Restoration 1 Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$126,525 - $309,500
Franchise Fee
$13,500
Total US Locations
298
Business Summary
Restoration 1 offers franchises for businesses that provide residential and commercial water, fire, smoke, and mold restoration services. Restoration 1 Businesses operate under the brand name 'Restoration 1®' and may also offer additional authorized services and products.
Corporate History
Restoration 1 Franchise Holding, LLC, a Delaware limited liability company, is the current franchisor. The brand 'Restoration 1®' began offering franchises in January 2010 through a predecessor company, also named Restoration 1 Franchise Holding, LLC. In April 2020, the current franchisor merged with this predecessor, continuing the franchising operations since May 2020. Restoration 1 operates as a wholly owned subsidiary of Stellar Brands, LLC.
Financial Overview
Investment Range
$126,525 - $309,500
Franchise Fee (Low)
$13,500
Franchise Fee (High)
$64,400
Royalty %
7%
Equipment Costs (Low)
$3,400
Equipment Costs (High)
$54,250
Working Capital
$57,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for Restoration 1 Franchise Holding, LLC for the years ended December 31, 2024 and 2023 have been audited and received an unqualified opinion from independent auditors. This means the auditors found that the financial statements present the company's financial position fairly in all material respects, in accordance with generally accepted accounting principles. The auditors did not identify any conditions or events that raise substantial doubt about Restoration 1's ability to continue as a going concern for a reasonable period of time.
Financing Details
Restoration 1 does not offer any direct or indirect financing to its franchisees. Additionally, Restoration 1 does not guarantee any notes, leases, or other obligations that franchisees may incur to finance their business.
Performance Metrics
Total US Locations
298
Franchised Units
298
Corporate Units
0
Avg Square Footage
150
Franchising Since
2010
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
6
Litigation Summary
Restoration 1 has faced several legal actions. One ongoing lawsuit, filed in March 2023 against a former franchisee, Coast 2 Coast Restoration LLC, and its personal guarantors, alleges trademark infringement and breach of contract due to continued operation of competitive businesses using Restoration 1's marks after termination. The former franchisee has counterclaimed, alleging wrongful termination. This case went to a bench trial that concluded in March 2025, and a decision is pending. Historically, Restoration 1 was involved in several arbitrations with former franchisees, all filed between 2015 and 2016. These cases included claims for fraudulent and deceptive trade practices, misrepresentations in disclosure documents, and violations of state franchise laws. In each of these cases (Aaron Cline, Leo Reyes, Abraham Newman, and Gregory Wayne Stephens), the parties ultimately settled, leading to the termination of the franchise agreements and mutual releases. In 2014, Restoration 1 entered into a Settlement Order with the Commonwealth of Virginia's State Corporation Commission. This was based on an allegation that Restoration 1 offered and sold a franchise in Virginia after its registration had lapsed. Restoration 1 neither admitted nor denied the allegations but agreed to pay $1,000 for investigation costs, attend franchise sales compliance training, and commit not to violate the Virginia Retail Franchise Act in the future.
Bankruptcy History
Restoration 1 has no bankruptcy information required to be disclosed in this item. This means that neither Restoration 1, its parents, predecessors, affiliates, nor any of its key management personnel have been involved in any reportable bankruptcy proceedings.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Restoration 1 franchise agreement, franchisees must meet several conditions. These include having substantially complied with their existing Franchise Agreement and all other agreements with Restoration 1 and its affiliates throughout the term. They must also have updated their Franchised Business Office, service vehicle(s), and equipment to meet Restoration 1's then-current standards for new franchisees. All monetary obligations owed to Restoration 1 and its affiliates must be satisfied and have been met in a timely manner. The franchisee must not be in default of any provision of their agreements. They need to provide written notice of their intent to renew between nine and twelve months before the current term ends. Additionally, they must sign Restoration 1's then-current Franchise Agreement and associated agreements, which may have materially different terms including higher Royalty Fees or Brand Fund Contributions, or a modified Market Territory. Franchisees are also required to reimburse Restoration 1 for renewal processing costs, attend additional training if requested, satisfy current qualifications for new franchisees, and sign a general release of claims against Restoration 1 and its affiliates, where permitted by state law. Renewal is also contingent on Restoration 1 offering franchises in the franchisee's Market Territory at the time of renewal.
Training & Support Program
Franchisor Assistance
Restoration 1 provides various forms of assistance to its franchisees. Before opening, Restoration 1 offers System Standards for the Franchised Business Office, service vehicles, and all necessary tools and equipment. It also provides a Training Program for the franchisee and up to three additional key personnel. Franchisees also gain access to the Confidential Operations Manual. Restoration 1 assists with site selection by approving or rejecting proposed office locations within 90 days of the agreement, based on criteria like visibility, size, and demographics. After opening, Restoration 1 continues to indemnify franchisees if their right to use the Marks is challenged, provided the franchisee has complied with the agreement. Franchisees maintain access to and modifications of the Confidential Operations Manual. If a Brand Fund is established, Restoration 1 administers it. Restoration 1 also establishes prices for National Account Clients and products sold through its Franchise System Website. Restoration 1 may also provide advice on business operations, updates through manuals, bulletins, newsletters, and electronic meetings. Additional training may be requested by franchisees or required by Restoration 1 if performance is unsatisfactory or if franchisees miss annual meetings, with associated fees.
Initial Training Hours
118
Training Location
Dallas, Texas, or virtual
Ongoing Support
After opening their business, Restoration 1 franchisees receive several forms of ongoing support. They continue to have access to and receive modifications for the Confidential Operations Manual. If a Brand Fund is established, Restoration 1 administers it. Restoration 1 also sets prices for services provided to National Account Clients and for products sold through any Franchise System Website. Restoration 1 may offer periodic advice regarding the franchised business through updates to the Confidential Operations Manual, written bulletins, newsletters, telephone or electronic meetings, and consultations at its offices. Franchisees may request additional training for themselves or their personnel, which may incur a fee. Restoration 1 may also require franchisees and their key personnel to attend various training courses, trade shows, ongoing education programs, and annual or regional meetings, for which meeting or conference fees may apply. If Restoration 1 determines a franchisee is not operating in full compliance with System Standards, it may require additional training for Key Personnel, with associated fees and expenses.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
Yes
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Staff Count
3
Territory Size Requirements
Restoration 1 defines its standard Market Territories based on population, ranging from 250,000 to 275,000 people. For existing franchisees, Restoration 1 may also offer add-on micro Market Territories, which have a population of 75,000 to 200,000, provided the new micro territory is contiguous with their existing one. The specific geographic boundaries for these territories can be defined using ZIP codes, political boundaries, geographic features, or roads, with population data sourced from Restoration 1's territory mapping program, GbBIS.
Staffing Notes
Restoration 1 requires franchisees to hire and train personnel necessary for their business operations. While franchisees are solely responsible for training their employees, contractors, and other personnel at their own expense, Restoration 1 may require disclosure of training curricula and materials, or set System Standards for training, including requiring third-party training or certification. Restoration 1 recommends engaging at least one business development manager or technician, the cost of which is factored into the initial working capital estimate. The Confidential Operations Manual outlines specific job responsibilities and ideal employee profiles for roles such as Operations Manager, Business Development Manager, Certified Service Technician, and Administrator, implying a typical team structure that includes these key positions.