“Ask yourself whether the dream of heaven and greatness should be left waiting for us in our graves–or whether it should be ours here and now and on this earth.” - Ayn Rand, Atlas Shrugged

Franchise in the Spotlight: Paul Davis Restoration

First, here is what Paul Davis has to say about themselves:

Paul Davis Restoration is a leading property restoration company in North America, specializing in emergency services for residential and commercial properties. Founded in 1966, the company offers a comprehensive range of services, including water, fire, smoke, and mold damage restoration. With over 320 franchise locations across the United States and Canada, Paul Davis is known for its quick response, expertise, and commitment to customer satisfaction.

When you join the Paul Davis Restoration franchise team, you’ll get the most in-depth training in the industry. Our training program will give you the knowledge, confidence, and support to successfully invest in restoration businesses. All training happens at our industry-leading training facility in Jacksonville, Florida.

The Paul Davis Restoration Training Program includes:

• Interactive training at the state-of-the-art National Training Center in Jacksonville, FL.

• Ongoing opportunities to train in the latest equipment and techniques.

• Continuing education courses to keep up required industry certifications.

• Practical instruction on business management, production, and customer service processes.

• Education on local marketing initiatives and how to implement them.

Paul Davis franchise owners receive business support in five areas:

• A dedicated and experienced field representative to help you and your team with ongoing training and support.

• Longstanding partnerships with national and regional insurers.

• Dedicated Regional Marketing Manager to help the franchise train and manage their own local marketer.

• Professionally designed local marketing campaigns and materials.

• We manage your social media presence, as well as your digital marketing, including SEO, website updates and design.

Facts:

• Established: 1966

• First Unit Franchised: 1972

• North American Franchised Units: 320+

• Franchise Fee: $100,000 - $184,000

• Required Liquid Capital: $500,000

• Total Investment Range: $285,800 - $737,400

• Royalty: 4%

• Marketing Fund: 0.75% of Gross Sales

Earnings Claim from the 2024 FDD

FDD dated March 25, 2024

This goes on for all 177 franchises in the system…

This goes on for all 36 franchisees that have been open less than 2 years

Resale Valuations

Comparison

First we will compare Paul Davis to several other popular restoration franchises:

Next let’s compare average earnings for restoration franchises:

Paul Davis (2024 FDD):

• $5.8M- average revenue of franchises that have been open more than 2 years

• $2.4M- average revenue of franchises that have been open less than 3 years

911 Restoration (2024 FDD):

• $559k- average revenue for franchises open less than 3 years

• $1.3M- average revenue for franchises open more than 5 years

PuroClean (2024 FDD):

• $551k- average revenue for franchises open less than 2 years

• $1.5M- average revenue for franchises open for 7 years or more

Rainbow Restoration (2024 FDD):

• $1M- system wide average revenue

1-800 Water Damage (2024 FDD):

• $820k - system wide average revenue

Restoration 1 (2024 FDD):

• $795k- average revenue for franchisees with 1 territory

• $1.9M- average revenue for franchisees with 3 territories

Analysis

Paul Davis is, by far, the franchise with the highest average revenues. This is likely tied to three things, the largest territory size, working capital requirements, mindset.

But first, let’s look at which factors do NOT contribute to it being a top franchise:

❌ Training on restoration: Training in the restoration space is known to be phenomenal with many of the franchises having large training warehouses and extensive, hands on training with their franchisees. Paul Davis may be a slightly better job, but at some point you can only do the job so well.

• They likely do excel in training on business management and growth

❌ Insurance Relationships: Many franchises have insurance relationships for you to utilize but you are almost never the default. You are just on the list of approved vendors for that insurance company. You still need to make personal connections in the local market and spend on marketing for home owners to choose you over other businesses.

❌ Offering more than just water restoration: Some of these restoration companies are only water restoration while Paul Davis can do fire, mold, and smoke. However, many of the above franchises do more than just water damage.

Let’s talk the three things that do move the needle:

✅ Territory Size: One territory of Paul Davis is 2-5 times as big as other restoration franchises. This means less capital goes to franchise fees and owners get more households and businesses to service. Even if everything else was even, a Paul Davis franchisee could expand to be much larger in one territory than any other franchise.

✅ Working Capital: Paul Davis requires $150,000-$200,000 in working capital above all other costs while other restoration franchises are usually between $25,000-$50,000. Since franchisees are being paid by insurance companies, there is a 45-60 day period where you are paying employees for labor but you aren’t collecting any revenue on that job. The more working capital you have, the more jobs you can take on without running out of cash. This means a Paul Davis franchisee can grow significantly faster than any other franchise can.

✅ Mindset: Paul Davis only accepts franchisees who want to build very big businesses. They want former business owners and executives who are coming in with the mindset and capital needed to scale quickly. This level of growth requires a dedication and mindset that the other franchises don’t screen for.

Overall, I would grade Paul Davis an A+ franchise.

- However, this isn’t a secret so finding open territories can be challenging.

Who is Paul Davis not for?

Paul Davis seems great, but this isn’t for everyone. You need to be fully dedicated to the business. You should be prepared to eat, sleep, and breathe Paul Davis. Be ready for 1am calls to respond to emergencies. You need to know you can lead blue collar employees and deal with customers who are going through a major catastrophe. You also need the large upfront investment plus living expenses to get you to profitability.

If you are unsure about any of these things, you should probably find something that is a better fit.

Want to check if a Paul Davis is available where you live? Send me an email- [email protected]