1-800 Water Damage Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
1-800 Water Damage is a restoration franchise handling emergency water damage, drying, and mold remediation for homes and businesses. Franchisees run field crews on emergency mitigation and restoration jobs, often through insurance referrals.
FranchiseVerdict summary · 2026
A 1-800 WATER DAMAGE franchise requires a total initial investment of $143K – $312K, including a $59K – $65K franchise fee and an ongoing 10.0% royalty[2]. Per the 2026 FDD, average unit revenue was $512K[2]. SBA 7(a) loans show a 8.3% charge-off rate across 24 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $143K – $312K
- 56th pct Home Services
- Avg gross sales
- $512K
- Outlet subset12th pct Home Services
- Royalty
- 10.0%
- 53rd pct Home Services
- Units
- 160
- 71st pct Home Services
- SBA charge-off
- 8.3%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Home Services · color = vs category peers
Green = favorable by >10% vs Home Services avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $143K – $312K including a $59K franchise fee, 10.0% ongoing royalty.
- RETURNSAverage unit revenue of $512K/year (median $354K) (reported for a subset of outlets rather than the whole system).
- RISKVerdict B (Above average), verdict score 51/100 (higher is better). 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, 2010–2025).
- FLAG25 units terminated last reporting year (15.6% of the system). Ask existing franchisees why.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- 1-800 WATER DAMAGE International, LLC
- Parent company
- BELFOR Franchise Group, LLC (f/k/a DUCTZ Holdings, LLC)
- Ultimate parent
- ASP BF Intermediate Sub, LLC / BELFOR Holdings, Inc.
- Predecessor
- LLB Group, Inc. (f/k/a The Cure Service Group, Inc.)
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Sheldon Yellen
- Incorporated in
- Delaware
- HQ
- 5405 Data Court, Ann Arbor, MI 48108
- Auditor
- BDO USA, P.C.
- Audited financials
- Franchisor revenue
- $30.1M
- vs $29.5M prior year
Overview
About
- CEO
- Sheldon Yellen
- Headquarters
- MI
- Founded
- 2015
- FDD year
- 2026
- States available
- 33
Can you afford it, and what does the money buy?
Entry cost is about average for a home services franchise.
Source: FDD 2026 · Items 5–7
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 | $74K | $223K |
| Total initial investment | $143K | $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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $143K – $312K
- Middle of category vs category
- Liquid capital req'd
- $10K – $30K
- Top 40% of category vs category
- Franchise fee
- $59K – $65K
- Middle of category vs category
- Royalty
- 10.0%
- tiered · 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 | $6K |
| Total fee load | 12.0% of rev |
What do units actually make?
Average unit sales run 59% below the home services norm.
Reported for a subset of outlets rather than the whole system
Source: FDD 2026 · Item 19
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
$36K
7.0% margin
Unlevered ROIC
14%
EBITDA / total invested capital
Payback
6.9 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one 1-800 WATER DAMAGE unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
14%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Reported for a subset of outlets rather than the whole system
- Avg gross sales
- $512K
- Per unit, per year
- Median gross sales
- $354K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 46 franchisees
- vs category median 32
- Range (low → high)
- $0→$2.2M
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 321 Home Services brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $512K/year in gross sales. Median is $354K — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 2.2x. Reported for a subset of outlets rather than the whole system.
Fee burden
Total ongoing fee load of 12.0% — above the Home Services average of 8.9%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -10.1% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Home Services averages
How 1-800 Water Damage Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 160
- Opened
- 10
- Last reporting year
- Closed
- 0
- Terminated
- 25
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 15.6%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -10.1%
- Net unit change over 3 years
- 3-yr CAGR
- -10.1%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 10
- Closed (3yr)
- 0
- Terminated (3yr)
- 25
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 7
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 4 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.
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
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)
- 91.7%
- 5-yr charge-off
- 50.0%
- Loans approved 2021+
- Active lenders
- 11
- Defaults
- 2
- Typical loan rate
- 7.0%
- avg rate to borrowers
- Franchised industry avg
- 12.9%
- brand beats franchise avg ↓
- Jobs supported
- 135
- 2.2 per loan
- Lender concentration
- 42%
- top lender's share
Borrower mix: 67% went to startups / new businesses, 33% to established operators
Franchise vs independent — in remediation services, franchised businesses charge off at 12.9% vs 10.4% for independents — franchising is associated with 24% higher SBA default risk in this category.
Top lenders financing 1-800 Water Damage franchisees
Showing 3 of 11 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
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.
What could kill this investment?
SBA loans charge off at 8.3% — 48% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Litigation (Item 3)
Two concluded predecessor (LLB Group/Cure Service Group) regulatory matters: a 2006 settlement with the California Corporations Commissioner over unregistered franchise sales, and a 2006 New York Assurance of Discontinuance ($4,750 paid). One franchisor action: 1-800 Water Damage International, LLC v. Restoration Rx, LLC et al. (E.D. Mich. 2:2024-cv-10110), filed Jan 2024 for breach of contract, unjust enrichment, and trademark infringement against a former franchisee; settled confidentially December 2025.
Largest disclosed settlement: $4,750
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · BDO USA, P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 51 / 100 verdict
- 01MINORDeclining unit count (-8.6% YoY) suggests system contraction and franchisee attrition
- 02MINORRegulatory history: LLB Group settled with CA and NY regulators for unregistered sales and failure to disclose prior lawsuits, indicating compliance and disclosure failures
- 03HIGHRecent litigation against franchisee Restoration Rx LLC (settled Dec 2025) signals franchisor-franchisee disputes
- 04MEDHigh initial investment ($59k franchise fee + $71-312k total) relative to undisclosed net income creates ROI uncertainty
- 05MINOR10% 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
What are you signing up for?
Ongoing fees run about 12.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Territory population | 350,000 |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 1 year |
| Non-compete (miles)ℹ | 50 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 15 days |
| Curable defaultsℹ | 16 |
| Mandatory arbitration | Yes |
| Arbitration location | Ann Arbor, Michigan |
| Jury trial waiver | Yes |
| Governing law | MI |
| Litigation count | 3 |
View Item 3 litigation summary
Two concluded predecessor (LLB Group/Cure Service Group) regulatory matters: a 2006 settlement with the California Corporations Commissioner over unregistered franchise sales, and a 2006 New York Assurance of Discontinuance ($4,750 paid). One franchisor action: 1-800 Water Damage International, LLC v. Restoration Rx, LLC et al. (E.D. Mich. 2:2024-cv-10110), filed Jan 2024 for breach of contract, unjust enrichment, and trademark infringement against a former franchisee; settled confidentially December 2025.
Items 10, 11
Training & Operations
- Classroom training
- 112 hrs
- On-the-job training
- 39 hrs
- Training location
- Ann Arbor, MI or virtual
- Ongoing training
- Required
- Time to open
- 4 mo
- From signing to launch
- Franchisor financing
- Offered
- Item 10
- POS system
- WATER DAMAGE Software
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: WATER DAMAGE Software
Item 20 · call current owners
Franchisee Contacts
6 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 $143K – $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 $512K. The median is $354K. Important context: Reported for a subset of outlets rather than the whole system. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the 1-800 WATER DAMAGE FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the 1-800 WATER DAMAGE FDD and qualifies whose outlets they describe.
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 160 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 B-grade franchise with a verdict score of 51 out of 100 (higher is better), 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.
For franchisors
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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.