HAWK is a high-margin franchisee that specializes in water and fire damage restoration services based in a major Southeast market. 85% of revenue ties to water remediation and drying services. HAWK is unique in that they source their work directly from homeowners who have water or fire events, and then help the homeowner’s insurance company in resolving their claim. The Company does not perform reconstruction services. This allows them to get in and out of most projects in less than 5 days. This efficient operating model allows HAWK to enjoy ±25% EBITDA margins.
The Company’s founder was approached about franchising the concept a couple years ago and he’s allocated much of his time to building the franchisor, versus driving this corporate-owned unit. Several managers share time at this unit and in growing the franchisor. The motivation for sale is to get a strong operating franchisee in place so the owner can focus on growing the franchise business. HAWK has a strong management team that has been with the Company since its inception. Two shared employees will continue for 12-18 months or until the new owner finds strong replacements.
HAWK primarily services a 45-mile radius from its office. When the office gets a call, HAWK sends a sales person to inspect the project and work with the homeowner on assessing if a claim should be filed. Once HAWK receives a claim number from the insurance company, they send a 2-man crew to demo the damaged area, pick up contents and set up the equipment. The Company averages 6-8 calls per day resulting in 70-80 tickets per month. Average tickets range from $4,800 to $5,200.
The ideal buyer is a successful manager/entrepreneur with $3M+ net worth and operations experience. The owner believes there is a path to gaining 15-20% of overall market share through additional marketing and a sister location. Other growth opportunities include adding services and additional territories in tangential markets over time. There’s an opportunity for Master Franchise rights that would dramatically increase the territory size.
HAWK leases a 14,000 s.f. building (2-acres) from an independent third-party with quick access to the major interstates in its MSA.
Market Outlook / Competition
The market for water and fire restoration services is excellent. HAWK’s owners believe the current geography generates $100-120M of water and fire restoration services annually. Many competitors are small mom and pops, others are larger franchises or regional players. However, very few of them have a similar model to HAWK where they sell directly to the homeowner when they have an event versus waiting for referrals from insurance companies.