Rainbow International Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Rainbow International franchise requires a total initial investment of $185K – $352K, including a $60K franchise fee and an ongoing 3.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.1M[2]. SBA 7(a) loans show a 43.2% charge-off rate across 116 loans[1]. FranchiseVerdict grade: D (Below average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $185K – $352K
- 67th pct Cleaning & Ma…
- Avg gross sales
- $1.1M
- 22nd pct Cleaning & Ma…
- Royalty
- 3.0%
- 1st pct Cleaning & Ma…
- Units
- 328
- 78th pct Cleaning & Ma…
- SBA charge-off
- 43.2%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Cleaning & Maintenance · color = vs category peers
Green = favorable by >10% vs Cleaning & Maintenance 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 $185K – $352K including a $60K franchise fee, 3.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.1M/year (median $602K).
- RISKVerdict D (Below average), verdict score 31/100 (higher is better). SBA loan charge-off rate of 43.2% across 116 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Rainbow International SPV LLC
- Parent company
- Neighborly Assetco LLC
- Ultimate parent
- Nest Holdings LP (controlled by investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. / KKR)
- Predecessor
- Rainbow International LLC
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Michael Anthony Davis
- Incorporated in
- Delaware
- HQ
- 1010 North University Parks Drive, Waco, Texas 76707
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $480.8M
- vs $461.7M prior year
Overview
About
Water, fire, and smoke damage restoration, mold remediation, reconstruction, and cleaning services (carpet, upholstery, hard surface) for residential and commercial customers; optional air duct cleaning services available with additional equipment/training purchase.
- CEO
- Michael Anthony Davis
- Headquarters
- Texas
- Founded
- 1980
- FDD year
- 2026
Can you afford it, and what does the money buy?
Entry cost runs 14% below the typical cleaning & maintenance franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $60K | $60K |
| Working capital (3–6 mo) | $40K | $100K |
| Equipment, build-out, other | $85K | $192K |
| Total initial investment | $185K | $352K |
Source: Rainbow International 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
- $185K – $352K
- Bottom third — review vs category
- Liquid capital req'd
- $40K – $100K
- Bottom third — review vs category
- Franchise fee
- $60K – $60K
- Bottom third — review vs category
- Royalty
- 3.0%
- Tiered by sales volume · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 3.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $32 |
| Training fee | $6K |
| Transfer fee | $8K |
| Renewal fee | $5K |
| Inventory (initial) | $41K – $66K |
What do units actually make?
Average unit sales run 31% above the cleaning & maintenance norm.
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Rainbow International until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$339K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Rainbow International unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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
- Avg gross sales
- $1.1M
- Per unit, per year
- Median gross sales
- $602K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- historical gross sales
- Sample size
- 284 outlets
- vs category median 32 · large
- Range (low → high)
- $2K→$14.5M
- Cohort dispersion (min → max)
- Quartile band
- $113K→$2.8M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
Compared against 191 Cleaning & Maintenance 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 $1.1M/year in gross sales. Median is $602K — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 4.0x.
Fee burden
3.0% royalty + 2.0% ad fund — lower than the category average.
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 Cleaning & Maintenance averages
How Rainbow International Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 328
- Opened
- 15
- Last reporting year
- Closed
- 17
- Terminated
- 16
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 5.2%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
3-year detail · Item 20
- Transfers (3yr)
- 11
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 116
- Loan volume
- $31.5M
- Median loan
- $150K
- 50th percentile
- Charge-off rate
- 43.2%
- 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)
- 56.8%
- 5-yr charge-off
- 50.0%
- Loans approved 2021+
- Active lenders
- 23
- Defaults
- 16
- Typical loan rate
- 8.0%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 5629
- Jobs supported
- 738
- 2.4 per loan
- Lender concentration
- 64%
- top lender's share
Borrower mix: 68% went to startups / new businesses, 32% to established operators
Vintage analysis
Rainbow International charge-off rate by loan vintage
Top lenders financing Rainbow International franchisees
Showing 3 of 23 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 Rainbow International's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 5 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 10-year lending trend
Instant access. No subscription.
A 43.2% charge-off rate means roughly 1 in 2 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 43.2% — 170% above the 16.0% national norm, i.e. higher 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
Litigation (Item 3)
Franchisor/Predecessor prevailed in a 2024 judgment (affirmed on appeal March 2026, rehearing pending) against former franchisees Cheyenne Partners/Kitts for breach of non-compete, trade secret misappropriation, and unpaid fees, receiving $541,036 (plus $71,773 to affiliate Grounds Guys) in damages; defendants' counterclaims under Michigan Franchise Investment Law, Sherman Act, fraud, etc. were all denied. Separately, franchisor filed suit in October 2025 against a franchisee (Rapid Response Disaster Services) to collect monies owed.
