Rainbow Restoration Franchise: Average Sales ($889K) vs. Cost ($169K-$325K)

In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Rainbow Restoration franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Rainbow Restoration franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Rainbow Restoration outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Rainbow Restoration franchise opportunity

Section V – Presentation and analysis of Rainbow Restoration’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average, median, highest, and lowest gross sales for the top 10%, top 25%, top 50%, bottom 50%, bottom 25%, bottom 10%, and all 267 Rainbow Restoration franchised businesses that were in operation and reporting sales for the full 12 months of the 2022 calendar year and submitted their gross sales data using the software system

• 2022 average, median, highest, and lowest gross sales for the 267 Rainbow Restoration franchised businesses that were in operation and reporting sales for the full 12 months of the 2022 calendar year and submitted their gross sales data using the software system, grouped by territory size (population: 1 to 249,999, 250,000 to 499,999, 500,000 and up)

Section VI – Key ratios, comparables, computations, and analyses for the Rainbow Restoration franchise opportunity (exclusive content for Platinum subscribers)

Section I – Rainbow Restoration Franchise Costs

• Rainbow Restoration franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $40,000 + $400 per 1,000 additional population over minimum
• Vehicle:  $10,000 to $55,000
• Equipment, Supplies, and Inventory:  $40,461 to $65,000
• Insurance (Annual General Liability/Pollution/Workman’s Comp/Office):  $12,000 to $18,000
• Advertising & Promotional and Local Marketing Spending for Marketing Start-up Phase:  $15,000 to $25,000
• Training, Travel, Lodging, and Food:  $6,400 to $10,200
• Deposits, Permits, and Licenses:  $1,675 to $3,600
• Professional Fees:  $2,500 to $5,000
• Recruiting and Onboarding:  $650 to $1,000
• Lead Safe Equipment, Supplies, and Certification:  $650 to $3,100
• Additional Funds for 6-9 Months:  $40,000 to $100,000
• Real Estate:  amount not specified
• Total Estimated Rainbow Restoration Franchise Costs (does not include real estate costs):  $169,336 to $325,900 + any additional franchise fee + any real estate costs

Section II – Rainbow Restoration’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Rainbow Restoration’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $40,000 + $400 per 1,000 additional population over minimum
• License Fee:  3% to 8% of Gross Sales, except for “roll-in” sales and Reconstruction Services. In addition, minimum license fees apply.
• Marketing, Advertising, and Promotion (MAP) Fee:  2% of Gross Sales, except for “roll-in” sales and Reconstruction Services. In addition, minimum MAP fees apply.
• Local Marketing Groups:  not to exceed 3% of Gross Sales

Section III – Number of Franchised and Company-Owned Rainbow Restoration Outlets

Franchised

2020

• Outlets at the Start of the Year:  294
• Outlets at the End of the Year:  313
• Net Change:  +19

2021

• Outlets at the Start of the Year:  313
• Outlets at the End of the Year:  315
• Net Change:  +2

2022

• Outlets at the Start of the Year:  315
• Outlets at the End of the Year:  314
• Net Change:  -1

Company-Owned

2020

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

2021

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

2022

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

Section IV – News Updates on the Rainbow Restoration Franchise

• Rainbow Restoration Celebrates Carter Borton’s 15 Years of Service with the Company

• Rainbow Restoration Ranked No. 132 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Rainbow Restoration Franchise (Item 19, 2023 FDD)

• The sales figures listed below include average and median Gross Sales derived from historical operating results of the franchised businesses indicated for the time periods covered.

• Rainbow Restoration obtained these sales figures from information provided to it by its franchisees for the period from January 1, 2022 through December 31, 2022 (the “2022 Reporting Period”). Neither Rainbow Restoration nor its independent certified public accountants have audited or verified any of the sales figures reported to it. Franchisees are not required to use generally accepted accounting principles when reporting these figures.

• As of December 31, 2022, there were 314 franchised businesses in operation in the U.S. This Item 19 includes data from 267 franchised businesses, which were in operation and reporting sales for the full 12 months of the 2022 Reporting Period, and they submitted their Gross Sales data using the Software System.

• The information provided in this Item 19 does not include data from (i) 23 franchised businesses that opened during the year 2022 and therefore were not in operation for the entire 2022 Reporting Period, (ii) 6 franchised businesses that were transfers and were not in operation for the entire 2022 Reporting Period, (iii) 4 franchised businesses that did not report to Rainbow Restoration Gross Sales data using its Software System, and (iv) 14 franchised businesses that reported $0 in Gross Sales for the entire 2022 Reporting Period.

• Twenty-four franchised businesses closed during the 2022 fiscal year, and so they did not report data for the entire 2022 Reporting Period and therefore their data is also excluded from this Item 19. Of the 24 franchised businesses that closed during the fiscal year 2022, 1 franchised business closed after being open for less than 12 months.

