The Benefits of Franchising and The Affordable Health Care Act

If I franchise my business do I need to be worried about the Affordable Health Care Act?  This is a GREAT question! As you follow current events, there is always coverage of The Affordable Care Act, its enrollment numbers and, of course, its pros and cons. Most of the updates are directed towards individuals, though there are certainly important elements that apply to businesses as well. For example, if an employer has 50 or more employees, they are required to offer health care. This requirement falls in line with the Family Medical Leave Act, which has been around for many years. Get more facts on the Affordable Health Care Act by reading this article.

I Really Need to Get More Locations Out There

Business growth is a great problem to have especially when you are faced with the demand of needing to get more locations out in the marketplace. When your business experiences growth, there may be additional regulations that you need to comply with on many levels. Expansion through franchising is no different, however franchising your business in an effort to get more locations open may present an alternative to having to comply with the Affordable Care Act. Let us give an example:

Frank has a retail business that is growing. He already has four locations, each with about 10 employees. If he opens a 5th location, he will certainly have more than 50 employees, which subjects him to having to comply with the Affordable Care Act. He starts to give some serious thought to franchising as an alternative compared to opening more stores himself.

Franchising to the rescue…. yep franchising is a GREAT strategy! Why? Because when you franchise your business, each operator (franchisee) owns and operates his/her location(s) separate from your business. That’s right! Each franchise location is independently owned and operated. Each franchisee creates his/her own separate entity (e.g. LLC, S-Corp, Corporation, etc.); thus, you (the franchisor) have NO ownership of the franchisee’s business so the number of employees your franchisee employs in his/her business has no affect on you (of course, there is a franchise agreement in place that defines the relationship between you and the franchisee, but that’s for another discussion).

So let’s revisit “Frank” in our example above. If he decides to franchise his retail business, then he would have locations out there being run by independent operators (franchisees), all providing more exposure, creating more branding; therefore alleviating his (the franchisor’s) concerns about hitting the 50+ employee headcount mark. His franchises, all independent owned and operated, do not have to worry about the Affordable Care Act unless they themselves have 50+ employees, which is unlikely.

Now You Know

So franchising offers yet another benefit to business owners! Are you a business owner whose business is having a growth spurt? There are many advantages to franchising including strategically addressing the Affordable Care Act! Contact Us and The Franchise Maker will help you understand how franchising can help leverage and grow your business at the same time!