profileAbout Edward Freeman