Scored restoration listings.

01 · Upper band

Franchise restoration business, TPA held by entity, IICRC-certified staff, AR under 55 days

Observed: TPA program (Alacrity and Contractor Connection) registered to the operating entity, not the owner personally. Three IICRC-certified technicians on staff. AR cycle 52 days average. Supplement settlement rate 83% of requested. Franchise agreement fully assignable with no re-qualification requirement.

Outcome: Signed at 4.0× SDE. Lender DSCR 1.28× on cash-basis SDE. Franchisor approved transfer. Closed without repricing.

02 · Mid-band

Independent restoration business, TPA partially owner-registered, AR cycle 74 days

Observed: One TPA program registered to entity; one program registered to owner personally. AR cycle 74 days average. Supplement settlement rate 71%. Revenue recognized at job completion, not cash receipt. Franchise royalties excluded from initial broker SDE presentation.

Outcome: Initial ask 4.2× broker SDE. After franchise royalty correction, accrual-cash adjustment, and TPA partial-loss discount, adjusted SDE declined 31%. Repriced to 3.1× adjusted SDE. State Farm TPA re-qualification risk priced into seller note structure. Closed at 3.1× with $80,000 seller note contingent on TPA re-qualification.

03 · Lower band

Independent restoration contractor, TPA non-transferable, AR timing gap kills DSCR

Observed: TPA relationships registered entirely to owner personally with no entity registration path. AR cycle 91 days average with $210,000 in disputed claims. Revenue recognized on job completion — cash-basis SDE materially below accrual. Supplement revenue included at target, not settled amounts.

Outcome: Buyer submitted LOI at 3.6× accrual SDE. After cash-basis adjustment, disputed AR exclusion, and supplement settlement restatement, adjusted SDE declined 52%. DSCR on adjusted SDE was 0.87×. Financing declined. Deal terminated.