In this FDD Talk 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 2021 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Restoration 1 franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned Restoration 1 outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Restoration 1’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 average, median, highest, and lowest gross sales for the 100 franchisees that operated 1 franchised territory during the full 2020 calendar year; 26 franchisees that operated 2 franchised territories during the full 2020 calendar year; 10 franchisees that operated 3 franchised territories during the full 2020 calendar year; 3 franchisees that operated 4 franchised territories during the full 2020 calendar year; and 1 franchisee that operated 5 franchised territories during the full 2020 calendar year

Section I – Background Information

14 Things You Need to Know About the Restoration 1 Franchise

Forms New Umbrella Company to Oversee Brand and Future Acquisitions

1.  In late April 2021, Stellar Brands was named as a new umbrella company uniting Restoration 1, bluefrog Plumbing + Drain, and future acquisitions under one multi-branded service organization. Gary Findley, CEO of Restoration 1, will serve as CEO of Stellar Brands and has also been named operating partner of franchising/home services by MPK Equity Partners, which acquired Restoration 1 and bluefrog Plumbing + Drain in April 2020 to grow the brands to the next level.

2.  According to Findley, “Throughout the pandemic, our emergency services for homes and businesses proved essential and in growing demand. As our expansion of those networks and the support across those systems continue to raise the bar, our goal moving forward is to build a family of brands of complementary services that specialize in like-minded dirty jobs with beautiful results. We will continue to invest in our people and our franchise brands while pursuing additional strategic acquisitions to expand and enhance our capabilities.”

3.  Stellar Brands also plans to add more locations to the roster for Restoration 1 and bluefrog Plumbing + Drain through strong franchise development initiatives. Now combined under the new platform company, each brand offers a strong investment opportunity positioned as a leader in their respective industries.

Launches New, Lower-Cost Franchise Model

4.  In mid-July 2021, Restoration 1 announced that it is now offering a micro-market model for franchise candidates in smaller, more rural markets of 100,000 people or less. Gary Findley, CEO of Restoration 1, said, “Disasters can happen anywhere, and Restoration 1 is prepared and ready to assist all homeowners regardless of location. This new model allows candidates to become a Restoration 1 franchisee in a smaller market at a lower cost of entry, while still receiving the same level of comprehensive training and support as our full franchise partners.”

5.  The micro-market model has an average investment ranging from $67,100 to $142,725, compared to $87,700 to $195,625 for the traditional franchise model. They will benefit from a robust support structure and training program that covers all aspects of the restoration business, from restoration techniques to accounting and back-office tools. Micro-market franchisees are also included in the Restoration 1 National Account program for business referrals. Findley added, “We’re more committed than ever to growing Restoration 1 across the country and helping communities, both big and small, rebound from a disaster.”

6.  Restoration 1 is a franchise that specializes in a wide array of emergency mitigation, restoration, and reconstruction services. The Texas-based company uses advanced technologies and tools to perform restoration for both residential and commercial properties that have been damaged due to water, smoke, fire, mold, storms, and more. There have been 350 agreements awarded throughout the U.S. with plans to expand to more than 500 locations nationwide in the next couple of years.

Adopts Xcelerate as Restoration Job Management Software of Choice

7.  In late June 2021, Xcelerate Software, a leading restoration job management, field documentation, and analytics solutions provider, announced that Restoration 1 is adopting Xcelerate Software as the restoration job management software of choice for managing national claims dispatch, daily job management across 175 franchisee locations, and an integral data and analytics partner for the organization.

8.  Sherry Rose, chief operating officer of Stellar Brands, parent company of Restoration 1, said, “We believe Xcelerate is the right technology partner for Restoration 1. As we were vetting systems, we wanted to find a partner that would help our franchisees grow and scale their businesses. We are moving fast and Xcelerate is the right fit for us.”

