ICHRA for franchises & franchisees

Why ICHRA fits franchises

A franchisee is a small-business owner running one or more units — restaurants, fitness studios, retail, home services — typically with hourly, part-time-heavy staff and thin margins. The franchisor sets the brand but usually doesn''t provide health benefits, so it''s on the owner. Group plans need participation minimums and raise premiums yearly — hard for a franchise unit. An ICHRA lets a franchisee set a fixed allowance, have staff buy their own individual coverage, and reimburse tax-free, with no participation minimum.

The franchise benefits challenge

• Hourly, part-time-heavy staff and high turnover.
• Thin unit-level margins that can''t absorb premium hikes.
• Multiple units, sometimes across markets or states.
• No health benefits from the franchisor — it''s the owner''s responsibility.
• A tight labor market where benefits help you keep good people.

How an ICHRA works for a franchisee

Set a monthly allowance — flat, or varied by class (full-time, part-time, by unit or location) and by age and family size. Staff choose an individual plan, submit proof of coverage, and you reimburse tax-free through payroll. Because you only pay against substantiated coverage, your real cost tracks who enrolls — and it''s consistent across every unit.

Multiple units and locations

An ICHRA works the same across all your units, because employees buy coverage in their own area rather than sharing one group plan. For multi-unit franchisees, that means one benefit structure everywhere, with predictable per-unit cost — no juggling separate group plans by location.

Full-time and part-time staff

Franchise units run on a mix of full-time managers and part-time hourly staff. ICHRA''s employee classes let you offer full-time staff one allowance and part-time workers another, within IRS rules — so you can offer a meaningful benefit where it aids retention without committing to cover everyone at the same level.

A system-wide option for franchisors

Some franchisors are looking for a benefits solution to recommend across their system without taking on a group plan''s liability. Because an ICHRA is set up per franchisee (each is a separate employer) but follows a consistent model, it can serve as a system-wide framework franchisees adopt individually — a way for a brand to help units offer benefits without underwriting them.

ICHRA vs a group plan for franchisees

A group plan''s participation minimums are nearly impossible with part-time-heavy franchise staff, and premiums pressure thin unit margins. An ICHRA gives fixed costs, no participation minimum, and coverage employees choose — consistent across units. For most franchisees, it''s the more workable and affordable model.

A realistic example

Illustratively, a franchisee with 20 staff across two units offering $300/month budgets about $72,000/year — but because you only reimburse enrolled, substantiated employees, real cost tracks participation, at an allowance you control per unit. Actual figures depend on your setup and enrollment.

Common concerns franchisees raise

• "The franchisor doesn''t provide benefits" — an ICHRA lets you offer them yourself, affordably.
• "Part-time-heavy staff" — no participation minimum; classes let you target benefits.
• "Multiple units" — one ICHRA structure works across all of them.
• "Thin margins" — you set the allowance; there''s no renewal spike.

The ACA mandate for larger franchisees

Franchisees with 50 or more full-time-equivalent employees (counted across your commonly owned units) are subject to the ACA mandate, which an affordable ICHRA can satisfy. Smaller franchisees aren''t required to but often offer benefits to keep staff. A broker confirms how the count applies to your units.

Getting started

Confirm eligibility and how the FTE count applies across your units, decide your allowance and classes, send the required notice, and help staff enroll. A broker handles the plan document, compliance, and enrollment across every unit.