1-800 Water DamageFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A 1-800 WATER DAMAGE franchise requires a total initial investment of $71K – $312K, including a $59K franchise fee and an ongoing 10.0% royalty[2]. Per the 2026 FDD, average unit revenue was $770K[2]. SBA 7(a) loans show a 8.3% charge-off rate across 24 loans[1]. Verdict grade: C. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $71K – $312K
- 18th pct Cleaning & Ma…
- Avg gross sales
- $770K
- 30th pct Cleaning & Ma…
- Royalty
- 10.0%
- 50th pct Cleaning & Ma…
- Units
- 160
- 70th pct Cleaning & Ma…
- SBA default
- 8.3%
- system-wide median varies by category
Quick verdict · Cleaning & Maintenance · color = vs category peers
Green = >15% above Cleaning & Maintenance avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Each dollar invested generates 4.0x in gross revenue, well above the typical 1.5-2.5x range.
Franchised units fell from 178 to 160 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $71K – $312K including a $59K franchise fee, 10.0% ongoing royalty.
- Average unit revenue of $770K/year (median $482K).
- Verdict C (Average) with a risk score of 65/100. SBA loan charge-off rate of 8.3% across 24 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System contracting at -10.1% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- 1-800 WATER DAMAGE International, LLC
- Parent company
- BELFOR Franchise Group, LLC
- Incorporated in
- DE
- HQ
- 5405 Data Court, Ann Arbor, Michigan 48108
- Auditor
- BDO USA, P.C.
- Audited financials
- Franchisor revenue
- $29.5M
- vs $30.1M prior year
Overview
About
1-800 WATER DAMAGE franchisees operate emergency water damage mitigation and restoration services, responding to residential and commercial clients experiencing flooding, burst pipes, and water emergencies. Daily operations include emergency dispatch coordination, water extraction, drying, mold remediation, and customer billing management, often with referrals from insurance companies and property managers.
- CEO
- Sheldon Yellen
- Headquarters
- MI
- Founded
- 2015
- FDD year
- 2026
- States available
- 33
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $59K | $59K |
| Working capital (3–6 mo) | $10K | $30K |
| Equipment, build-out, other | $2K | $223K |
| Total initial investment | $71K | $312K |
Source: 1-800 WATER DAMAGE 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$54K
7.0% margin
Unlevered ROIC
25%
EBITDA / total invested capital
Payback
3.9 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $71K – $312K
- Better than avg vs category
- Liquid capital req'd
- $10K – $30K
- Better than avg vs category
- Franchise fee
- $24K – $59K
- Near category avg vs category
- Royalty
- 10.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 12.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 10.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $750 |
| Transfer fee | $10K |
| Renewal fee | $0 |
| Total fee load | 12.0% of rev |
Financial Performance
- Avg gross sales
- $770K
- Per unit, per year
- Median gross sales
- $482K
- Item 19 type
- gross_sales
- Sample size
- 78 units
- vs category median 31 · large
- Range (low → high)
- $0→$4.4M
- Cohort dispersion (min → max)
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 204 Cleaning & Maintenance brands
Revenue is 4.0x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
vs Cleaning & Maintenance averages
How 1-800 Water Damage Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 160
- Opened
- 10
- Last reporting year
- Closed
- 25
- Turnover rate
- 15.6%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -8.6%
- Net unit change last year
- 3-yr CAGR
- -10.1%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 7
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 17 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 24
- Loan volume
- $6.1M
- Median loan
- $150K
- 50th percentile
- Charge-off rate
- 8.3%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 80.0%
- 5-yr charge-off
- 50.0%
- Loans approved 2021+
- Active lenders
- 11
- Defaults
- 2
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into 1-800 Water Damage's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 7-year lending trend
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Declining franchise system with regulatory baggage, no profit transparency, and recent litigation despite solid gross revenue—presents elevated risk for new franchisees entering a contracting network.
Audited financials (Item 21)
Yes · BDO USA, P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 65 / 100 rating
- 01MINORDeclining unit count (-8.6% YoY) suggests system contraction and franchisee attrition
- 02MINORNo Item 19 (Average Net Income) disclosure limits transparency on actual profitability despite $770k avg revenue
- 03MINORRegulatory history: LLB Group settled with CA and NY regulators for unregistered sales and failure to disclose prior lawsuits, indicating compliance and disclosure failures
- 04HIGHRecent litigation against franchisee Restoration Rx LLC (settled Dec 2025) signals franchisor-franchisee disputes
- 05MEDHigh initial investment ($59k franchise fee + $71-312k total) relative to undisclosed net income creates ROI uncertainty
- 06MINOR10% royalty on first tier is aggressive for a service business with thin margins; reconstruction at 3% suggests potential royalty disputes or tiered performance issues
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | ZIP codes |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 1.5 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Michigan |
| Litigation count | 3 |
Items 10, 11
Training & Operations
- Classroom training
- 112 hrs
- On-the-job training
- 39 hrs
- POS system
- WATER DAMAGE Software
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: WATER DAMAGE Software
Item 20 · call current owners
Franchisee Contacts
21 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
1-800 WATER DAMAGE · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a 1-800 WATER DAMAGE franchise?
The total investment to open a 1-800 WATER DAMAGE franchise ranges from $71K – $312K, with an initial franchise fee of $59K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do 1-800 WATER DAMAGE franchise owners earn?
According to Item 19 of the 1-800 WATER DAMAGE FDD, the average gross sales per unit is $770K. The median is $482K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is 1-800 WATER DAMAGE's franchise failure rate?
Based on SBA 7(a) loan data, 1-800 WATER DAMAGE has a charge-off rate of 8.3% across 24 loans, meaning 8.3% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many 1-800 WATER DAMAGE franchise locations are there?
As of their most recent FDD filing, 1-800 WATER DAMAGE has 160 total units in the United States, including 178 franchised units and 0 company-owned units. 10 new units were opened in the latest reporting year.
Is 1-800 WATER DAMAGE a good franchise to buy?
FranchiseVerdict rates 1-800 WATER DAMAGE as a C-grade franchise with a risk score of 65 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.