9.  Rachel Stewart, CEO of Xcelerate Software, added, “We are very excited to partner with Restoration 1 and their impressive team. Our focus in delivering innovative solutions to the restoration industry is a perfect complement to the Restoration 1 infrastructure and their vision. Restoration 1 has huge goals and so do we. At Xcelerate, we win through our customer’s success, and we are thrilled to equip Restoration 1 with powerful and customized tools to do just that. We are excited to continue providing the restoration industry with modern technology, enhanced business analytics and insights, and effective business management solutions, packaged in a simple solution for field and office staff.”

Company History

10.  Restoration 1 was founded in 2008 by Andor Kovacs in South Florida. Kovacs had years of experience in the restoration industry and even owned his own restoration company. However, he was pushed out of the business by his former business partner and friend. Kovacs started Restoration 1 after winning back some of his previous clients.

11.  Restoration 1 specializes in 24-hour emergency 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.

12.  Kovacs began franchising Restoration 1 in 2010 and the company continued to grow around the United States. In 2016, Gary Findley took over as CEO of Restoration 1 and pushed the company’s expansion even further.

13.  Restoration 1 was acquired by MPK Equity Partners in 2020. Today, Restoration 1 has locations all around the U.S.

Entrepreneur’s Franchise 500

14.  Restoration 1 ranked No. 322 on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Restoration 1 franchise costs, based on Item 7 of the company’s 2021 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Detailed information on Restoration 1’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  119
• Outlets at the End of the Year:  181
• Net Change:  +62

2019

• Outlets at the Start of the Year:  181
• Outlets at the End of the Year:  219
• Net Change:  +38

2020

• Outlets at the Start of the Year:  219
• Outlets at the End of the Year:  252
• Net Change:  +33

Company-Owned

2018

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2020

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• This financial performance representation includes 2020 Gross Sales data for the 140 franchisees described below.

• Some of these franchisees operate multiple franchised territories (each franchised territory is a separate Restoration 1 franchised business). The 140 franchisees whose data has been provided operated a total of 199 franchised territories during 2020.

• Most franchisees that operate multiple franchised territories do not separately report Gross Sales for each franchised territory. Instead, these franchisees report combined Gross Sales from all franchised territories operated by the franchisee. As a result, Restoration 1 has provided Gross Sales data on a “per franchisee” basis (not on a “per franchised territory” basis).

• Because there are no affiliate or company-owned Restoration 1 businesses, the financial performance representation is limited to franchised Restoration 1 businesses.

• As of December 31, 2020, there were a total of 154 franchisees operating a total of 252 franchised territories. This financial performance representation includes the 2020 Gross Sales data for 140 franchisees operating a total of 199 franchised territories during the full 2020 calendar year.

• Restoration 1 excluded data for each of the following franchised territories that were in operation for at least part of the 2020 calendar year:

• 3 franchised territories operated by 3 franchisees that operated during the entire 2020 calendar year but failed to report their 2020 Gross Sales to Restoration 1;

• 40 franchised territories that were not operating during the entire 2020 calendar year because they opened after January 1, 2020; and

• 7 franchised territories that were not operating during the entire 2020 calendar year because they were terminated or permanently closed prior to December 31, 2020.

• The following 5 tables list the 2020 Gross Sales data for the 140 franchisees and 199 franchised territories described above.

• Part 1 includes data for the 100 franchisees that operate 1 franchised territory, Part 2 includes data for the 26 franchisees that operate 2 franchised territories, Part 3 includes data for the 10 franchisees that operate 3 franchised territories, Part 4 includes data for the 3 franchisees that operate 4 franchised territories, and Part 5 includes data for the 1 franchisee that operates 5 franchised territories.

• Parts 1, 2, and 3 include subsets listing the Gross Sales data for the top 25%, top 50%, and top 75% of franchisees as well as the corresponding bottom 25%, bottom 50%, and bottom 75% of franchisees. Parts 4 and 5 do not include these subsets due to the small number of franchisees.