• “Gross Sales” means the total revenues and receipts from whatever source (whether in the form of cash, credit, agreement to pay, barter, trade, or other consideration) that arise, directly or indirectly, from the operation of – or in connection with – a Rainbow Restoration business whether under any of the Marks or otherwise.

• Gross Sales exclude sales taxes collected from customers and paid to the appropriate taxing authority and any other bona fide refunds, rebates, or discounts that Rainbow Restoration authorizes in writing. Gross Sales also exclude sales from any Excluded Services (as defined in a mutually executed Excluded Services Addendum).

• All of the businesses included in the figures below are generally comparable to the franchise offered by the Disclosure Document. Some of such businesses are “conversions,” meaning that they were operating businesses before they converted to a Rainbow Restoration franchise, including companies that diversified their existing portfolio of businesses by adding Rainbow Restoration’s services to their existing operations. These businesses may have higher sales initially than businesses that were not in operation prior to becoming a Rainbow Restoration franchisee.

• No adjustments, including adjustments for geographic location, have been made to these reported sales. In addition, the information in this report is based on sales in one 52-week period in 2022. This report does not include information about previous periods or try to estimate or predict what may occur in any future periods.

• Also, because these are Gross Sales results only, no costs or expenses are taken into account.

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

Part 1 – Average and Median Gross Sales in 2022 Attained by Franchised Businesses in Business 12 Months or More and Reporting Using Rainbow Restoration’s Software System

Top 10%

• High Gross Sales:  $10,041,994
• Low Gross Sales:  $1,895,270
• Median Gross Sales:  $3,018,118
• Average Gross Sales:  $3,551,679
• Number in This Group:  27
• Number and Percent in Group That Attained the Average or Greater:  7 / 26%

Top 25%

• High Gross Sales:  $10,041,994
• Low Gross Sales:  $1,104,358
• Median Gross Sales:  $1,626,552
• Average Gross Sales:  $2,257,244
• Number in This Group:  67
• Number and Percent in Group That Attained the Average or Greater:  18 / 27%

Top 50%

• High Gross Sales:  $10,041,994
• Low Gross Sales:  $571,299
• Median Gross Sales:  $1,101,084
• Average Gross Sales:  $1,526,074
• Number in This Group:  134
• Number and Percent in Group That Attained the Average or Greater:  42 / 31%

Bottom 50%

• High Gross Sales:  $567,184
• Low Gross Sales:  $4,194
• Median Gross Sales:  $249,820
• Average Gross Sales:  $257,659
• Number in This Group:  133
• Number and Percent in Group That Attained the Average or Greater:  64 / 48%

Bottom 25%

• High Gross Sales:  $250,379
• Low Gross Sales:  $4,194
• Median Gross Sales:  $127,457
• Average Gross Sales:  $125,398
• Number in This Group:  67
• Number and Percent in Group That Attained the Average or Greater:  35 / 52%

Bottom 10%

• High Gross Sales:  $108,449
• Low Gross Sales:  $4,194
• Median Gross Sales:  $54,920
• Average Gross Sales:  $57,495
• Number in This Group:  27
• Number and Percent in Group That Attained the Average or Greater:  14 / 52%

100%

• High Gross Sales:  $10,041,994
• Low Gross Sales:  $4,194
• Median Gross Sales:  $567,184
• Average Gross Sales:  $889,491
• Number in This Group:  267
• Number and Percent in Group That Attained the Average or Greater:  91 / 34%

Part 2 – Average and Median Gross Sales in 2022 Attained by Franchised Businesses in Business 12 Months or More and Reporting Using Rainbow Restoration’s Software System – Based on Territory Size

Territory Size (in terms of population): 1 to 249,999

• High Gross Sales:  $3,303,179
• Low Gross Sales:  $4,566
• Median Gross Sales:  $362,900
• Average Gross Sales:  $556,307
• Number in This Group:  95
• Number and Percent in Group That Attained the Average or Greater:  32 / 34%

Territory Size (in terms of population): 250,000 to 499,999

• High Gross Sales:  $2,604,645
• Low Gross Sales:  $4,194
• Median Gross Sales:  $438,600
• Average Gross Sales:  $621,791
• Number in This Group:  91
• Number and Percent in Group That Attained the Average or Greater:  36 / 40%

Territory Size (in terms of population): 500,000 and up

• High Gross Sales:  $10,041,993
• Low Gross Sales:  $33,531
• Median Gross Sales:  $971,655
• Average Gross Sales:  $1,581,012
• Number in This Group:  81
• Number and Percent in Group That Attained the Average or Greater:  28 / 35%

Section VI – Rainbow Restoration Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️

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