SERVPRO DFW - Three Restoration Franchises

$2.5M

Revenue

$650K

SDE

3.6x

Multiple

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Full Editorial Writeup

This is a package of three connected SERVPRO franchises operating in the Dallas-Fort Worth metroplex, one of the fastest-growing population centers in the country. The business does the unglamorous but essential work of restoration: water mitigation, fire damage cleanup, mold remediation, reconstruction, and 24/7 emergency response for both commercial and residential customers. SERVPRO is the dominant national brand in this category, which means inbound lead flow, insurance-carrier relationships, and a proven playbook come with the franchise license.

The economics matter here. On $2.5M in revenue, the business throws off $650K in SDE, a roughly 26 percent owner-earnings margin that is healthy for a labor-and-equipment services business. The asking price of $2.35M implies a 3.62x cash flow multiple, which is in the normal band for restoration franchises and reflects the brand backing and recurring insurance-driven demand.

The strategic appeal is consolidation. Owning three contiguous territories gives a buyer immediate scale, shared overhead leverage across crews and equipment, and a larger addressable base in a metro adding tens of thousands of households per year. Restoration demand is non-discretionary and event-driven: pipes burst, storms hit, and insurance pays the bill regardless of the economic cycle.

Why we like it

Earnings quality is solid for a services roll-up: $650K SDE on $2.5M revenue is a 26 percent margin, and a meaningful share of restoration work is paid by insurance carriers rather than out-of-pocket consumers. That insulates collections and pricing from individual customer budget pressure, which is exactly what you want in a downturn.
The moat is the SERVPRO brand plus three contiguous protected territories. National brand recognition drives inbound calls and carrier referral relationships that a standalone operator cannot replicate, and owning three franchises removes the territory friction of competing against your own brand. This is a defensible local monopoly inside the SERVPRO system.
Market tailwinds are real and structural. DFW is among the fastest-growing metros in the US, meaning more homes, more commercial square footage, and more water and fire events every year. Restoration demand compounds with population and building stock, not with discretionary spending.
Operator advantage is the consolidation play. A capable owner can centralize dispatch, equipment fleets, and back office across all three locations, then bid for larger commercial and multifamily contracts that single-territory operators cannot service. The platform is already built; the upside is in tightening operations.

How to improve it

Audit and rebuild the commercial pipeline in the first 90 days. Residential insurance jobs are reactive and lumpy, but recurring commercial accounts (property managers, hospitals, schools, hotels) provide predictable volume. Lock in priority-vendor agreements with regional property managers to smooth revenue.
Centralize the three franchises into one shared services backbone. Consolidate dispatch, billing, equipment storage, and administrative staff so you stop paying for duplicate overhead across three locations. This alone can add several points of margin without touching revenue.
Deepen relationships with insurance adjusters and TPA networks. The fastest way to grow a restoration business is to be the preferred vendor that carriers automatically assign. Invest in the certifications, response-time SLAs, and documentation systems that get you onto more approved-vendor lists.
Build a 24/7 emergency response capability with hard guarantees. Restoration is won on speed: the first crew on site usually wins the job. Marketing a guaranteed response window and staffing on-call crews can capture share from slower local competitors.
Implement job-level profitability tracking. Many restoration shops fly blind on which job types and crews actually make money. Installing software to track margin by job category lets you kill unprofitable work and double down on high-margin water and mold jobs.
Layer in reconstruction as a margin expander. Mitigation gets you in the door; the rebuild is where larger ticket sizes live. Capturing more of the reconstruction scope on existing mitigation jobs increases revenue per claim without new customer acquisition cost.

Diligence notes

Verify the SDE composition and how much of it is true owner earnings versus add-backs. Restoration cash flow can swing year to year with storm activity, so request three to five years of monthly financials to understand the normalized baseline and seasonality. A single big-loss year can inflate trailing SDE.
Confirm the franchise transfer terms and remaining territory rights with SERVPRO corporate. Understand royalty rates, transfer fees, renewal timelines, and any required capital investments or upgrades the franchisor will demand on change of ownership. The three-territory structure must transfer cleanly.
Pin down customer and revenue concentration, especially insurance carrier dependence. If one or two carriers or TPA contracts drive a large share of jobs, the loss of a single vendor relationship could materially impair the business. Ask for a breakdown of revenue by source and by job type.
Examine staffing, crew tenure, and equipment condition. Restoration is people and equipment intensive, and crews that leave with institutional carrier relationships are a real risk. Inspect the equipment fleet for age and deferred maintenance, since heavy drying and extraction gear is expensive to replace.
Clarify why the owner is selling and the degree of owner involvement in operations and sales. If the seller is the primary rainmaker on commercial and carrier relationships, transition risk is high. Negotiate a meaningful earnout or transition period tied to retained accounts.

Source

Originally listed on BizBuySell. View original listing →