How to Finance a Restoration 1 Franchise: Equipment and Claims
By Chris Cornella
A Restoration 1 franchise loan funds a business that has to be ready the moment a pipe bursts, a fire is put out or a storm rolls through. Restoration 1 franchisees provide emergency water, fire, smoke, mold and storm damage services for homes and businesses, so financing has to cover drying equipment, service vehicles, trained crews and the cash gap that comes with insurance-paid work.
This article explains what goes into a Restoration 1 territory, how the brand’s SBA Franchise Directory listing and its directory note affect a loan, and how buyers of new territories and existing businesses typically structure financing.
US Professional Funding is not affiliated with, sponsored by or endorsed by Restoration 1; the name is used only to describe the business. Fees, investment ranges and requirements are set out in the franchisor’s current Franchise Disclosure Document (FDD) and can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice, and buyers should review the current FDD and franchise agreement with a qualified franchise attorney and accountant.
Restoration 1 Franchise Loan at a Glance
- Concept: emergency mitigation, restoration and reconstruction for residential and commercial properties damaged by water, fire, smoke, mold and storms.
- Format: a home-based or small warehouse-based service territory built around vans, drying and cleanup equipment and on-call crews, rather than a retail storefront.
- Initial franchise fee, royalty and marketing contribution: stated in Items 5 and 6 of the current FDD. We could not verify current figures from the franchisor’s own materials, so request the latest FDD before you budget.
- Estimated initial investment: stated in Item 7 of the current FDD.
- Biggest cash flow variable: the time between finishing a job and collecting from an insurance carrier or property owner.
- SBA Franchise Directory: listed as “Restoration 1” under code S1426, with a note about lien position on collateral.
What Is Restoration 1?
Restoration 1 is a franchised property damage restoration brand. Its franchisees respond to water damage, fire and smoke damage, mold, sewage backups and storm events, then handle the drying, cleanup and, in many cases, the rebuild. Customers include homeowners, property managers, commercial building owners and, indirectly, the insurance carriers that pay for most covered losses.
How a territory operates. A typical Restoration 1 business runs from a modest office and warehouse space where equipment and vehicles are staged. Revenue comes from emergency calls, referrals from plumbers, insurance agents and property managers, and repeat commercial clients. Crews are dispatched around the clock, which shapes staffing, equipment and working capital needs.
Why lenders view it the way they do. Lenders like that restoration demand is driven by need rather than discretionary spending, that equipment holds collateral value and that a franchise brings training, systems and marketing. They are cautious about uneven job flow, weather-driven spikes, long collection cycles on insurance work and the owner’s ability to recruit and keep skilled technicians.
Restoration 1 Franchise Costs
We could not verify Restoration 1’s current Item 5, 6 and 7 figures from the franchisor’s own materials, so this section explains what each cost category covers rather than quoting numbers that may be out of date.
Initial franchise fee. Item 5 of the FDD states the fee and whether it changes with territory size, population or the number of territories you buy at once.
Facility. Most owners lease a small flex or warehouse space for equipment storage, drying and cleaning of contents, and vehicle parking. Build-out is usually light: shelving, a small office, security and utility upgrades.
Equipment and vehicles. Restoration is equipment-intensive. Expect dehumidifiers, air movers, air scrubbers, extraction units, moisture meters, thermal imaging cameras, hand tools, personal protective equipment, generators and one or more vans or trucks with trailers.
Opening costs and working capital. Training travel, licenses, insurance, software, initial marketing and additional funds to cover payroll, fuel and rent while insurance claims are processed.
Total investment. Item 7 of the FDD totals these categories into a low and high range. Line items to look for include:
- Initial franchise fee
- Equipment package (drying, extraction, air filtration and detection equipment)
- Vehicles, wraps and trailers
- Lease deposits, rent and leasehold improvements
- Computer hardware, job management and estimating software
- Insurance, licenses and permits
- Initial training travel and expenses
- Grand opening and local marketing
- Uniforms, supplies and chemicals
- Additional funds for the initial operating period
Make sure every line in your loan request ties back to the Item 7 table or to a written vendor quote.
Ongoing Fees and How They Affect Your Loan
Royalty and marketing. Item 6 of the FDD sets out the royalty, any brand or national marketing fund contribution, local marketing requirements, technology or software fees and any minimum royalty. A minimum royalty matters in restoration because job volume can swing month to month.
Other recurring costs. Vehicle payments, fuel, insurance, equipment maintenance, chemicals and on-call payroll all hit before a claim is paid.
How lenders factor these costs in. Lenders look at cash flow after royalties, marketing, payroll and vehicle costs and ask whether enough remains to cover debt service with a cushion. Because insurance receivables can take weeks or months to collect, they also look closely at working capital and at how much revenue is tied up in open claims.
Franchisor Requirements for New Owners
The current FDD and the franchisor’s application process are the authoritative source for Restoration 1’s requirements. In practice, expect the franchisor to look at:
- Financial capacity: enough net worth and liquid capital to fund the initial investment and carry the business until receivables start turning. Ask for current minimums in writing.
