Rainbow Restoration Franchise Costs, Fees & FDD

Year Business Began: 1980

Franchising Since: 1981

Headquarters: Waco, Texas

Estimated Number of Units: 380

Franchise Description: The franchisor is Rainbow International SPV LLC. The parent company is Dwyer Franchising LLC d/b/a Neighborly (f/k/a The Dwyer Group, Inc.). Franchisees perform water restoration services, fire restoration services, smoke and odor clean-up, hard surface, carpet and upholstery cleaning, reconstruction, mold remediation services, and other related restoration and cleaning services for residential and commercial customers. Franchisees may perform air duct cleaning services if they purchase the optional air duct equipment and training.
Training Overview: 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. 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 11 days. In addition, at a time the franchisor specifies, which is currently within 60 days of attending Phase II Training, franchisees must complete approximately five days of field training at a franchised business selected by the franchisor. Franchisees will be required to be Lead Safe Certified within six months of attending Phase II training. If franchisees elect to perform the optional air duct cleaning services, they must attend an air duct training class and be certified in the required areas. 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.

Territory Granted: Franchisees will receive the right to operate the 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 franchisees with 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 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 Restoration franchise with rights to market within the territory during the term of the Franchise Agreement.

Obligations and Restrictions: If franchisees are individuals, 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 the warranty policies for installations, repairs and replacements as described in the manuals.

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.

Financial Assistance: The franchisor has no obligation to provide franchisees with 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 the franchisee’s creditworthiness, the collateral the franchisee has 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 third party lenders to make financing available to its qualified franchisees and it may, in its sole discretion, refer franchisees to a third party lender for financing. In addition, the franchisor may offer equipment financing in certain cases.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$40,000	$40,000 + $400 per 1,000 additional population over minimum
Vehicle	$10,000	$55,000
Equipment, Supplies & Inventory	$40,461	$65,000
Insurance: Annual General Liability / Pollution / Workman's Comp / Office	$12,000	$18,000
Advertising & Promotional and Local Marketing Spending	$5,000	$30,000
Training, Travel, Lodging & Food (all 4 trainings - technical, business, ASD, 31IRST, OCT, AMRT), Travel, Lodging & Food	$6,400	$10,200
Deposits, Permits & Licenses	$1,675	$3,600
Professional Fees	$2,500	$5,000
Recruiting and Onboarding	$650	$1,000
Lead Safe Equipment, Supplies and Certification	$650	$3,100
Additional Funds – 6-9 mo.	$40,000	$100,000
Real Estate	Varies
ESTIMATED TOTAL*	$159,336 (does not include real estate costs)	$330,900 + any additional franchise fee + any real estate costs

*Additional optional service costs available in FDD.

 
Other Fees

Type of Fee	Amount
License Fee	3% to 8% of gross sales except for “roll-in” sales and reconstruction services. In addition, minimum license fees apply.
Marketing, Advertising and Promotion (MAP) Fee	2% of gross sales except for “roll-in” sales and reconstruction services. In addition, minimum MAP fees apply.
Local Marketing Groups	Not to exceed 3% of gross sales.
IICRC (Institute of Inspection, Cleaning and Restoration Certification) Exam Fee	$450 for ASD training; $100 for OCT training; $250 for AMRT training; and $250 for FSRT training
Business Management Software Monthly Fees	The then-current monthly support fee. Currently $667 per month.
Xactimate Software Monthly Fees	The then-current monthly fee. Currently, $155 (plus applicable taxes) per month for the pro version for each installation and a $5.30 to $31.45 fee for each estimate upload, depending on the size of the estimate.
HelpDesk or HelpDesk Plus Fee	BackOffice HelpDesk: Currently, $200 per month, for 3 hours of services. BackOffice HelpDesk Plus: Currently, $400 per month for 6 hours of services. Additional support hours billed at $75 per hour.
Annual Convention (Reunion) Fees	Currently $1,000 or less.
Transfer Fee	The greater of (i) $7,500 or (ii) 5% of the sales price.
Late Fees (on Business Management Software Monthly Fees and Technology Package Fees)	$25 per month or the maximum amount allowed under the law, whichever is less.
Late Fees	$10 per day.
Dishonored Check or ACH Draft	$50
Interest	12% on unpaid balances.
Audit	Cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees.
Audit Noncompliance Fee	$500 per document (up to $2,500 per audit) that franchisees fail to timely make available to the franchisor in connection with an audit; and/or: cost of audit, if audit is rescheduled due to failure to cooperate with the audit.
Renewal Fee	$5,000
Amendment Fee	$300
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.
Technology Package Monthly Fees	Currently $31 per month; Additional fees for email accounts and QuickBooks Online vary.
Additional Training Fees	Then-current fee; Currently: Up to $3,000.

The above information has been compiled from the FDD of Rainbow International Restoration. Year of FDD: 2025.
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