Rainbow International Restoration Franchise Costs & Fees
Date of Incorporation: 1980
Franchising Since: 1981
Headquarters: Waco, Texas
Business Description: The franchisor is Rainbow International LLC. The franchisor offers franchises which provide carpet cleaning, repair, reinstallation and related services; upholstery, drapery and ceiling cleaning and related services, reconstruction and related services; and deodorization services for residential and commercial customers under the name Rainbow International.
Franchise Offer: As a franchisee, approved applicants will perform water restoration services, fire restoration services, smoke and odor clean-up, hard surface, carpet and upholstery cleaning, reconstruction and other related restoration and cleaning services for residential and commercial customers. Franchisees may perform mold remediation services if they purchase the optional mold remediation equipment and training. Franchisees may perform air duct cleaning services if they purchase the optional air duct equipment and training.
Financial Assistance: The franchisor has no obligation to provide franchisees any financing, but it may agree to finance a portion of the initial franchise fee for qualified prospective franchisees under specified terms and conditions. The franchisor’s decision to finance the initial franchise fee will be based, in part, on your credit-worthiness, the collateral franchisees have available to secure the financing and the then-current financing policies. The franchisor does not provide any financing in any transaction in which brokers are involved. The franchisor may periodically agree with 3rd party lenders to make financing available to its qualified franchisees and it may, in its sole discretion, refer franchisees to a 3rd party lender for financing. In addition, the franchisor may offer equipment financing in certain cases.
Training and Assistance: The training requirements may vary depending on the franchisee’s experience and other factors specific to the Business. The franchisor may, but it is not obligated to, provide Phase I Training which may be conducted at a location of its choosing or via webinar/video-conferencing/pre-recorded video at no additional cost to franchisees. If the franchisor requires, franchisees must attend the Phase I Training Webinar with their assigned Franchise Consultant or other designated person prior to participating in other training. At least one owner or designated manager must attend and complete Phase I and Phase II Training to the franchisor’s satisfaction. All Phase II Training occurs at the franchisor’s offices in Waco, Texas or at such other locations as it may designate, or via webinar/video conferencing, at various times during the year, depending on the number of new franchisees entering the franchise system. The Phase I Training will generally last five days but training time may vary depending upon the knowledge, qualifications, and experience of the franchisee. After Phase I Training has been completed, franchisees will attend Phase II training, which generally will last 5 days. Franchisees must also attend, every year, at their expense, the annual training or conference event specified by the franchisor and currently referred to as “Reunion”, and any other training the franchisor designates as required. Optional training is available for air duct, mold remediation, and EPA Lead Safe. The franchisor also offers IICRC ASD, OCT and FSRT training classes for those who are not already certified.
Territory: Franchisees will receive the right to operate a Rainbow International business at a location within the territory that meets the franchisor’s site selection guidelines. The Franchise Agreement will also specify a designated territory that will provide you limited territory protection. The Franchise Agreement does not grant franchisees any territorial rights beyond the territory. The territory will have a minimum population that is generally at least 100,000 and a maximum population that is generally no more than 2,500,000. A larger population may be allowed under certain circumstances (e.g., densely populated urban areas or a high percentage of the prospective territory is impoverished). Provided franchisees are in full compliance with their Franchise Agreement, the franchisor will not operate or grant a franchise for the operation of another Rainbow International franchise with rights to market within the territory during the term of the Franchise Agreement.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. The franchise agreement can be renewed for one additional 10-year term by executing the then-current form of franchise agreement and meeting the other requirements for renewal.
Obligations and Restrictions: If franchisees are an individual, they must directly perform or supervise the operation of the business unless the franchisor consents otherwise. If franchisees are a corporation or other legal entity, direct, on-site supervision must be done by a designated owner who has successfully completed the training program unless the franchisor consents otherwise (“principal owner”). If the franchisor agrees that franchisees need not personally perform or supervise operation of the business, an individual who has successfully completed the training program (“manager”) must directly supervise the franchise, and that individual must be a bona fide manager, as determined by the franchisor. Franchisees must offer and sell only the goods and services that conform to the franchisor’s standards and specifications. Franchisees must offer the goods and/or services that the franchisor designates as required for all franchisees and they may elect to offer other products and/or services only if the franchisor approves them in advance. Franchisees must honor our warranty policies for installations, repairs and replacements as described in the Manuals.
