Rainbow RestorationFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $185K – $352K
- 66th pct Cleaning & Ma…
- Avg gross sales
- $1.1M
- 36th pct Cleaning & Ma…
- Royalty
- 8.0%
- 39th pct Cleaning & Ma…
- Units
- 328
- 76th pct Cleaning & Ma…
- SBA default
- 12.3%
- system-wide median varies by category
Quick verdict · Cleaning & Maintenance · color = vs category peers
Green = >15% above Cleaning & Maintenance avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Each dollar invested generates 4.0x in gross revenue, well above the typical 1.5-2.5x range.
Franchising since 1981. Systems this mature have refined operations and brand recognition.
Bottom line
- Total investment $185K – $352K including a $60K franchise fee, 8.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $602K).
- Verdict B (Above Average) with a risk score of 60/100. SBA loan charge-off rate of 12.3% across 203 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Rainbow International SPV LLC
- Parent company
- Neighborly Assetco LLC
- Predecessor
- The Franchisor is Rainbow International SPV LLC
- Prior franchisor entity
- Incorporated in
- DE
- 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
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.
- CEO
- Michael Anthony Davis
- Headquarters
- TX
- Founded
- 1980
- FDD year
- 2026
- States available
- 45
FDD Item 7 · 2026 filing · 12 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.
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
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $185K – $352K
- Near category avg vs category
- Liquid capital req'd
- $40K – $100K
- Near category avg vs category
- Franchise fee
- $60K – $60K
- Near category avg 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.
Financial Performance
- Avg gross sales
- $1.1M
- Per unit, per year
- Median gross sales
- $602K
- Item 19 type
- gross_sales
- Sample size
- 284 units
- vs category median 31 · 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
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 204 Cleaning & Maintenance brands
vs Cleaning & Maintenance averages
How Rainbow Restoration Compares
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
- 5.1%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -0.6%
- Net unit change last year
- 3-yr CAGR
- +4.8%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 15
- Closed (3yr)
- 16
- Terminated (3yr)
- 11
- Non-renewed (3yr)
- 3
- 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
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.
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.
Risk analysis
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.
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)
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 60 / 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
| 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 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 314 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 B-grade franchise with a risk score of 60 out of 100, 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.
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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.