Rainbow Restoration
Bottom line
- Total investment $185K – $352K including a $60K franchise fee, 3.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $602K).
- Rated STRONG with a risk score of 41/100. SBA loan default rate of 0.0% across 214 loans (below the industry average).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Rainbow Restoration unit return on the cash you put in?
Unlevered ROIC · per unit
44%
In Yale's "attractive" band (30–60%)
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
$1.5M
on $7.4M purchase
Total debt
$6.0M
SBA $3.7M + senior + seller note
Overview
About
Rainbow Restoration franchisees operate water damage restoration, mold remediation, and carpet cleaning services. Day-to-day activities include emergency response dispatch, on-site damage assessment, mitigation work, customer communication, insurance claim coordination, and crew management. The business model relies on recurring events (water/fire damage), insurance referrals, and repeat customer relationships.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 10 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Declining unit count, missing profitability data, and franchisor-franchisee litigation create meaningful uncertainty around the true unit economics and system health.
Score breakdown · what drove the 41 / 100 rating
- 01MINORDeclining unit count (-0.6% YoY) indicates system contraction despite $1.06M average revenue
- 02MEDNo average net income disclosed (Item 19) prevents accurate ROI assessment on $185K-$352K investment
- 03HIGHLitigation history shows franchisor actively pursuing franchisees for breach/unpaid fees, suggesting enforcement issues or franchisee distress
- 04MINORHigh royalty cap (8%) combined with service-based model creates margin pressure on $1.06M average revenue
- 05MINORAdministrative consent order involving predecessor affiliate demonstrates regulatory compliance concerns in advertising/disclosures
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
92 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Rainbow Restoration · FDD (2026) PDF