Rainbow Restoration Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Rainbow Restoration is a property-restoration and cleaning franchise handling water and fire damage, mold remediation, and carpet cleaning. Franchisees run field crews on emergency mitigation and restoration, often through insurance referrals.
FranchiseVerdict summary · 2026
A Rainbow Restoration franchise requires a total initial investment of $185K – $352K, including a $60K franchise fee and an ongoing 8.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.1M[2]. SBA 7(a) loans show a 12.3% charge-off rate across 203 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $185K – $352K
- 68th pct Cleaning & Ma…
- Avg gross sales
- $1.1M
- 29th pct Cleaning & Ma…
- Royalty
- 8.0%
- 42nd pct Cleaning & Ma…
- Units
- 328
- 79th pct Cleaning & Ma…
- SBA charge-off
- 12.3%
- % 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, 8.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.1M/year (median $602K).
- RISKVerdict A (Strongest tier), verdict score 65/100 (higher is better). SBA loan charge-off rate of 12.3% across 203 loans (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
- Neighborly (Dwyer Franchising LLC d/b/a Neighborly); controlled by KKR investment funds
- 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
- $461.7M
- vs $480.8M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- is Rainbow International
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Michael Anthony Davis
- Headquarters
- TX
- Founded
- 1980
- FDD year
- 2026
- States available
- 45
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
Full Item 7 breakdown12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $60K | $60K | |
| Vehicle | $10K | $55K | |
| Equipment, Supplies & Inventory | $41K | $66K | |
| Insurance (General liability/pollution/workman's comp/office) | $12K | $18K | |
| Advertising & Promotional and Local Marketing Spending | $10K | $30K | |
| Training (Technical, Business, ASD, IRST, OCT, AMRT), Travel, Lodging & Food | $6K | $10K | |
| Deposits, Permits & Licenses | $2K | $4K | |
| Professional Fees | $3K | $5K | |
| Recruiting and Onboarding | $650 | $1K | |
| Lead Safe equipment, supplies and certification | $650 | $3K | |
| Additional Funds - 6 to 9 Months | $40K | $100K | |
| Real Estate | — | — | |
| Total initial investment | $185K | $352K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
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
- 8.0%
- Gross Sales · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 5.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 8.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $1K |
| Transfer fee | $8K |
| Renewal fee | $5K |
| Total fee load | 5.0% of rev |
A 5.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 18% above the cleaning & maintenance norm.
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
$96K
9.0% margin
Unlevered ROIC
28%
EBITDA / total invested capital
Payback
3.5 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 Rainbow Restoration unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
28%
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%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Rainbow Restoration units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$425K
on $2.1M purchase
Total debt
$1.7M
SBA $1.1M + senior + seller note
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 by percentile cohort (Part I) and by territory size (Part II)
- 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
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 192 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
Total ongoing fee load of 5.0% — below the Cleaning & Maintenance average of 9.7%.
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 roughly stable (+4.8% 3-year CAGR) with 328 units.
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 Restoration 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
- Net growth (3-yr)
- -0.6%
- Net unit change over 3 years
- 3-yr CAGR
- +4.8%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 15
- Closed (3yr)
- 0
- Terminated (3yr)
- 16
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 11
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 23
- Franchisor's next-year forecast
- Transfer rate
- 3.5%
- Owners selling to other franchisees
- Termination rate
- 4.5%
- Franchisor-initiated terminations
- Ceased ops
- 5.1%
- Units that stopped operating
Last reporting year only, multi-year history not disclosed in this brand's FDD.
Item 20 · 14 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
- 203
- Loan volume
- $51.4M
- Median loan
- $253K
- average
- Charge-off rate
- 12.3%
- 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)
- N/A
- 5-yr charge-off
- 41.4%
- Loans approved 2021+
- Active lenders
- 51
- Defaults
- 25
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
SBA loans charge off at 12.3% — 23% 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
Essentially clean: 2 routine franchisor-vs-franchisee suits (won ~$541K non-compete case on appeal; a trade-secret suit) normal for a 328-unit service system. Disclosed bankruptcies are unrelated KKR portfolio companies, not the franchisor. Financials are parent-level (net worth $2.95B) with positive net income; Item 19 disclosed, avg sales $1,063,348.
Litigation (Item 3)
3 case reference(s): 1 pending, 0 settled.
Largest disclosed settlement: $3
Bankruptcy (Item 4)
Disclosed in last 7 years
bankruptcy proceeding) and not involving the Franchisor: Marelli Holdings Co. Ltd. On June 11, 2025, Marelli Holdings Co. Ltd, a global technology partner to the automotive industry, filed for Chapter 11 proceedings in the United States Bankruptcy Court for the District of Delaware. In re. The Colle
Audited financials (Item 21)
Yes · Ernst & Young LLP
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: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 65 / 100 verdict
- 01HIGH2 routine litigation matters (franchisor mostly prevailing)
- 02MINORBankruptcies are unrelated KKR affiliates, not franchisor - low weight
- 03MINORParent-level financials (net worth $2.95B), don't penalize
- 04MED328 units, 4.8% growth, low turnover 5.2%, Item 19 disclosed
Severity inferred from the FDD text · not a regulatory classification
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 | Population |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Texas |
| Litigation count | 3 |
View Item 3 litigation summary
3 case reference(s): 1 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 205 hrs
- On-the-job training
- 36 hrs
- Training location
- On-site and corporate
- Franchisor financing
- Offered
- Item 10
- POS system
- FUSION, LUXOR, and ProfileGorilla PreQual+
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: FUSION, LUXOR, and ProfileGorilla PreQual+
Item 20 · call current owners
Franchisee Contacts
26 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Rainbow Restoration · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Rainbow Restoration franchise?
The total investment to open a Rainbow Restoration 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 Restoration franchise owners earn?
According to Item 19 of the Rainbow Restoration 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 Restoration 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 Restoration FDD and qualifies whose outlets they describe.
What is Rainbow Restoration's franchise failure rate?
Based on SBA 7(a) loan data, Rainbow Restoration has a charge-off rate of 12.3% across 203 loans, meaning 12.3% 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 Rainbow Restoration franchise locations are there?
As of their most recent FDD filing, Rainbow Restoration 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 Restoration a good franchise to buy?
FranchiseVerdict rates Rainbow Restoration as a A-grade franchise with a verdict score of 65 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
Are you the franchisor?
If you represent Rainbow Restoration, you can request corrections or provide updated information.
Other Cleaning & Maintenance franchises
Compare similar franchise opportunities in the Cleaning & Maintenance category
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.