- Leadership and sales ability: restoration owners build referral relationships with plumbers, agents and property managers, and manage crews under pressure.
- Training and certification: completion of the franchisor’s training and industry certification for technicians.
- Commitment to emergency response: the ability to staff calls at any hour.
The approval process. Candidates typically inquire, receive the FDD, complete an application, review territory availability and sign after the required disclosure waiting period. Bring a financing specialist in before you sign so your Restoration 1 franchise loan timeline matches training and launch.
Ways to Own a Restoration 1
A new territory. A start-up is underwritten on projections, your experience and your equity. Lenders focus on the equipment package, the ramp-up of referral sources and how much working capital you hold for the first claim cycles. Our franchise start-up financing page explains how we approach new units.
Buying an existing territory. A resale comes with equipment, trained staff, referral relationships and a revenue history. Lenders can underwrite actual results, but they will look closely at open receivables, equipment condition and how dependent revenue is on the departing owner. Read about buying a franchise resale, and see our restoration business acquisition financing.
Converting an independent restoration company. An existing independent operator may be able to join the brand, subject to franchisor approval. Lenders will underwrite the existing business’s history and the cost of rebranding.
Additional territories. Owners who perform well may add adjoining territories, subject to franchisor approval, and a second Restoration 1 franchise loan is usually easier to underwrite once the first territory has a track record.
Financing Options for a Restoration 1 Franchise
SBA 7(a) loans. Because Restoration 1 is on the SBA Franchise Directory, an SBA 7(a) loan can fund the franchise fee, equipment, vehicles, leasehold improvements, working capital or the purchase of an existing territory, subject to lender approval and program rules.
SBA 504 loans. The 504 program fits owner-occupied real estate and long-lived equipment. It can make sense for an established owner buying a warehouse, but it rarely fits a new territory.
Conventional term loans. Experienced operators with strong cash flow may use a conventional business loan for acquisitions or expansion.
Equipment financing. Dehumidifiers, air movers, air scrubbers, extraction units, thermal imaging cameras, generators, vans and trailers can be financed or leased separately, preserving cash for payroll. See franchise equipment financing and leasing.
Working capital and lines of credit. Insurance-paid jobs create a timing gap between labor and payment, and storm seasons can multiply job volume overnight. A line of credit covers payroll, fuel and materials while claims are processed. Learn about restoration working capital and financing insurance receivables.
Seller financing on resales. A seller may carry part of the purchase price. A seller note must be acceptable to the senior lender, is typically subordinate to it, and SBA rules may limit its structure. Our article on seller financing for restoration businesses covers the details.
SBA Loans for Restoration 1 Franchisees
The SBA Franchise Directory lists brands whose franchise agreements have been reviewed for SBA eligibility. SBA lenders generally require a brand to appear on the directory before making an SBA-guaranteed loan to one of its franchisees. A listing clears the franchise relationship for review; it does not approve any borrower.
Restoration 1’s listing. Restoration 1 appears on the directory under code S1426. Its note says the lender or CDC must ensure that it obtains the correct lien position on all collateral as required under the SBA’s standard operating procedures (SOP 50 10).
What the note means in plain English. Some franchise agreements give the franchisor rights in a franchisee’s assets, or the franchise system may involve equipment or vehicle arrangements that create competing claims. The note reminds the SBA lender to confirm it holds the lien priority SBA rules require on the equipment, vehicles, receivables and other collateral securing the loan. For you, it means expect a careful collateral review: be ready to list every piece of financed equipment, every vehicle title and any existing liens, and to coordinate separate equipment or vehicle financing with your SBA lender before closing.
Program limits. The SBA 7(a) program maximum is currently $5 million, though program rules can change. Directory status can also change, so confirm it with your lender when you apply.
SBA application tips.
- Provide a complete equipment and vehicle list with quotes, serial numbers or titles.
- Disclose any equipment leases or vehicle loans so lien positions can be sorted out early.
- Show a receivables plan that reflects realistic insurance collection timing.
- Explain how you will staff emergency calls from the first week.
How Lenders Evaluate a Restoration 1 Deal
Personal credit and financial history. Expect a review of personal credit, tax returns and a personal financial statement, plus personal guarantees from significant owners.
Net worth and liquidity. Lenders want to see your equity injection and a reserve beyond it, because restoration revenue can arrive weeks after the work is done.
Industry and management experience. Construction, insurance adjusting, property management, contracting or sales experience carries weight. If you are new to restoration, a plan to hire an experienced production manager helps.
Business plan and projections. Strong projections model job counts by type, average ticket, days to collect, technician payroll, vehicle and equipment costs and the effect of storm seasons. Avoid assuming that a single large storm will carry the first year.
The FDD and franchise agreement. Lenders review the term, renewal, transfer conditions, territory rights and any provisions that affect collateral. Our article on how lenders read a Franchise Disclosure Document explains which items matter most.
Facility and lease. The lease should run at least as long as the loan or include renewals and permit equipment storage, drying and vehicle parking.
Historical financials for resales. Expect several years of profit and loss statements, tax returns, job reports and aged receivables. Lenders will examine how much of the revenue comes from a few referral sources.
