Home Services
1-800 Water Damage Franchise
A water damage restoration, mold remediation, and fire/smoke cleanup franchise under BELFOR Franchise Group -- the franchising arm of BELFOR, one of the largest property restoration companies in North America.
Disclosed in the FDD's litigation section (Item 3)
In January 2024 the franchisor sued a former franchisee for breach of contract, unjust enrichment, and trademark infringement, alleging the franchisee kept operating a competing business under its former 1-800 Water Damage business profiles after termination; the parties reached a confidential settlement in December 2025 requiring a lump-sum payment to the franchisor. California DFPI itself shows no action on file.
Every franchisor has to file a document called an FDD before they can legally sell you a franchise. Buried in it are the two things a sales rep won't volunteer: what you'll actually spend to open, and whether existing locations are opening or closing. That's what's below, pulled straight from 1-800 Water Damage's own filing.
What it costs to open
From the filing's investment breakdown -- not a "starting at" number a sales rep quoted you.
Franchise fee
$59,000
Total to open
$142,903–$312,398
Ongoing royalty
10% of gross sales
What you'd actually spend, over time
The upfront cost is only part of it. Plug in what you expect a location to bring in, and see the real total once royalties over a few years are added on top.
Defaulted to a rough home services industry average, not a figure from 1-800 Water Damage's own FDD -- change it to your own estimate.
Total cost of ownership over 5 years
$442,903 – $612,398
Startup investment
$142,903–$312,398
Royalty per year (10%)
$60,000
Total royalty, 5yr
$300,000
When would you break even?
Revenue alone doesn't tell you this -- it depends on what's left after rent, labor, and everything else. 1-800 Water Damage's FDD doesn't disclose a reliable profit figure (most franchisors don't), so this starts from a typical home services profit margin (~15%) and applies it to the revenue you entered above -- adjust the percentage to your own realistic estimate.
Defaulted to a general home services industry benchmark, not a figure from 1-800 Water Damage's own filing -- this is a starting point to adjust, not a promise about what franchisees actually make.
At that profit, you'd break even in about
1.6–3.5 years
Weigh that payback period against what you already know: 1-800 Water Damage is currently losing locations. A long payback period on a shrinking brand is a very different bet than the same payback period on a growing one.
Is 1-800 Water Damage actually growing?
Franchisors have to report, every year, how many locations opened, closed, or changed hands. Most franchise sites never show you this. Here it is:
Locations opened vs. closed, by year
ShrinkingFrom Item 20 of 1-800 Water Damage's FDD, the section franchisors use to disclose real openings and closings.
| Year | Franchised units, start | Franchised units, end | Net change |
|---|---|---|---|
| 2023 | 167 | 178 | +11 |
| 2024 | 178 | 175 | -3 |
| 2025 | 175 | 160 | -15 |
Most recent year (2025): lost 15 franchised units, ending the year at 160 total.
Where this came from: California DFPI Registration Renewal, filed 4/2/2026. FDD issuance date March 30, 2026. You can pull the same filing yourself from the California DFPI's public franchise search. Filed 2026-03-30. None of this is investment advice -- get the franchisor's current FDD and talk to a real attorney or accountant before you sign anything.
If you see a different unit count elsewhere: franchisors only have to refile their FDD annually, so the numbers here can run 6–18 months behind a franchisor's own real-time marketing claims -- which often aren't independently verified, and sometimes count signed-but-not-yet-open locations. A gap isn't necessarily an error on either side; it's two different snapshots in time from two different sources.