1-800 WATER DAMAGE Franchise Costs, Fees & FDD

Year Business Began: 2002

Franchising Since: 2005

Headquarters: Ann Arbor, Michigan

Estimated Number of Units: 175

Franchise Description: The franchisor is 1-800 WATER DAMAGE International, LLC. The franchisor’s parent is Belfor Franchise Group, LLC. Franchised businesses offer water damage restoration services, carpet, mold remediation, odor removal, fire, smoke and-related cleaning and remediation products and services utilizing the 1-800 WATER DAMAGE system. Businesses may be eligible to offer reconstruction services in conjunction with the remediation services such as selective drywall removal and installation, floor covering repair and installation, painting, structural repair and installation, finish carpentry, cabinet replacement, roofing, interior finishing, door replacement, electrical, mechanical, plumbing and heating services with required licensing, training, and the franchisor’s prior permission.
Training Overview: The managing owner and, if applicable, designated manager, must successfully complete the Jumpstart Training Program within two months of signing the Franchise Agreement, before attending Business Manager and Technical Operations Training, and before the opening of the 1-800 WATER DAMAGE business. All Jumpstart Training Program activities are to be completed before attending Business Manager and Technical Operations Training and are conducted in the franchisee’s hometown by franchisees with assistance from the franchisor’s home office staff. The Business Manager and Technical Operations Training will last up to 12 days in duration at the franchisor’s headquarters or another location it designates. Upon the franchisee’s successful completion of training, the franchisor may, at its discretion, require a transitional period of approximately 90 days, in which franchisees and or their service technician will have the opportunity to observe a customer service call for customer locations within their territory which exceed their current level of experience and expertise. Also, upon their successful completion of training, franchisees are required to obtain three additional certifications from outside sources, which can be completed online. Franchisees must attend the 1-800 WATER DAMAGE Convention each year it is offered. Franchisees also must attend periodic refresher training courses and conferences, not to exceed one convention/conference per year, at the times and locations the franchisor determines.

Territory Granted: Franchisees will not receive an exclusive territory. Franchisees will operate the business from a location within the territory that the franchisor approves and that will be identified in the Franchise Agreement. The territory will consist of specific zip-code(s) that have been awarded to the franchisee. The size of the territory will generally consist of 350,000 people, and will be defined using political boundaries, such as county or city boundaries, or ZIP code boundaries, which are subject to change. Beginning on the transition date, the business will be required to meet minimum annual gross sales requirements during the term of the agreement. If the business fails to achieve the required minimum gross sales requirement during any consecutive three month period, the franchisor reserves the right to terminate the agreement, elect to establish another franchisee or company owned business in the territory or allow other franchisees, managing operators and/or company owned businesses to advertise, market, solicit and service customers in the territory.

Obligations and Restrictions: Franchisees must devote their full time and personal best efforts to the day-to-day operation of the business. Given the emergency nature of the services provided by the business, franchisees must be available 24 hours a day, seven days a week to respond to service requests. During the term of the agreement, franchisees and their immediate family may not engage in any other business or activity and cannot have an interest in or business relationship with any competitor of 1-800 WATER DAMAGE. Franchisees must offer and provide all of the services that the franchisor periodically requires for 1-800 WATER DAMAGE businesses in the manner it prescribes.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Two additional consecutive renewal terms of 10 years each are available, if requirements are met.

Financial Assistance: If granted the right to open and operate a 1-800 WATER DAMAGE business for a standard franchise, the franchisor may offer franchisees financing for a portion of the initial fee if they meet the qualifications. The franchisor also provides certain information and assists in facilitating SBA loans including 7(a) and 504 loans. The franchisor also provides a discount on the initial franchise fee for one territory to veterans of the U.S. Armed Forces who have been honorably discharged and meet the requirements of the VetFran Program or to qualified first responders.

Estimated Initial Investment

Name of Fee	Low	High
Initial Fee (per territory)	$59,000	$59,000
Initial Package Fee/Marketing and Operations Package/Equipment and Products Package Fee	$60,000	$60,000
Food and Lodging While at Training (not including the cost of transportation)	$1,800	$2,500
Vehicle with Upfitting	$74,900	$115,000
Full Time Service Technician	$6,336	$16,896
Business Telephone Fee	$0	$150
High Speed Internet, Anti-Virus Software and Electronic Mail	$267	$477
Computer System	$0	$2,875
Insurance	$4,500	$8,750
Rent	$3,000	$15,000
Leasehold Improvements	$0	$1,200
Security Deposits/ Utility Deposits	$1,000	$3,000
Licenses and Permits	$0	$600
Additional Funds for the First 3 Months	$10,000	$30,000
ESTIMATED TOTAL (for standard, non-conversion franchise)	$220,803	$315,448

 
Other Fees

Type of Fee	Amount
Royalty	The following percentages of gross sales, but no less than $500 per month: Remediation Services: - 10% of gross sales of up to $499,999.99 per year - 9% of gross sales of more than $500,000 per year - 8% of gross sales of more than $1,000,000 per year - 7% of gross sales of more than $2,000,000 per year or Reconstruction Services: - 10% of gross sales until remediation services gross sales exceed $500,000, then 3% of gross sales.
Transfer Fee	The then current fee.
Transfer - Broker Fee	Actual costs. If franchisees authorize the franchisor to enlist a third-party broker to locate the transferee, there will also be a broker fee, which currently is approximately 10% of the sale price, or $30,000, whichever is higher.
Renewal Fee	The then-current fee, which is presently, $5,900.
Technology Fee	The then current fee, which is presently $500.
Software Fee	The then current fee, which is presently $399.
Brand Marketing Fund Contributions	2% of gross sales.
Late Report Fee	$50 per week that a report is late.
Late Payment Fee	$50 per week.
Non-Sufficient Funds (NSF) Fee	The then current fee, which is presently $50 per NSF.
Administrative Fee	The then-current fee, which is presently $500 per transaction.
Transfer of Corporation Fee	$500
Non-Compliance Fee	The then-current fee, which is presently the greater of $2,500 per transaction or 20% of the total invoice for the job for each incident of out-of-territory conduct, or $5,000 per instance for other non-compliant acts or omissions.
Conventions, Regional Meetings and/or Additional Training	The then current fee, which is presently $1,000 maximum per person to attend the convention or regional meetings and/or additional training.
Convention Non-Attendance Fee	The then current fee, which is presently $1,000.
Collection Fee	The then current fee, which is presently 35% of gross amounts collected on the franchisee’s behalf.
Interest	Lesser of 18% per annum or the maximum permitted by law, whichever is less.
Audit Fee	Cost of audit plus 10% of the total amount of understated gross sales.
Insurance	Cost of insurance; if franchisees fail to maintain insurance as required, the franchisor has the right to procure insurance on their behalf and they must pay the franchisor on demand the costs and premiums it incurs.
Indemnification	Actual costs.
Attorneys’ Fees	Actual attorneys’ fees and costs incurred.
Additional Training	The then current fee, which is presently $50 per person, per day.

The above information has been compiled from the FDD of 1-800 WATER DAMAGE. Year of FDD: 2025.
Franchise Direct's Disclaimer