Owning a Restoration Franchise: How to Avoid Three Common Pitfalls

With weather worsening and floods and fires increasing nationwide, the restoration franchise business is likely to see more customers. If you’re interested in the home improvement industry, is restoration the right field for you, or should you investigate alternative franchises? Learn about what restoration means, the potential for growth, the pitfalls, and some other franchise choices.

What Does a Restoration Franchise Do?

“Restoration” means cleaning and repairing damage related to water, fire, or other disasters. Restoration might include not only cleaning but also sanitizing an area, drying it, and repairing damage. Whether the cause is a small leak that went undetected, or a big event like a burst pipe, building fire or even a hurricane, restoration franchises handle homeowner nightmares like these:
• Water removal
• Water damage repair
• Mold removal
• Sewage cleanup
• Fire damage repair
• Smoke damage repair
• Storm damage repair and natural disaster repair
• Carpet cleanup and drying
• Biohazard cleanup

Many restoration firms work on both residential and commercial buildings, but residential customers dominate: Seventy-one percent of restoration companies say that at least 70 percent of their customers are residential.

Mitigating water damage is the most profitable service for the business owner, with 62 percent of restoration companies saying water damage restoration brings in the highest profit margins. Mold abatement is a distant second, with only 14 percent of owners reporting that mold abatement is their most profitable service.

Restoration Franchises as Investments

About 35 percent of all restoration businesses are franchises of larger companies. To buy a business from one of the five largest restoration franchisors, expect to make an initial investment of between $60,000 and $200,000, depending on the franchisor and the region of the country. The industry says the profit margin for water damage mitigation is high, as high as 75 percent, and the profit margin on repairs can reach 50 percent.

The market for restoration work is affected by the extreme weather the United States is increasingly experiencing. Floods, wildfires, snow and tropical storms, and hurricanes all are becoming more severe and more common. Take just one example: Hurricane Harvey unleashed 127 billion tons of water onto Houston in 2017, creating a lot of work for restoration contractors.

Pitfalls of Owning a Restoration Business

Restoration is vital to work, repairing homes and businesses after crises small, like a leak, and large, like a natural disaster. But this work isn’t for everyone. Do you know if a restoration franchise is right for you? Think through these three pitfalls:
• You’re interested in the home improvement field. But are you interested in cleanup and repair, or in design, decor, and remodeling? If your interest is really in design and interior remodeling, you should look at other types of home improvement franchises.
• Bad weather can be good for business—it drives customers to seek restoration contractors. But it’s also unpredictable. Are you comfortable relying on whether to drive at least some of your business? Do you prefer a more predictable schedule of work?
• Restoration franchises often have relationships with insurance companies, acting as “preferred contractors.” While this sends work your way, it also means you may be limited to what an insurer is willing to cover on a job.

How do you avoid these pitfalls? The key is knowing what you want from your business and where your real interest in home improvement lies.

Finding Franchise Alternatives

If restoration isn’t for you, what other types of home improvement franchises are possible alternatives? Home improvement is a broad category, so you’ll find plenty of options for your entrepreneurial energy. Some areas of home improvement franchising include:
• Kitchen remodeling
• Cabinet and wood restoration
• Bath remodeling
• Window treatments and blinds
• Flooring and carpeting
• Appliance installation and repair
• Painting
• Interior decorating

Kitchen remodeling is especially hot right now, with homeowners wanting to upgrade after a year at home showing them their kitchens’ limitations. The National Kitchen and Bath Association predicts a growth of 16.6 percent in 2021 for the kitchen and bath remodeling industry, a huge leap over just 1 percent growth in 2019.

A Kitchen Tune-Up franchise is a great alternative to a restoration franchise. With more than three decades in the industry, Kitchen Tune-Up supports new owners with extensive training, access to Kitchen Tune-Up’s national network of suppliers, and “turn-key” ready franchises. No experience is necessary to start a Kitchen Tune-Up franchise, and the initial costs are relatively low. The initial investment fee is under $100,000.

To find out if Kitchen Tune-Up is your best bet for a home improvement franchise,
visit ktufranchise.com, or call 1-888-890-5210 to speak to a franchise licensing advisor.