Fast food franchises and quick-service restaurants face a unique challenge when it comes to health insurance. Before the Affordable Care Act (ACA), many franchise owners only offered coverage to their management teams, typically around 30 employees. But when the ACA’s employer mandate kicked in, that equation changed dramatically.
Now, any business with 50 or more full-time equivalent employees must offer health insurance to anyone working 30 or more hours per week. For franchise owners, this suddenly meant offering coverage to 500+ employees instead of just 30 managers. Traditional group health insurance quickly became unmanageable, both financially and administratively.
That’s where ICHRA is changing the game for the hospitality industry.
The fast food franchise challenge
The restaurant industry faces distinct hurdles that make traditional group health insurance particularly problematic.
High employee turnover. Quick-service restaurants experience the highest quit rate of any industry according to the Bureau of Labor Statistics.¹ With constant workforce changes, tracking eligibility and managing enrollments becomes an administrative nightmare.
Low participation rates. Many restaurant workers are young, earn lower wages, or already have coverage through a parent’s plan or government programs. When participation drops below 50-75%, group plan premiums skyrocket for everyone who remains enrolled.
Unpredictable renewals. One franchise group received a 50% premium increase from United Healthcare in 2024 due to low participation and high usage.² This is a common story across the industry. Another hospitality group faced a 63% renewal increase before switching to ICHRA³.
Diverse workforce needs. A cashier earning minimum wage has vastly different healthcare needs and budget constraints than a general manager. Traditional group plans force everyone into the same one-size-fits-all coverage.
Variable hours and seasonal workers. Restaurant staffing fluctuates between busy and slow seasons, making it difficult to determine who qualifies for full-time status under ACA rules.
Why ICHRA works for fast food franchises
According to Eric Consiglio, a benefits advisor who works with multiple fast food franchise owners including McDonald’s, Burger King, and Tim Hortons locations, ICHRA solves the core problem: “The ICHRA strategy really hit home for what they’re looking to achieve.”
Watch the full video here:
Here’s why ICHRA is becoming the go-to solution for franchise owners:
Budget control and predictability
With ICHRA, franchise owners set exactly what they want to pay per employee. No more surprise 40-60% premium increases at renewal. No more watching costs spiral as participation drops. The allowance amount stays stable year after year, making healthcare costs the most predictable line item on the budget instead of the most volatile.
One franchise HR director even received her first-ever bonus after switching to ICHRA because of the company’s healthcare savings.²
Employee choice and flexibility
"Most of those employees only have single coverage," Eric notes. With ICHRA, employees shop for their own individual health insurance plans on the marketplace. Young, healthy workers can choose affordable high-deductible plans. Employees with families or chronic conditions can select more comprehensive coverage. Everyone gets what they actually need instead of being forced into an expensive group plan they may not want or can't afford.
ACA compliance without the headache
For franchise owners who qualify as applicable large employers, ICHRA satisfies the ACA’s employer mandate requirements. As long as the allowance meets affordability standards (9.96% of the employee’s income for 2026), franchise owners avoid penalties while giving employees access to quality coverage.
Scalability across multiple location
Michael Yacoub, an advisor working with a client who owns 20-25 fast food chains, explains the administrative advantage: “They didn’t have to worry about participation requirements and renewals.” When you’re managing hundreds of employees across multiple locations, ICHRA’s simplified administration becomes invaluable. No more coordinating enrollments, managing claims, or dealing with different carrier requirements at each site.
Real results from restaurant franchises
The numbers speak for themselves:
- Leblon Franchising Holdings (23 Popeyes locations): Avoided a 50% premium increase by switching to ICHRA, achieving complete budget stability.²
- Palisades Hospitality Group: Escaped a 63% group plan renewal and now offers affordable coverage across all California and out-of-state locations.³
- Multi-location franchise client: Reduced health insurance costs while maintaining quality benefits for a 550-employee workforce with historically low participation.
Michael’s client was initially unfamiliar with ICHRA but became a devoted advocate after seeing the results: “She’s been an ICHRA fan for about two years, and she can’t speak more highly of Take Command.”
Watch the full video here:
Understanding the ICHRA employee experience
For restaurant workers, ICHRA provides something traditional group plans rarely offer: personal control.
Younger employees in their 20s and early 30s, who make up a significant portion of the hospitality workforce, can select basic, low-cost plans that fit their limited healthcare needs. Many pay nothing out of pocket once the employer's allowance is applied.
Employees with families can choose plans with broader networks that cover their children's pediatricians and specialists, something that's impossible when everyone is locked into the same group plan.
Workers transitioning between jobs keep their individual plans even after leaving your restaurant, eliminating coverage gaps that occur with traditional employer-sponsored insurance.
Getting started with ICHRA
Making the switch doesn't have to be complicated:
- Determine your employee classes – You can offer different allowance amounts to full-time vs. part-time employees, hourly vs. salaried workers, or employees in different geographic locations.
- Set your allowances – Decide what you can afford to contribute per employee per month. You control the budget completely.
- Choose an administration partner – Work with an ICHRA platform like Take Command that handles compliance, employee support, and reimbursements, so you can focus on running your restaurants.
- Communicate with employees – Help your team understand their new benefit and how to shop for coverage that meets their needs.
- Handle reimbursements – Employees submit proof of coverage, and you reimburse them tax-free through your ICHRA administrator.
The bottom line for franchise owners
The hospitality sector continues to face unprecedented challenges with labor costs, employee retention, and compliance requirements. Fast food franchise owners who've made the switch to ICHRA consistently report the same results: stable costs, happier employees, and dramatically simplified administration.
As Eric puts it, for franchise owners in the hospitality sector, "The ICHRA strategy really hits home for what they're looking to achieve." When you're managing multiple locations, hundreds of employees, and tight margins, ICHRA offers a strategic advantage that traditional group health insurance simply can't match.
Ready to explore ICHRA for your fast food franchise or QSR? Take Command can help your hospitality business transition to ICHRA with minimal disruption and maximum savings.
Contact our team to see how much you could save while improving benefits for your restaurant workers.
References
- U.S. Bureau of Labor Statistics. (2022). Job Openings and Labor Turnover Survey. Retrieved from https://www.bls.gov/
- Hooper, J. (2025, April 8). Inside the New Insurance Model Helping Restaurants Serve Quality Healthcare. QSR Magazine. https://www.qsrmagazine.com/story/inside-the-new-insurance-model-helping-restaurants-serve-quality-healthcare/
- Take Command Health. (2024, November 19). How Palisades Hospitality switched to ICHRA and avoided a 63% group plan renewal. https://www.takecommandhealth.com/success-stories/palisades-hospitality
Let's talk through your HRA questions
Our HRA management solutions help companies of all sizes reimburse employees for health insurance, giving employees choice over what works best for them and promoting health and wellness within an organization. We offer ICHRA and QSEHRA administration software designed to be simple, effective, and empowering. Take Command is trusted by 7,000+ leading organizations and the only HRA administrator with in-house enrollment support.
