Restoration 1 Franchise Costs, Fees & FDD

Year Business Began: 2008

Franchising Since: 2009

Headquarters: Dallas, Texas

Estimated Number of Units: 300

Franchise Description: The franchisor is Restoration 1 Franchise Holding, LLC. The parent company is Stellar Brands. The franchisor offers franchises for businesses providing residential and commercial water, fire, smoke, and mold restoration services and additional services and products under the name “Restoration 1”.
Training Overview: The franchisor will provide a training program on the material aspects of operating a Restoration 1 business to the franchisee (or the franchise owners) and up to three additional persons (one of which must be the designated owner or designated manager, as applicable) (together, called the “key personnel”). The training program is offered on an as needed basis at the franchisor’s training location in Dallas, Texas, or another location it designates, which may include conducting any portion of the training program virtually. The franchisor may require franchisees and their key personnel and/or other personnel to attend various training courses, trade shows, ongoing education programs, and/or webinars at the times and locations designated by the franchisor, which may be offered by the franchisor or its affiliates, vendors, or other designees. In addition to these training courses, programs, and events, the franchisor may additionally require franchisees and/or any of their key personnel to attend periodic meetings of franchise owners or managers. Franchisees must obtain all IICRC certifications for the services they provide from their Franchised Business before they begin to provide those services. The franchisor may mandate a designated and exclusive vendor for any such certification programs.

Territory Granted: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. Franchisees and the franchisor will agree on a geographic area to act as the market territory. The market territory may be defined by ZIP codes, political boundaries, geographic boundaries, or roads. A standard market territory will have a population of 250,000 to 275,000.

Obligations and Restrictions: If franchisees operate their Franchised Business through a legal entity, they must identify one of the owners who is a natural person with at least a 10% direct or indirect ownership interest and voting power in that entity (the “designated owner”). The franchisor must approve the person that will act as the designated owner. Franchisees must obtain the franchisor’s prior written approval of any subcontractor that will be used to provide services of any kind for the franchised business. Franchisees must provide or offer for sale or use at the franchised business all of the services, products, supplies, equipment, and other items that the franchisor periodically designates.

Term of Agreement and Renewal: The length of the initial term is 10 years. However, the right to offer reconstruction services may not be the same as the franchise term because these services are optional and either party may terminate the Reconstruction Services Addendum any time with 60 days’ notice. Franchisees may renew for one successive 10-year term if they satisfy the conditions.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease, or obligation. The franchisor offers a discounted franchise fee to qualifying veterans who have received an honorable discharge from any branch of the United States military before applying to become a franchisee.

Estimated Initial Investment

Name of Fee	Low	High
Franchise Fee	$59,900	$64,400
Technology Fee	$2,100	$2,100
Real Estate / Rent	$0	$1,000
Renovations and Improvement	$250	$500
Encircle Software	$225	$2,500
Office Equipment and Supplies	$300	$1,000
Service Tools and Equipment	$1,200	$48,000
Uniforms	$250	$650
Technology Systems Components	$1,650	$4,750
Training Expenses for 3 People	$4,700	$14,100
Vehicle	$4,500	$70,000
Marketing Materials	$500	$2,500
Insurance	$7,000	$12,000
Licenses & Permits	$250	$5,000
Certifications	$2,200	$4,000
Professional Fees	$1,500	$2,000
Additional Funds (3 months)	$40,000	$75,000
ESTIMATED TOTAL	$126,525	$309,500

 
Other Fees

Type of Fee	Amount
Royalty Fee	Greater of: (a) 7% of collected gross revenue (or 3.5% for a conversion franchise during its initial 6 months) (other than construction gross revenue); or (b) the minimum royalty fee.
Reconstruction Royalty Fees	2% of construction gross revenues.
Technology Fee	$525 / month (subject to change).
Additional User Accounts	$10 to $25 / month / user (subject to change).
Brand Fund Contribution	Not currently charged (subject to change up to 2% of collected gross revenue, excluding construction gross revenue).
Reconstruction Brand Fund Contribution	Not currently charged (subject to change up to 0.5% of construction gross revenues).
Local Advertising Expenditure	Not currently charged (subject to change up to 2% of collected gross revenue).
Marketing in Another Market Territory	Greater of: (i) $5,000 per incident, or (ii) 100% of the job value for any work obtained outside of the franchisee’s market territory.
Audit Expenses	Cost of audit.
Approval of Products or Suppliers	All costs and expenses associated with the evaluation.
Insurance Policies	Payable if the franchisees fails or refuses to obtain and maintain the insurance the franchisor specifies and it elects to obtain coverage for the franchisee.
Service Warranties	The franchisor’s cost of honoring any service warranty.
Service Warranty Deposit	Varies based on the amount of outstanding service warranties.
Transfer Fee	$5,000
Renewal Fee	The franchisor’s direct costs and expenses.
Additional Training Fee	$1,000 per day per trainee (subject to change), plus expenses.
Conference Registration Fee	$399 per person (subject to change up to $1,000 per person).
National Account Dispatch and Claims Management Fees	No dispatch fees currently charged (subject to change). Claims management fee of 5% of the invoiced amount (subject to change).
Cost of Enforcement	All costs including reasonable attorneys’ fees.
Interest on Past Due Amounts	Lesser of 1.5% per month or the highest rate allowed by law.
Vendor Cost Reimbursement	Reimbursement all amounts, plus the franchisor’s costs and expenses.
Customer Refund	Reimbursement all amounts, plus the franchisor’s costs and expenses.
Reimbursement for Taxes	Reimbursement all amounts, plus the franchisor’s costs and expenses.
Indemnification	All costs including reasonable attorneys’ fees.
Interim Operations Fee	5% of collected gross revenue (subject to change), plus costs and expenses.
Final Payment	Accounts receivable multiplied by 70%, multiplied by combined rate of the franchisee’s royalty fees and brand fund contributions as of termination or expiration.
Lost Revenue Damages	Will vary under circumstances.

The above information has been compiled from the FDD of Restoration 1. Year of FDD: 2025.
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