Estimated Number of Units: 405
|Name of Fee||Low||High|
|Initial Franchise Fee||$35,000||$35,000 + $350 per 1,000 additional population over minimum|
|Vehicle||$2,000||$39,000(van) - $43,000 (box truck)|
|Equipment, Supplies and Inventory||$70,000||$78,000|
|Insurance: Annual General liability/Pollution/Workman's Comp/Office||$7,500||$15,000|
|Advertising & Promotional and Local Marketing Spending for Marketing Start-up Phase||$7,500||$20,000|
|Training, Travel, Lodging and Food||$5,500 (All 4 trainings- WRT, Business, ASD, FRST)||$9,000|
|Deposits, Permits & Licenses||$1,675 cert./mold/rebuild||$3,100|
|Additional Funds 6-9 months||$40,000||$70,000|
|ESTIMATED TOTAL||$171,675 (Does not include real estate costs)||$278,100 + any additional franchise fee + any real estate costs|
|Type of Fee||Amount|
|License Fee||4% to 8% of Gross Sales except for “roll-in” sales, sales in TAFS, and Reconstruction Services. In addition, minimum license fees apply.|
|MAP Fee||2% of Gross Sales except for “roll-in” sales and Reconstruction Services. In addition, minimum MAP fees apply.|
|Advertising Cooperative||Not to exceed 8% of Gross Sales.|
|IICRC – Institute of Inspection, Cleaning and Restoration Certification) Exam Fee||$65 fee per exam.|
|EPA Lead Safe Training and Certification Fees||$150|
|Software System Monthly Fees||The then-current monthly support fee currently ranges from $275 to $450 per month depending on the annual sales volume.|
|Call Center Services Monthly Fees||One-time Set Up Fee: $249.00
Tier One: $0.98/Minute;
Tier Two: $0.93/Minute;
Tier Three: $0.88/Minute;
Tier Four: $0.84/Minute.
$50 minimum Monthly Fee.
|Annual Convention (Reunion) Fees||Currently $1,000 or less.|
|Transfer Fee||The greater of (i) $5,000 or (ii) 5% of the sales price.|
|Late Fees||$10 per day.|
|Dishonored Check or ACH Draft||$25|
|Interest||12% on unpaid balances.|
|Failure to Maintain Insurance||The actual cost for insurance premiums and a reasonable fee for expenses the franchisor incurs.|
|Audit||Cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees.|
|Unapproved Suppliers||The actual out-of-pocket costs of inspection or testing.|
|Indemnification and Attorneys’ Fees and Costs||Varies according to loss.|
|Tax Reimbursement||Varies according to tax.|
|Key Accounts/Management Fee||Up to 5% of total Gross Sales related to Key Account work, including Gross Sales that relate to Key Accounts; Gross Sales that are the result of any lead or any agreement developed by the franchisor’s Business Development Department or any similar group that is part of its company or is its designee; Gross Sales for work that is dispatched from any call center operated by the franchisor or its designee; Gross Sales that are audited by the franchisor or its designee according to Key Accounts standards or Gross Sales that otherwise benefit from its Key Accounts activities or management.|
|Franchisor Employee Training Fee||$7,500 or then current amount.|
|Electronic Mail||The first email account is free for the first year and then $25 annually thereafter. Additional email accounts are $25 per account, billed annually, with a one-time $25 setup fee per account.|
|Optional Air Duct Cleaning Training Fee||$2,500|
|Optional Mold Remediation Services Training Fee||$1,095|
The above information has been taken from the FDD of Rainbow International Restoration. Year of FDD: 2016
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