Restoration’s Next Wave of Competition Part II

Why AI-Displaced Corporate Professionals Will Be Competing for Market Share Through Franchising

In Part 1, I laid out the reasons why I believe there will be a gigantic influx of extremely talented and educated business professionals buying restoration franchises in the next five years. This will follow them being displaced from their corporate roles because of AI Agents and efficiency objectives. 

If the next wave of competition is real, then the conversation shifts from awareness to action and what current restoration businesses need to do to stay ahead of the influx of new and better competition. The question becomes whether the systems, relationships, leadership, and culture are in place—or are being built now—to reward innovation and operational excellence. 

As AI and other technologies make estimating, job documentation, graphic design and code, training, communication, and reporting easier, this technical expertise becomes commoditized and more transferable. Take previous corporate education and experience, add the franchise training and resources along with the name recognition and trust of a national brand, and leverage is multiplied by 10 for the next wave of restoration business owners.  

Winners and losers from this expected expansion in competition won’t come from what they do five years from now. A company’s place in line will result from what it does today to get and stay ahead. The gap between business excellence and business “as is” widens as capital continues to become frustratingly scarce. 

Winners will spend the next five years transforming into a selling organization. Everyone—from the owner to the newest technician, to production, to office staff—is a salesperson and cheerleader for the company. Staff meetings will enforce this by utilizing a dedicated discussion topic cemented in bold at the top of the agenda. Those who consistently make the effort to add to sales regardless of their title or primary responsibility need to be recognized and rewarded. Market share will be tougher to grab hold of when there are 10 new competitors in town. Better to grab it now. 

Winners will understand the best performing companies are staffed top to bottom with A-level talent. Winners build cultures that attract high performers and then foster an environment that allows them to flourish. Top-performing companies identify what makes their best employees special and then recruit to that same standard.   

Winners will continue to invest heavily not only in their companies, but also in their teams. They will spend the dollars on continual training and allocate funds for technology that allows them to increase accountability and efficiency.  

Winners will look to the weakest of their competitors to pick off what they can in terms of employees, customers, and capital. The herd will need to be thinned out, and companies that are no longer competitive will collapse. Companies will either benefit from this shift or continue to watch it happen, potentially at their own expense. 

Losers will focus their strategy on being the cheapest option, spend months fighting to get paid instead of coming to an agreement and negotiating fairly before and during the project life cycle, hire too quickly to fog a mirror instead of mirroring a healthy culture, and not look internally to identify what went wrong when their best performers choose to wear someone else’s logo on their work shirts. 

Losers will fight battles that only banks can win. One more credit card. One more month of checks getting crossed up in the mail. Decisions will be made without understanding the long-term impacts on the P&L. Losers will spend more time explaining results than improving them. Someone to blame. Someone to say, “There’s the bad guy,” mirror be damned, all while finding scapegoats and superficial reasons they can’t add another comma to their bank account.  

There are three issues I see repeatedly: 

• Not viewing recruiting as a full-time role. Most are familiar with ABC (always be closing), but far fewer implement ABR (always be recruiting). As more restoration companies open, motivated and talented professionals who care deeply about providing a compassionate experience for their clients will have options. Recruiting is everyone’s job, and it never ends. There must be a constant thirst for great employees, and when someone stands out, every effort should be made to talk to them about coming to work at the company. 

• Becoming a commodity brand. Marketing with taglines that say 24/7 emergency service, family or locally owned, fast response, and great customer service have become throwaways. Those are standard expectations that every competitor says. Being generic means being forgotten. The companies that stand above the noise clearly communicate why they are different and why customers can trust them. If that answer is not clear, it needs to be defined. And then screamed from the mountaintop before the surrounding noise echoes only confusion. 

• Lack of attention to their numbers. Too many owners hand their financials over to a tax accountant or undertrained bookkeeper and focus only on top line sales and what’s left in the bank at the end of the month. As Chuck Violand built a career by saying, “Every number tells a story and every number begs a question.” The chart of accounts needs to be set up correctly and the financial reports need to be kept timely and accurate. The competition coming understands accounting and finance. They will leverage debt, build out complex dashboards, utilize KPIs and metrics, and manage off data and analytics.  

The competition is intensifying as increasingly sophisticated and knowledgeable players enter the market. They will have cash and an understanding of how to use it. They have been trained and educated in recruitment, management, and strategy. And by buying a franchise, they will be given systems, tools, and an established brand to support their launch. 

Established contractors possess something that new entrants cannot easily acquire—experience. Years of navigating difficult projects, managing customers, building teams, and learning through hard-earned mistakes have created an asset that cannot be downloaded, purchased, or replicated overnight. This is their head start. But it’s not the finish line. 

The opportunity now is to transform that experience into a competitive advantage by engaging with peers, consultants, and industry thought leaders, converting lessons learned through trial and error into systems, processes, and institutional knowledge that would take competitors years to develop, and turning tribal knowledge into a company’s story, culture, and operating framework. 

Companies must build standard operating procedures. They must refine their sales process, recruiting strategy, collections practices, and project management systems and invest in training, technology, and operational best practices. There may not be a single breakthrough that adds 10 points to the bottom line, but there are almost certainly 10 improvements that can each add one. Over time, those incremental gains compound into a significant competitive advantage.  

Most importantly, leadership development must be a priority. As AI automates routine decision making and corporations reduce layers of middle management, capable leaders will become increasingly valuable. The managers who understand how to lead people, drive accountability, and execute consistently will be aggressively recruited by competitors seeking to accelerate their growth. Companies that invest in developing their people today will earn something far more valuable than productivity. They will earn loyalty, engagement, and commitment. Hiring talent will remain difficult but retaining it may become the defining challenge of the next decade.  

At the same time, companies must be intentional about their destination. As franchises expand and industry consolidation accelerates, clarity of purpose becomes increasingly important. The question of whether the goal is to be an acquirer, to build the company to sell, or to create a multi-generational business designed to serve family and community long into the future must be answered. When beginning with the end in mind, strategic decisions become clearer and execution becomes more focused. 

 Of course, this prediction may be wrong. AI and advanced leadership systems may create such dramatic gains in efficiency and productivity that established contractors become stronger than ever, leaving little room for meaningful new competition. But even in that scenario, the winners will likely be the same. They will be the companies that recognized disruption early, adapted proactively, and committed themselves to becoming the best-led and best-managed versions of themselves. 

The future will not belong to the best restorers. It will belong to the best business leaders who happen to do restoration. 

The window to prepare is open today. But it will not remain open forever. 

Published in C&R Magazine