Largest disclosed settlement: $541,036
Bankruptcy (Item 4)
Disclosed in last 7 years
No bankruptcy involving the Franchisor, its predecessor, or officers. Item 4 discloses bankruptcy proceedings of unrelated portfolio companies controlled by KKR (Marelli Holdings, The Collected Group, Envision Healthcare, Genesis Care, IPI Legacy Liquidation, Cafe Coffee Day) - none involve the Franchisor.
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Item 21 statements are the audited COMBINED financials of Neighborly Assetco LLC and Subsidiaries (franchisor's direct parent and guarantor; franchisor Rainbow International SPV LLC has no standalone audited statements). Reported in $000's; all figures scaled x1000 to whole USD. FY2025 total revenues and income $480,797K = Franchise service fees $353,906K + Sales of products and services $126,891K (other_revenue). Balance sheet reconciles: assets $3,038,726K = liabilities $88,238K + member's equity $2,950,488K. Auditor Ernst & Young LLP. Item 19: Gross Sales are ANNUAL per single franchised unit for the Jan1-Dec31 2025 Reporting Period, based on 284 units in business 12+ months; 100% cohort avg $1,063,348 / median $601,671 / high $14,541,506 / low $1,643; top-quartile avg $2,824,113, bottom-quartile avg $113,109. Financing: direct by franchisor for portion of initial franchise fee; interest rate 9-12% by credit score (12% used as top); repayment term up to 5-9 years by loan size (9 yrs for >$150k). inventory_cost is the combined Equipment, Supplies & Inventory Item 7 line ($41,461-$66,000). training_fee is the low end of the Item 7 training/travel/lodging/food line ($6,400-$10,200); no separate franchisor training fee stated. No POS system cost, audit fee, or radius-based territory disclosed (territory is population-based, 200,000-500,000; priced $400 per 1,000 population). Largest Item 3 amount: $541,036 damages+interest awarded to Predecessor in Cheyenne Partners case (the $2.66M was a denied counterclaim demand).
ⓘ 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
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: Yes
What are you signing up for?
Ongoing fees run about 5.0% 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 | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory sizeℹ | 200,000 to 500,000 population |
| Franchisor can compete | No |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Arbitration location | McLennan County, Texas |
| Litigation count | 2 |
View Item 3 litigation summary
Franchisor/Predecessor prevailed in a 2024 judgment (affirmed on appeal March 2026, rehearing pending) against former franchisees Cheyenne Partners/Kitts for breach of non-compete, trade secret misappropriation, and unpaid fees, receiving $541,036 (plus $71,773 to affiliate Grounds Guys) in damages; defendants' counterclaims under Michigan Franchise Investment Law, Sherman Act, fraud, etc. were all denied. Separately, franchisor filed suit in October 2025 against a franchisee (Rapid Response Disaster Services) to collect monies owed.
Items 10, 11
Training & Operations
- Classroom training
- 205 hrs
- On-the-job training
- 36 hrs
- Training location
- Waco, Texas (franchisor's offices) or virtual/webinar; Field Training at an operating franchised business location
- Ongoing training
- Required
- Field support
- 36 hrs/yr
- On-site visits per year
- Franchisor financing
- Offered
- Item 10
Items 5 & 11
Franchisor Support
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Rainbow International franchise?
The total investment to open a Rainbow International franchise ranges from $185K – $352K, with an initial franchise fee of $60K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Rainbow International franchise owners earn?
According to Item 19 of the Rainbow International FDD, the average gross sales per unit is $1.1M. The median is $602K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Rainbow International 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 Rainbow International FDD and qualifies whose outlets they describe.
What is Rainbow International's franchise failure rate?
Based on SBA 7(a) loan data, Rainbow International has a charge-off rate of 43.2% across 116 loans, meaning 43.2% 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 Rainbow International franchise locations are there?
As of their most recent FDD filing, Rainbow International has 328 total units in the United States, including 328 franchised units and 0 company-owned units. 15 new units were opened in the latest reporting year.
Is Rainbow International a good franchise to buy?
FranchiseVerdict rates Rainbow International as a D-grade franchise with a verdict score of 31 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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.