FDD Talk 2016: The Restoration 1 Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2016 post, you’ll learn the following:

• Section I – Background information on the Restoration 1 franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Restoration 1 franchise, based on Item 7 of the company’s 2016 FDD

• Section III – Presentation and analysis of Restoration 1’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:

• 2015 average, high, and low gross revenues for Restoration 1 franchised businesses that had been in operation for 36+ months, 24-36 months, and 12-24 months, respectively

Section I – Background Information

Andor Kovacs, a native Hungarian, is the founder and CEO of Restoration 1. He moved to the U.S. in 1999 after a romance went bad and he just wanted to get away from it all.

Restoration 1 is actually his second restoration company. He started his first, called Mayer Flood Restoration, in Daytona Beach with a couple of partners. But the partners couldn’t agree on how to run the business and sent Kovacs a fax kicking him out of the company. Needless to say, it was an upsetting experience.

He didn’t let that stop him, though, and soon managed to start up his second attempt, Restoration 1, which he began franchising in 2009. Based in Fort Lauderdale, FL, the company specializes in 24-hour emergency response to provide water extraction, mold remediation, drying, dehumidification, fire and smoke damage restoration, storm-response services, and general maintenance and cleaning services for home and business owners.

Currently, the chain consists of 39 locations, with 27 in the U.S. (one of which is company-owned) and 12 in Canada. Here’s how Restoration 1 is looking to clean up in the emergency mitigation and restoration industry:

A Strong Market

As unfortunate as they may be, there are all kinds of wind, storm, fire and water damage occurring every day in every community across the entire planet, which is why the domestic restoration market is a $60 billion industry and growing. Nearly 1 million people are affected each year by natural disasters, and many of them will need restoration services of some kind.

Recession-Proof Business

Disasters don’t take a holiday when the economy is down and, for the most part, it is insurance companies who are paying for this kind of restoration service, so Restoration 1 often becomes a kind of advocate on behalf of the owner with the insurance companies.

Highly-Trained Franchisees

All franchisees are required to go through extensive training by IICRC, the Institute of Inspection Cleaning and Restoration Certification. It lasts eight weeks, with two weeks each for water, fire, mold, and smoke remediation.

Refreshing Leadership

Kovacs has spoken at length about his take on leadership as quoted in Business News Daily: “A leader places the people around him or her in a position that sets them up for success. This is a difficult task, because a leader must have an in-depth understanding of each individual, such as understanding their career goals and knowing what motivates them. By being committed to helping each person achieve their own personal goals, the leader sets the organization up for greatness. Leaders are [also] good listeners. They listen to verbal and nonverbal cues to understand [what is] occurring in the organization. This allows you to address problems before they become big issues.”

Section II – Estimated Costs

• Please click here for detailed estimates of Restoration 1 franchise costs, based on Item 7 of the company’s 2016 FDD.

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis