Verified — real FDD extraction
SBA-eligible · directory code S1426 since 2017
RESTORATION 1
Cleaning & Restoration · independent · est. —
Restoration 1 provides emergency water, fire, smoke, and mold damage mitigation and restoration for homes and businesses, with much of the work paid through insurance claims. A franchisee operates a territory-based business with technicians, vehicles, and drying equipment, responding to property-damage calls from owners and insurers.
RESTORATION 1 net unit count declined -5.1% from 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The main concern in the record: too many owners are failing outright rather than selling.
Exit rate · latest year
10.1%
vs 3.1% across 25 cleaning & restoration systems
Cost to open
$127K–$310K
Item 7 total investment range
SBA loan defaults
10.5%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 30 of 298 franchised outlets left the system — a 10.1% annualized exit rate, vs 3.1% across 25 cleaning & restoration systems. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 289 | 293 | 298 |
| Opened | 19 | 29 | 10 |
| Transfers | 10 | 13 | 8 |
| Terminations | 15 | 24 | 21 |
| Non-renewals | 0 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 0 | 0 | 9 |
| Outlets at end | 293 | 298 | 278 |
| Net change | +4 | +5 | -20 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 117 SBA-backed loans to RESTORATION 1 franchisees since 2015. Of the 57 that have resolved, 10.5% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
10.5%
6 of 57 resolved defaulted
75.1%
avg. charged-off $ ÷ approved $
7.9%
default rate × loss severity
$302,617
what recent franchisees borrowed
44 mo
approval → charge-off, defaulted loans
19 vs 19
distinct banks still lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO RESTORATION 1 BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
A typical RESTORATION 1 buyer since 2020 borrowed $303K through SBA — about $44K a year in debt service. Against the brand's own disclosed median unit revenue of $760K, that is 5.8% of every dollar the store takes in — before rent, payroll, food, or royalty.
Who finances it
United Midwest Savings Bank National Association
27.2% of this brand's loans
That lender charges off 35.2% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
60.8%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
−12.4pp
multi-unit vs single-unit owners
Owners of multiple units default at 4.3%; single-unit owners at 16.7%.
Computed from 117 SBA 7(a)/504 loans to RESTORATION 1 franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $60K franchise fee (Item 5) and a total investment of $127K–$310K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$127K–$310K
all-in investment range
Franchise fee (Item 5)
$60K
upfront, one-time
Royalty (Item 6)
7%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$70K
7% of sales, before profit
Over a 10-yr term
$700K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for RESTORATION 1 with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 2 wage cases against operators of this system, recovering $24K in back wages for 13 workers. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
2
Back wages owed
$24K
Employees affected
13
Since 2020
0
Read this carefully. The employers in these cases are individual RESTORATION 1 franchisees — separately owned businesses operating under the brand name — not RESTORATION 1 itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2019.
Modeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand looks riskier than 83% of systems we score.
Risk percentile
83 / 100
Measured
Modeled SBA charge-off
18.0%
Observed SBA charge-off
10.5%
Top drivers: Share financed by high-loss lenders (raises) · System size (log units) (lowers) · Net unit growth (raises) · Investment ceiling (log) (raises). 50+ resolved loans and complete disclosure data — the score is checkable against the brand's observed rate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for RESTORATION 1. That's a good sign — but it reflects news coverage, not a guarantee.
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing RESTORATION 1's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →RESTORATION 1 franchise questions, answered from the filings
What percentage of RESTORATION 1 franchises closed last year?
In RESTORATION 1's latest FDD Item 20 (fiscal 2025), 30 of 298 franchised outlets left the system — an annualized exit rate of 10.1% — compared with 3.1% across 25 cleaning & restoration systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a RESTORATION 1 franchise cost?
Per RESTORATION 1's 2026 FDD, buying in requires an initial franchise fee of $60K (Item 5) and a total initial investment of $127K–$310K (Item 7).
What royalty does RESTORATION 1 charge?
RESTORATION 1 charges an ongoing royalty of 7.0% of gross sales, per Item 6 of its 2026 FDD.
Does RESTORATION 1 disclose earnings (Item 19)?
Yes — RESTORATION 1 makes a financial performance representation in Item 19 of its 2026 FDD, reporting a median unit volume of $760K. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for RESTORATION 1 franchises default?
Across 117 SBA-backed loans to RESTORATION 1 franchisees since 2015, 6 of the 57 that have resolved were charged off — a 10.5% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.