Equipment and Receivables: Two Keys to a Restoration Loan
Equipment. Restoration crews depend on enough drying capacity to handle several jobs at once. Owners often start with a core package and add units as job volume grows. Equipment financing lets you scale capacity without draining cash, and well-maintained equipment supports collateral value.
Vehicles. Vans and trucks carry equipment and crews. Each vehicle can be financed individually, but those payments count toward your total debt load.
Receivables. Much restoration revenue is billed to insurance carriers, which review estimates and may take time to pay. Accurate documentation, prompt invoicing and active follow-up shorten collection time. Lenders watch the aging of receivables closely.
Multi-Unit Growth and Territory Expansion
Owners who establish a strong first territory may add neighboring territories to share equipment, staff and marketing, subject to franchisor approval.
Financing additional territories. With operating history, lenders can underwrite existing cash flow alongside the new territory. Additional equipment and vehicles can be financed separately, and a larger line of credit can support higher volume. Each new territory needs its own projections and staffing plan.
Real-World Scenarios
A contractor launching a territory. A general contractor buys a Restoration 1 territory and uses an SBA 7(a) loan for the franchise fee, equipment and working capital. Because the contractor already owns a work truck with a loan on it, the SBA lender sorts out lien positions before closing.
A buyer purchasing an existing territory. A former insurance adjuster buys a territory from a retiring owner. The lender reviews job history, aged receivables and equipment condition, and the seller carries a small subordinated note.
An owner scaling after a storm season. An owner overwhelmed by storm volume adds a line of credit for payroll and finances additional drying equipment and a second van.
Common Mistakes to Avoid
- Underestimating the working capital needed while insurance claims are processed
- Buying too little drying capacity to run several jobs at once
- Overlooking lien conflicts between SBA loans and separate equipment or vehicle financing
- Building projections around one large storm event
- Buying a resale without reviewing aged receivables and referral concentration
- Hiring too late to cover emergency calls
For more pitfalls, read the restoration company loan mistakes that cost owners the most.
Next Steps to Finance Your Restoration 1 Franchise
Step 1: Request and review the FDD. Study Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 2: Define your territory plan. Map referral sources, competition and the property types you will serve.
Step 3: Price equipment and vehicles. Get written quotes and decide what you will finance separately.
Step 4: Build projections. Model job volume, collection timing and payroll, and use our SBA loan calculator for early payment estimates, which are for planning only and are not an offer or approval.
Step 5: Apply for financing. Submit your personal financial statement, tax returns, projections, franchise documents and collateral list to a financing specialist familiar with franchise lending.
Step 6: Close and launch. Coordinate funding with training, equipment delivery and hiring so you can answer emergency calls from day one.
Restoration 1 Franchise Loan FAQs
How much does it cost to open a Restoration 1 franchise?
The total depends on territory size, equipment and vehicles. The current FDD’s Item 7 table gives the franchisor’s estimated range; request the latest version and build your budget from it plus vendor quotes.
What is the Restoration 1 franchise fee?
Item 5 of the current FDD states the initial franchise fee. We could not verify the current figure from the franchisor’s own materials, so confirm it directly.
What royalty does Restoration 1 charge?
Item 6 of the FDD sets out the royalty, marketing contributions, any minimum royalty and other recurring fees.
Is Restoration 1 eligible for SBA loans?
Yes. Restoration 1 is on the SBA Franchise Directory under code S1426. Its note requires the lender to obtain the correct lien position on all collateral, so expect a detailed collateral review.
Can I finance restoration equipment separately?
Yes. Drying equipment, air scrubbers, extraction units and vehicles can be financed or leased separately. If you also use an SBA loan, coordinate both so lien positions are clear.
Can I buy an existing Restoration 1 territory?
Yes, subject to franchisor approval. Lenders will review job history, receivables, equipment and the remaining franchise term.
Can a first-time business owner get a Restoration 1 franchise loan?
It is possible, especially with construction, insurance, property management or sales experience and a solid equity injection. A plan to hire an experienced production manager helps.
How do insurance payments affect cash flow?
Insurance-paid jobs can take weeks or longer to collect. A working capital reserve or line of credit helps cover payroll and materials until payment arrives.
Does Restoration 1 offer financing?
Any franchisor financing is disclosed in Item 10 of the FDD. Most owners arrange their own financing.
How long is the Restoration 1 franchise term?
The term, renewal rights and transfer conditions are in Item 17 of the current FDD. Lenders prefer a remaining term at least as long as the loan.
Does the FDD include financial performance information?
Check Item 19 of the current FDD to see whether it includes financial performance representations. For a resale, rely on the business’s actual financial statements.
Final Thoughts
A Restoration 1 franchise loan finances an equipment-heavy, emergency-driven service business with a built-in receivables cycle. Buyers who review the current FDD, plan for collateral and lien coordination, price equipment carefully and hold enough working capital for insurance timing put themselves in a strong position with lenders.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment, working capital and refinancing. Learn more about our franchise financing and restoration, remediation and cleaning business financing solutions.
