Restoration’s Next Wave of Competition

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

Part 1

Many restoration professionals I speak with are quick to point out how competitive their market is. Case in point: Long Island, NY, where the total population is about 2.92 million. With a slight exaggeration, I believe there may be upwards of 9.22 million restoration companies on that island. I think they build Rainbows on top of SERVPROs out there. It’s that crowded.

But here’s the part most people aren’t thinking about. I also believe there is about to be significantly more competition entering the restoration space across North America in the next five years through franchising. The dream job in this industry might just be in franchise sales. The reason, just like so many other things being upended right now, is AI.

The World Economic Forum projects 22% of all jobs will be disrupted by 2030, with 92 million roles replaced. I think that may be a conservative estimate. A large percentage of those roles will be entry- and mid-level management positions at large corporations. White-collar workers are about to lose their shirts. 

Knowledge-based roles, entry-level professionals, customer service, data entry, administrative roles, analysts, coordinators, and mid-level managers will see their positions consolidated or eliminated with expanded utilization of AI agents.

So where are they going to go? Not back into another corporate role where each promotion simply places them in the path of the next wave of efficiency-driven staff reductions. They will take their careers into their own hands and find service-based roles that AI can’t replace, including plumbing, electrical, and yes, disaster restoration. They will be their own boss. Die hard with a vengeance.

This is what franchises were made for. Smart people who want help getting a business off the ground partner with a centralized resource and network to provide a faster path to success. In fact, it’s already happening. FRANdata/IFA shows home-service franchise units growing at a 3.7% compound annual growth rate since 2021.

AI will destroy many people’s confidence that a corporate career is a safe long-term bet. And those talented individuals will bring with them capital, sales skills, classroom and business education, strong financial literacy, and business experience. The days of being a great restorer who happens to own a business are over. Welcome to the world of smart businesspeople who happen to own a restoration company. 

For a preview of what this looks like, think less “new guy figuring things out” and more “operator with something to prove.”

The workforce displaced by AI today will become the most proficient users of it tomorrow. Having been trained by and worked alongside the very technology that reshaped their roles, they will bring firsthand experience and practical expertise to their next opportunities. Rather than viewing AI as a threat, they will leverage it as a strategic asset, applying a deep understanding of its capabilities to drive greater efficiency, productivity, profitability, and overall performance.

These people may not know restoration. But they will understand how to run a business:

• AI and automation
• Sales and sales management
• Data analytics, cash flow, and Power BI
• Process engineering and improvement
• Customer experience and service
• Recruiting systems
• Digital marketing strategies and tracking
• Capital allocation and leveraging debt
• Collections and cash flow management
• Effective negotiation

Now add a national franchise brand behind them and a chip on their shoulder from being cast aside, and the result is a competitor that will keep established contractors up at night. But not just one—there are a lot of them coming, competing for customers, profits, and top-performing employees.

Imagine a Fortune 1000 Regional Sales Director loses her job. After speaking to a franchise coach, she decides helping people in their time of need is her true calling, and she buys a restoration franchise. Pick a color: green, yellow, blue, red. It doesn’t matter! She doesn’t know the S500, but she does know the following:

• How to build dashboards and utilize AI-provided metrics
• How to run and manage off KPIs
• Business strategy and financial proformas
• How to recruit and retain top talent
• How to manage accountability and performance
• How to sell the living daylights out of anything and manage others to do the same

Her competitors may have a 20-year head start, deep technical expertise, and decades of “That’s the way we’ve always done it.” But does that experience alone create a moat wide enough to keep the wolves at bay? 

Doubtful.

She will learn the S500. She will hire certified professionals. She will embrace the technologies and efficiencies that continue to redefine the industry. The real question is not whether she can catch up, but whether today’s established contractor can continue to pull ahead.

If I’m right, there are really two threats on the horizon: more competition and better competition. What matters next is how companies choose to respond.

In Part 2 of this series, I’ll expand on what the winners and losers of tomorrow will spend their time on over the next five years as this influx of talented competitors hits the market. Which will you be?

Published in C&R Magazine