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The Rainbow International Restoration Franchise Cost
Having a home service business can become profitable due to many homeowners needing repairs and restorations constantly. But with many home services businesses and franchises out there in the market, it may pose a challenge to those who have yet to start. And it might be a better alternative to invest in a franchise than start from scratch. One of the franchises to consider is the Rainbow International Restoration.
Here’s what you need to know about it and how much the franchise cost is.
Rainbow International Restoration Franchise Overview
Rainbow International Restoration started in 1981. The home service franchise has more than 400 stores; almost 300 are franchised in the US while it’s more than 100 globally. These include Canada, Germany, and the UK. They’re also part of the Neighborly group of brands, which include the following companies:
- Glass Doctor
- Mr. Rooter
- AireServ
They provide these services:
- Restoration services (fire and water)
- Cleaning and deodorizing
- Reconstruction
Training
Training depends on what the franchisor deems necessary for the franchisee. It depends on their knowledge and experience of the franchise. It will take at least five days to complete Phase I training.
The franchisor MAY give Phase I training to franchisees held at a location or through video call or conferencing. If required, a franchise consultant will join them during the training. A designated manager or owner should complete this training phase.
Meanwhile, Phase II training will be held in Waco, Texas (the headquarters) or via video call. This will take around 11 days to complete. After this, the franchisor will accomplish field training, which will take a day to five days to complete.
The franchisor will also hold the “Reunion,” a required training or conference conducted annually. They might also facilitate additional training sessions. Plus, there’s optional training classes and certifications for the following:
- Duct cleaning
- EPA Lead Safe
- IICRC ASD (certification)
- OST (certification)
- FSRT (certification)
Territory
The franchisor will grant a location to the franchisee based on site selection guidelines. The Franchise Agreement (FA) will indicate the limited protected territory granted. Plus, franchisees are not allowed to operate beyond their assigned territory. Added to that, the franchisor MAY not allow another franchisee to operate their store in the protected area based on the FA.
It should be noted that the location should cater to a population of at least 100,000 and at the most 2,500,000. The franchisor will allow an exemption for those who want to set up a franchise with more than 2,500,000 people in the area.
Franchise Obligations and Terms
If the franchisee is an individual, they must operate and oversee business operations. But the franchisor may opt to have someone else take the franchisee’s place to run it.
If, for instance, the franchisee is a legal entity, a designated owner should have completed the training to run the franchise. A manager can also take the helm at the franchisor’s approval.
Franchisees should remember to sell only approved goods and services. But if they plan on selling other goods or services, the franchisor must approve this beforehand. Also, franchisees should carry out warranty policies as stated in their guidelines.
As for franchise terms, a franchisee will have an initial 10-year term. But, they can renew for another ten years, provided that the franchisees meet requirements.
Rainbow International Restoration Franchise Cost
The franchisor estimates that the initial Rainbow International Restoration franchise cost is around $156,031 to $257,756. This doesn’t include real estate costs yet. Plus, there are licensing, marketing, and renewal fees to bear in mind.
As for financial assistance, the franchisor has no obligation to provide any. However, the franchisor may choose to finance a portion of the initial franchise cost based on several qualifications. The criteria include credit value, collateral, and financing policies. But for equipment, they might offer financing options for that.
They may reach out to third-party lenders regarding financing options to their franchisees but will not directly transact with them.
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $40,000 | $40,000 + $400 per 1,000 additional population over minimum |
| Vehicle | $2,000 | $34,000 (van) – $40,000 (box truck) |
| Equipment, Supplies and Inventory | $40,461 | $40,461 |
| Insurance: Annual General liability/Pollution/Workman’s Comp/Office | $7,500 | $15,000 |
| Advertising & Promotional and Local Marketing Spending for Marketing Start-up Phase | $15,000 | $25,000 |
| Training, Travel, Lodging and Food | $6,400 (All 4 trainings- WRT, Business, ASD, FRST) | $10,200 |
| Deposits, Permits & Licenses | $1,675 cert./mold/rebuild | $3,600 |
| Professional Fees | $2,500 | $5,000 |
| Recruiting and Onboarding | $495 | $495 |
| Additional Funds 6-9 months | $40,000 | $70,000 |
| Real Estate | Varies | |
| ESTIMATED TOTAL* | $156,031 (does not include real estate costs) | $257,756 + any additional franchise fee + any real estate costs |
Other Costs
| Type of Fee | Amount |
|---|---|
| License Fee | 3% to 8% of gross sales except for “roll-in” sales and reconstruction services. In addition, minimum license fees apply. |
| Marketing, Advertising and Promotion (MAP) Fee | 2% of gross sales except for “roll-in” sales and reconstruction services. |
| Local Marketing Groups | Not to exceed 3% of gross sales. |
| IICRC (Institute of Inspection, Cleaning and Restoration Certification) Exam Fee | $65 fee per exam; $150 fee for AMRT |
| EPA Lead Safe Training and Certification Fees | $150 |
| FUSION Software Monthly Fees | The then-current monthly support fee. Currently $315 per month. |
| Xactimate Software Monthly Fees | The then-current monthly fee. Currently, $155 (plus applicable taxes) per month for the pro version for each installation |
| Call Center Services Monthly Fees | One-time Set Up Fee: $249.00 Monthly Fees: 1st tier: $0.98/minute 2nd tier: $0.93/minute 3rd tier: $0.88/minute 4th tier: $0.84/minute$50 minimum monthly fee. |
| Annual Convention (Reunion) Fees | Currently $1,000 or less. |
| Transfer Fee | The greater of (i) $7,500 or (ii) 5% of the sales price. |
| Late Fees (on FUSION, Xactware, and Technology Package) | $25 per month or the maximum amount allowed under the law, whichever is less. |
| Late Fees | $10 per day. |
| Dishonored Check or ACH Draft | $25 |
| Interest | 12% on unpaid balances. |
| Failure to Maintain Insurance | The actual cost for insurance premiums and a reasonable fee for expenses the franchisor incurs. |
| Audit | Cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees. |
| Renewal Fee | $5,000 |
| Amendment Fee | $250 |
| Unapproved Suppliers | The franchisor’s actual out-of-pocket costs of inspection or testing. |
| Indemnification and Attorneys’ Fees and Costs | Varies according to loss. |
| Tax Reimbursement | Varies according to tax. |
| Key Accounts/Management Fee | Up to 5% of total gross sales related to key account work, including gross sales that relate to key accounts |
| Technology Package Monthly Fees | $24 per month; Additional fees vary |
| Additional Training Fees | Then-current fee; Currently: Up to $3,000. |
| Optional Air Duct Cleaning Training Fee | $2,500 |
Did You Know?
- Zor Awards has named Rainbow International Restoration as one of the best franchises to buy in 2020. Aside from this recognition, they also earned a spot in Entrepreneur’s Franchise 500 list in 2020 and 2021.
- Those with a current restoration business may convert it into a Rainbow International Restoration franchise.
- Their restoration and repair services are available to the public 24/7.
If you think this investment is for you, you can start your franchise journey here.
For other franchise-related information, read more here at Franchise How.