Part 1 – Gross Sales for Franchisees Operating 1 Territory (100 Franchisees)

Top 25%

• Number of Franchises:  25
• Average Gross Sales:  $1,326,206
• Number and Percentage Meeting or Exceeding Average:  7 of 25 (28%)
• Median Gross Sales:  $1,123,171
• Lowest Gross Sales:  $731,614
• Highest Gross Sales:  $3,973,280

Top 50%

• Number of Franchises:  50
• Average Gross Sales:  $962,748
• Number and Percentage Meeting or Exceeding Average:  16 of 50 (32%)
• Median Gross Sales:  $726,532
• Lowest Gross Sales:  $447,757
• Highest Gross Sales:  $3,973,280

Top 75%

• Number of Franchises:  75
• Average Gross Sales:  $753,385
• Number and Percentage Meeting or Exceeding Average:  23 of 75 (31%)
• Median Gross Sales:  $602,324
• Lowest Gross Sales:  $218,795
• Highest Gross Sales:  $3,973,280

Bottom 25%

• Number of Franchises:  25
• Average Gross Sales:  $97,387
• Number and Percentage Meeting or Exceeding Average:  13 of 25 (52%)
• Median Gross Sales:  $114,990
• Lowest Gross Sales:  $5,931
• Highest Gross Sales:  $195,506

Bottom 50%

• Number of Franchises:  50
• Average Gross Sales:  $216,023
• Number and Percentage Meeting or Exceeding Average:  25 of 50 (50%)
• Median Gross Sales:  $207,151
• Lowest Gross Sales:  $5,931
• Highest Gross Sales:  $434,668

Bottom 75%

• Number of Franchises:  75
• Average Gross Sales:  $343,779
• Number and Percentage Meeting or Exceeding Average:  37 of 75 (49%)
• Median Gross Sales:  $348,359
• Lowest Gross Sales:  $5,931
• Highest Gross Sales:  $721,450

Total

• Number of Franchises:  100
• Average Gross Sales:  $589,385
• Number and Percentage Meeting or Exceeding Average:  39 of 100 (39%)
• Median Gross Sales:  $441,212
• Lowest Gross Sales:  $5,931
• Highest Gross Sales:  $3,973,280

Part 2 – Gross Sales for Franchisees Operating 2 Territories (26 Franchisees)

Top 25%

• Number of Franchises:  6
• Average Gross Sales:  $1,822,130
• Number and Percentage Meeting or Exceeding Average:  2 of 6 (33%)
• Median Gross Sales:  $1,058,244
• Lowest Gross Sales:  $892,892
• Highest Gross Sales:  $4,264,545

Top 50%

• Number of Franchises:  13
• Average Gross Sales:  $1,241,535
• Number and Percentage Meeting or Exceeding Average:  4 of 13 (31%)
• Median Gross Sales:  $888,865
• Lowest Gross Sales:  $591,594
• Highest Gross Sales:  $4,264,545

Top 75%

• Number of Franchises:  19
• Average Gross Sales:  $950,464
• Number and Percentage Meeting or Exceeding Average:  4 of 19 (21%)
• Median Gross Sales:  $726,222
• Lowest Gross Sales:  $302,027
• Highest Gross Sales:  $4,264,545

Bottom 25%

• Number of Franchises:  6
• Average Gross Sales:  $203,573
• Number and Percentage Meeting or Exceeding Average:  3 of 6 (50%)
• Median Gross Sales:  $200,297
• Lowest Gross Sales:  $117,823
• Highest Gross Sales:  $286,186

Bottom 50%

• Number of Franchises:  13
• Average Gross Sales:  $314,675
• Number and Percentage Meeting or Exceeding Average:  5 of 13 (38%)
• Median Gross Sales:  $302,027
• Lowest Gross Sales:  $117,823
• Highest Gross Sales:  $564,958

Bottom 75%

• Number of Franchises:  19
• Average Gross Sales:  $464,897
• Number and Percentage Meeting or Exceeding Average:  9 of 19 (47%)
• Median Gross Sales:  $420,404
• Lowest Gross Sales:  $117,823
• Highest Gross Sales:  $888,865

