Good Morning Wolf Pack,

Today's newsletter highlights 1-800 Water Damage, a restoration franchise that turns other people's worst days into a recurring, recession-resistant cash machine.

Enjoy!

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FRANCHISE OF THE WEEK

1-800 Water Damage

Fast Facts

Background

• HQ: Ann Arbor, Michigan

• Founded in 2002, part of BELFOR Franchise Group (the world's largest disaster restoration company)

• 1-800 Water Damage is a 24/7 property restoration franchise handling water, fire, smoke, and mold damage cleanup for residential and commercial customers

Location Trends

Franchise Fees

• Royalty: 7-10% of gross sales on a sliding scale for remediation services (rate drops as volume climbs), plus 3% on reconstruction services above a threshold

• Brand Fund: 2% of gross sales

• Franchise Fee: $59,000-$64,950 per territory (2024/2025 FDD)

Financial Overview

The below table discloses information on 1-800 Water Damage franchised locations that were open and operating for the full 2023 calendar year.

The Wolf's Take

1-800 Water Damage isn't a flashy business, but it’s definitely an important one that provides peace of mind for its customers.

You're looking at an investment range in the low-to-mid six figures, producing average gross sales that run roughly 2.5x the midpoint, which is a ratio most home services brands can't touch.

The demand side takes care of itself: pipes burst, basements flood, storms hit, and somebody has to show up at 2 a.m. with a truck and a moisture meter, which is exactly why this category tends to hold up even if the broader economy doesn't.

Backing from BELFOR, the largest restoration company in the world, means franchisees get access to national insurance relationships and large-loss commercial jobs a standalone operator could never land alone.

The royalty structure is more layered than a flat percentage, with rates that step down as volume grows, so I'd want to see exactly how that plays out at a $500K+ location before signing anything.

Licensing and labor requirements also vary by state, so that's worth digging into early.

Overall, this is worth a look for anyone comfortable running a service business that depends on someone else's bad day.

Resources

• 1-800 Water Damage Franchise Development Site

• 1-800 Water Damage Opens New Franchise Location in Tennessee — Franchising.com

SMB TWEET OF THE WEEK

The Single Priority - blue

Loved this tweet from @bluewmist because this is essentially how I’ve structured my days for years, although admittedly, I do keep three instead of one.

When the year inevitably flies by and you ask yourself what you’ve accomplished, you’ll always be able to look back on a habit like this. 1% better every day.

WOLF BITES

• Sony will cease production of discs for new PlayStation games in 2028 🤯

• Amazon and JCPenney offer customers relief with gas deals for holiday weekend 🏷️

• Victor Willis, who co-founded the Village People and co-wrote ‘Y.M.C.A.,’ dies at 74 🪦

• Zoom meetings now come with an uninvited AI notetaker guest 🤖

• A decades-old fossil sitting in a drawer turns out to be Antarctica's first dinosaur bone 🦴

• An ancient asteroid triggered a 330-foot tsunami in the North Sea 🌊

• OpenClaw, the viral AI agent, is now available on iOS and Android 🤳

• NASA's Perseverance rover finds complex organic matter on Mars 🔴

That’s it for this edition of The Wolf Report. Feel free to reply with any questions or feedback. Thanks and see you next week!

— The Wolf