911 Restoration Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$124,900 - $327,700
Franchise Fee
$18,850
Total US Locations
330
Business Summary
911 Restoration businesses provide emergency response services for property damage. This includes clean-up from fire, water, and mold damage, as well as mold inspections, sanitization services, construction, insulation, carpet cleaning, duct cleaning, and crawl space cleaning. 911 Restoration services both residential and commercial clients who need assistance with property maintenance and emergency situations.
Corporate History
911 Restoration Franchise Inc. was founded as a California corporation on March 15, 2007, and began offering franchises in the same year. The company's affiliate, 911 Restoration Enterprises, Inc., was incorporated in 2003 and operated a business similar to the franchised model from March 2003 until December 2012 when it sold the business to a franchisee. This affiliate has not offered franchises in this or any other line of business.
Financial Overview
Investment Range
$124,900 - $327,700
Franchise Fee (Low)
$18,850
Franchise Fee (High)
$49,000
Royalty %
9%
Marketing %
1%
Equipment Costs (Low)
$37,500
Equipment Costs (High)
$128,000
Working Capital
$75,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The franchisor's financial condition, as shown in the financial statements, raises questions about 911 Restoration Franchise Inc.'s ability to provide ongoing services and support to its franchisees.
Financing Details
911 Restoration Franchise Inc. may offer to finance up to 50% of the Initial Franchise Fee, depending on the franchisee's qualifications. This financed amount must be repaid over 18 months, with interest charged at the prime rate plus 5% to 8%. For those acquiring Additional Franchised Territories, 911 Restoration Franchise Inc. may offer financing for the applicable Initial Franchise Fee with a 50% down payment, and the remaining balance paid in equal monthly installments over an 18-month period, with interest at the prime rate plus 2 points. Franchisees who accept financing will need to sign a Promissory Note, a Personal Guaranty, and a Security Agreement, granting 911 Restoration Franchise Inc. a security interest in the assets of their franchised business.
Performance Metrics
Total US Locations
330
Franchised Units
326
Corporate Units
4
Avg Square Footage
1,300
Franchising Since
2007
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
911 Restoration Franchise Inc. has a history of legal actions, with one case currently pending and ten prior actions. The pending case, filed in August 2021 by an affiliate, alleges breach of contract, trademark infringement, false designation of origin, unfair competition, and false advertising against a former franchisee, and is currently in the discovery phase. Prior actions include two trademark infringement lawsuits against franchisees; one resulted in a judgment for 911 Restoration Franchise Inc. for costs and attorney fees, while the other was settled out of court. There was also an arbitration demand by franchisees against 911 Restoration Franchise Inc. that was terminated due to unpaid deposits. Additionally, 911 Restoration Franchise Inc. faced multiple regulatory actions between 2014 and 2020 in California, Illinois, Maryland, Virginia, and Washington for offering or selling unregistered franchises or using outdated disclosure documents. These regulatory actions led to consent orders, cease and desist agreements, fines, and requirements for 911 Restoration Franchise Inc. to offer rescission to affected franchisees. In most instances, the franchisees did not pursue rescission.
Bankruptcy History
911 Restoration Franchise Inc. has no bankruptcy history to disclose in this section.
Agreement Terms
Initial Term
7 years
Renewal Term
7 years
Renewal Conditions
To renew with 911 Restoration Franchise Inc., franchisees must provide advance notice and fully comply with all obligations under their current Franchise Agreement, including satisfying all monetary debts and maintaining timely payments. They must also meet the then-current standards of the 911 Restoration System, adhere to the requirements of the current Franchise Agreement, and fulfill training certification requirements, including IICRC certifications for specific services. Franchisees must not be in default of any agreement and are required to sign a general release of claims. A renewal fee of $2,500 is payable, up to $7,500 for multiple franchises. Additionally, 911 Restoration Franchise Inc. reserves the right to re-evaluate and potentially modify the franchisee's territory based on current demographics, and the new Franchise Agreement may contain materially different terms and conditions.
Training & Support Program
Franchisor Assistance
911 Restoration Franchise Inc. provides comprehensive assistance to its franchisees. Before opening, 911 Restoration Franchise Inc. reviews and approves the site and lease, loans a copy of its 953-page Confidential Operations Manual, provides an initial training program lasting 14-18 days (which can be in-person, virtual, or hybrid), and offers written specifications for equipment, signs, and supplies from approved vendors. Ongoing support includes additional advisory assistance and training as needed, periodic modifications to the System, provision of proprietary materials and forms, mandatory participation in a Dispatch Center program for call management, and information on approved suppliers. 911 Restoration Franchise Inc. also administers a National Advertising Fund, conducts an annual mandatory conference, and manages Catastrophic Events claims.
Initial Training Hours
220
Training Location
Hybrid: Virtual, Franchisor headquarters in Van Nuys, California, Franchisee's location, Certified Flood House facility, or existing franchisee location
Ongoing Support
After opening, 911 Restoration Franchise Inc. provides additional advisory assistance and training as needed. This includes periodic telephone calls or visits to the franchised business to offer consultation, assess performance, and ensure compliance with System standards. Franchisees and their managerial personnel are required to attend an annual refresher training program, which may also include an annual conference or convention for further training and updates. Additionally, franchisees must participate in 911 Restoration Franchise Inc.'s Dispatch Center programs for call and job distribution.
Franchise Requirements
Ideal Candidate Profile
911 Restoration Franchise Inc. seeks qualified candidates for its franchise programs. This includes individuals or businesses already operating in similar emergency response service fields, with conversion franchisees needing an average annual gross revenue exceeding $400,000 for the prior three years. However, 911 Restoration Franchise Inc. also welcomes candidates with no prior industry experience. Qualified veterans of the United States Armed Services are encouraged to apply and may receive a discount. All franchisees must personally and directly exercise substantial supervision over their franchised business, or if an entity, ensure a majority equity holder or the CEO fulfills this role. Background checks are required for all prospective employees, and individuals with felony convictions cannot be hired.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
Yes
Min Years Experience
3
Operational Details
Location Type
Commercial
Owner Participation
Supervisory
Territory Type
Limited
Territory Size Requirements
911 Restoration Franchise Inc. defines territories based on population and geographic boundaries. Traditional and Conversion franchises are assigned territories with a population of approximately 250,000 to 350,000 people. Micro-Market franchises receive territories with a population ranging from approximately 100,000 to 249,999 people. The exact boundaries are determined using contiguous zip codes, town boundaries, or county boundaries, often depicted on a map, and population data is primarily obtained from the U.S. Census Bureau.
Staffing Notes
911 Restoration Franchise Inc. requires franchisees to maintain a competent, conscientious, and trained staff, adhering to System Standards for staffing levels, qualifications, training, dress, and appearance. Franchisees must conduct background checks on all prospective employees, and individuals with felony convictions cannot be hired. All employees are to wear designated uniforms and present a neat appearance. Furthermore, franchisees must ensure that at least one employee on their staff holds current IICRC certifications in WRT, AMRT, ASD, FSRT, and OCT categories.