Total

• Number of Franchises:  26
• Average Gross Sales:  $778,105
• Number and Percentage Meeting or Exceeding Average:  9 of 26 (35%)
• Median Gross Sales:  $578,276
• Lowest Gross Sales:  $117,823
• Highest Gross Sales:  $4,264,545

Part 3 – Gross Sales for Franchisees Operating 3 Territories (10 Franchisees)

Top 25%

• Number of Franchises:  2
• Average Gross Sales:  $3,610,657
• Number and Percentage Meeting or Exceeding Average:  1 of 2 (50%)
• Median Gross Sales:  $3,610,657
• Lowest Gross Sales:  $2,952,112
• Highest Gross Sales:  $4,269,202

Top 50%

• Number of Franchises:  5
• Average Gross Sales:  $2,071,640
• Number and Percentage Meeting or Exceeding Average:  4 of 5 (80%)
• Median Gross Sales:  $2,563,185
• Lowest Gross Sales:  $1,113,254
• Highest Gross Sales:  $4,269,202

Top 75%

• Number of Franchises:  8
• Average Gross Sales:  $1,920,774
• Number and Percentage Meeting or Exceeding Average:  4 of 8 (50%)
• Median Gross Sales:  $1,825,868
• Lowest Gross Sales:  $454,210
• Highest Gross Sales:  $4,269,202

Bottom 25%

• Number of Franchises:  2
• Average Gross Sales:  $332,500
• Number and Percentage Meeting or Exceeding Average:  1 of 2 (50%)
• Median Gross Sales:  $332,500
• Lowest Gross Sales:  $224,864
• Highest Gross Sales:  $440,136

Bottom 50%

• Number of Franchises:  5
• Average Gross Sales:  $518,993
• Number and Percentage Meeting or Exceeding Average:  1 of 5 (20%)
• Median Gross Sales:  $454,210
• Lowest Gross Sales:  $224,864
• Highest Gross Sales:  $984,342

Bottom 75%

• Number of Franchises:  8
• Average Gross Sales:  $1,101,236
• Number and Percentage Meeting or Exceeding Average:  3 of 8 (38%)
• Median Gross Sales:  $737,877
• Lowest Gross Sales:  $224,864
• Highest Gross Sales:  $2,563,185

Total

• Number of Franchises:  10
• Average Gross Sales:  $1,603,120
• Number and Percentage Meeting or Exceeding Average:  4 of 10 (40%)
• Median Gross Sales:  $1,048,798
• Lowest Gross Sales:  $224,864
• Highest Gross Sales:  $4,269,202

Part 4 – Gross Sales for Franchisees Operating 4 Territories (3 Franchisees)

Total

• Number of Franchises:  3
• Average Gross Sales:  $717,358
• Number and Percentage Meeting or Exceeding Average:  2 of 3 (67%)
• Median Gross Sales:  $846,328
• Lowest Gross Sales:  $191,458
• Highest Gross Sales:  $1,114,287

Part 5 – Gross Sales for Franchisees Operating 5 Territories (1 Franchisee)

Total

• Number of Franchises:  1
• Average Gross Sales:  $722,294
• Number and Percentage Meeting or Exceeding Average:  1 of 1 (100%)
• Median Gross Sales:  $722,294
• Lowest Gross Sales:  $722,294
• Highest Gross Sales:  $722,294

• “Gross Sales” means the total value of all invoices and monies collected prior to deducting any expenses, taxes, fees, or other costs.

• The dollar figures in the chart reflect revenue collected during the 2020 calendar year, as reported to Restoration 1 by its franchisees. Restoration 1 did not independently verify this information, and it is not audited.

• The data in this financial performance representation is historical and represents the financial results of these outlets.

• The figures in the chart do not reflect the operating costs and expenses that you will incur in operating your Franchised Business, such as royalties, advertising and marketing fees and costs, payroll, vehicle finance or lease payments, insurance, telephone, utilities, and central telephone number fees. These figures also do not include depreciation or amortization or taxes.

• Some outlets have earned this amount. Your individual results may differ. There is no assurance you will earn as much.

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