Rainbow Restoration Franchise Cost, Revenue & Review 2026
- Investment
- $185K – $352K
- Disclosed sales
- $1.1M
- gross sales, not profit
- SBA charge-off
- Limited · 203 loans
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]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored7 of 8 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $185K – $352K
- 67th pct Cleaning & Ma…
- Avg gross sales
- $1.1M
- 22nd pct Cleaning & Ma…
- Royalty
- 8.0%
- 56th pct Cleaning & Ma…
- Units
- 328
- 78th pct Cleaning & Ma…
- SBA charge-off
- N/A
Quick verdict · Cleaning & Maintenance · color = vs category peers
Green = favorable by >10% vs Cleaning & Maintenance median · 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 71/100 (higher is better).
- GROWTHNegative: net -2 franchised outlets in the latest year (15 opened, 17 closed); 8 signed but not yet open (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Rainbow International SPV LLC
- Parent company
- Neighborly Assetco LLC
- FDD Item 1, page 11 of the 2026 FDD
- Ultimate parent
- Neighborly (Dwyer Franchising LLC d/b/a Neighborly); controlled by KKR investment funds
- FDD Item 1, page 11 of the 2026 FDD
- 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
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).
Same owner · FDD Item 1, page 11
17 other brands on this site name Neighborly (Dwyer Franchising LLC d/b/a Neighborly); controlled by KKR investment funds as parent or ultimate parent in their own FDD.
- AIRE SERVC
- Dryer Vent WizardB
- Five Star PaintingC
- Glass DoctorC
- HouseMasterD
- Molly MaidC
- Mosquito JoeB
- Mr. ApplianceD
- Mr. ElectricB
- Mr. HandymanC
- Mr. RooterA
- Precision Garage Door ServiceA
- Rainbow InternationalD
- Real Property ManagementB
- ShelfGenieB
- THE GROUNDS GUYSD
- Window GenieD
Portfolio: KKR (Kohlberg Kravis Roberts) (private-equity sponsor) · Neighborly
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
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 59% above 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
- Middle of category 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%
- 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 |
| Inventory (initial) | $41K – $66K |
| 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 98% 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 Restoration 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 Restoration 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 by percentile cohort (Part I) and by territory size (Part II)
- Sample size
- 284 outlets
- vs category median 32 · large
- Range (low → high)
- $2K→$14.5MCited, not corroborated — printed on page 90 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- 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 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
Total ongoing fee load of 5.0% — below the Cleaning & Maintenance median of 8.3%.
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 medians
How Rainbow Restoration Compares
Category median of published Cleaning & Maintenance brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
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
Last fiscal year · Item 20 exits and transfers
- Terminated
- 16
- Not renewed
- 1
- Signed, not yet open
- 8
- 0.02 per open outlet · Item 20 Table 5
- 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
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
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.
Where the owners are · Item 20 owner list
21 current owners across 11 states; 5 former (terminated, transferred or not renewed) listed separately.
- NJ 5
- TX 4
- FL 3
- AR 2
- CO 1
- HI 1
- IN 1
- KY 1
- MI 1
- NC 1
- OH 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
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
- Limited · 203 loans
- Limited SBA coverage: 203 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 203 loans
- 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?
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)
Subject: the franchisor is a named party (plaintiff).
Rainbow International/Grounds Guys v. Cheyenne Partners LLC and Jason Alan Kitts (breach of non-compete, trade secrets, unpaid fees) - franchisor prevailed, awarded ~$541K plus attorneys fees, currently on appeal/rehearing. Also Rainbow International SPV LLC v. Rapid Response Disaster Services LLC et al. (suit to collect monies owed, filed Oct 2025).
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
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)
Item 8 discloses Rainbow International SPV LLC had revenue of $3,313,970 (11.47% of total revenues of $28,902,600) from franchisee purchases from approved suppliers in FY2025. Full audited financials in Exhibit C are for parent Neighborly Assetco LLC and Manager (Neighborly Company), combined statements in $000s, not broken out for the franchisor entity alone -- not captured as franchisor_net_worth/net_income/assets due to ambiguity. Item 8 states the franchisor's own total revenue as $28,902,600 (FY ending 2025-12-31); the statements above are the parent's.
ⓘ 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
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: No
- Restricted to system-approved products: No
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 71 / 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 | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory population | 200,000 |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| 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 |
| Termination groundsℹ | 11 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | No |
| Arbitration location | McLennan County, Texas |
| Jury trial waiver | Yes |
| Governing law | Texas |
| Litigation count | 3 |
View Item 3 litigation summary
Rainbow International/Grounds Guys v. Cheyenne Partners LLC and Jason Alan Kitts (breach of non-compete, trade secrets, unpaid fees) - franchisor prevailed, awarded ~$541K plus attorneys fees, currently on appeal/rehearing. Also Rainbow International SPV LLC v. Rapid Response Disaster Services LLC et al. (suit to collect monies owed, filed Oct 2025).
Items 10, 11
Training & Operations
- Classroom training
- 205 hrs
- On-the-job training
- 36 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Site selection
- franchisee, with franchisor guidelines
- 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
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.
Who owns Rainbow Restoration?
Rainbow Restoration is franchised by Rainbow International SPV LLC. Its parent company is Neighborly Assetco LLC. The ultimate parent named in the FDD is Neighborly (Dwyer Franchising LLC d/b/a Neighborly); controlled by KKR investment funds. Source: FDD Item 1, 2026 filing.
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?
SBA 7(a) loan charge-off data is not available for Rainbow Restoration (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
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 71 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.
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.