The franchise industry is at a critical juncture. Franchisors and franchisees alike are struggling to balance the rising costs of healthcare with the need to maintain operational excellence and employee satisfaction to deliver exceptional customer experience. The escalating healthcare costs, driven by double digit insurance premium hikes, lack of fully insured carriers willing to provide coverage when the majority of the full-time employees are not financially capable of selecting health care coverage, barriers of access to primary care, proliferation of mental health services and medication costs, are compounded by staffing shortages and the complexities of providing consistent coverage across multiple locations.
As the costs of High Deductible Health Plans rise, many employees become “functionally uninsured (Forbes article),” leading to absenteeism, presenteeism, reduced productivity, lack of engagement and increased turnover—factors that erode profitability and threaten the sustainability of franchise operations.
The Stark Reality of Healthcare Coverage
The challenges of providing healthcare coverage are particularly acute for multi-unit franchisees. High-deductible health plans, often the only affordable option, leave many employees “functionally uninsured,” avoiding necessary care due to prohibitive out-of-pocket costs. Care avoidance leads to worsening health issues, increased absenteeism, and a drop in overall productivity. Regulatory pressures exacerbate these financial strains; under the Affordable Care Act, franchisees must provide healthcare or face significant penalties, potentially up to $2,000 per full-time employee annually. For a multi-unit operator with 60 employees, this penalty alone could reach $120,000 per year. Moreover, inadequate benefits contribute to higher turnover rates, with recruitment and training costs spiraling between 16 to 20 percent of an employee’s annual salary.
The Cost of Turnover: A Silent Threat
Employee turnover and attrition are pervasive issues in the franchise industry, especially within fast-food franchises. The typical hourly team member turnover trend is 225 percent with some locations as high as 500 percent annually, leading to severe financial and operational impacts. Every time an employee leaves, franchisees face costs amounting to approximately 33 percent of the worker’s annual salary due to recruiting, hiring, on-boarding, training and reduction in productivity until the new employee is properly trained. This cycle not only drains financial resources but also disrupts productivity and customer service, ultimately affecting the franchise’s bottom line. High turnover also demoralizes the remaining workforce, further exacerbating the problem. Addressing these issues is crucial for maintaining a stable, efficient operation and preventing employees from leaving for competitors offering better perceived compensation and benefits.
Integrating a Culture of Health and Caring
In response to these challenges, leading businesses are adopting a “Culture of Health and Caring” as part of their corporate strategy. This involves creating an environment where employee well-being is prioritized through comprehensive wellness programs, mental health support, and flexible work arrangements. Companies that have embraced these cultures report significant benefits, including reduced healthcare costs, lower absenteeism, and improved employee engagement. In the franchise industry, where turnover is high and margins are thin, cultivating a culture that cares about employee health can be a game-changer. Employees in such environments feel more valued, leading to greater loyalty, productivity, and retention—key factors in driving business success.
Revive: An Innovative Solution for the Franchise Industry
The Need for a New Healthcare Model
Traditional health insurance models are no longer enough. Franchisees face increasing administrative burdens, complex regulatory requirements, and the ever-present challenge of retaining a workforce that is both healthy and productive. It is clear that the Franchise industry needs a new model—one that reduces costs, simplifies administration, and enhances employee well-being.
Introducing Health Assurance
Revive is leading the charge with its Virtual-First Whole-Person Care model. As a pioneer of a new category called Health Assurance, Revive is transforming how franchise owner operators (like Krispy Kreme) are improving employee well-being, reducing turnover, and lowering healthcare costs—all leading to stronger financial performance. and employee well-being.
Key benefits include:
- Combatting Healthcare Cost Inflation: Revive’s membership model offers on-demand access to high-quality primary care, urgent care, mental health services, and pharmacy care—with free home delivery of over 1,000 generic medications. By keeping employees healthier and reducing care avoidance, employers can lower their overall healthcare spend and reduce turnover.
- Supporting Functionally Uninsured Employees: With many employees burdened by high-deductible plans, Revive fills the gap by providing first-dollar coverage with no out-of-pocket fees, deductibles, co-pays, or co-insurance. This ensures that employees can access the care they need without financial barriers.
- Improving Access to Care: Record wait times for doctors and therapists mean that care avoidance is rampant. Revive’s nationwide network of board-certified providers and behavioral therapists offers on-demand virtual consultations, ensuring timely access to care and reducing the need for employees to take time off work.
- Simplifying Healthcare Navigation: Healthcare complexity can overwhelm employees and employers alike. Revive streamlines the process by offering a one-stop solution for whole-person care, simplifying navigation and improving outcomes.
A Call to Action for Franchise Leaders
Franchise leaders, the time to act is now. The challenges of rising healthcare costs, employee turnover, and reduced productivity are not just financial—they threaten the very core of your business. Revive offers a path forward—a way to reduce costs, improve employee health, and drive operational excellence. Don’t wait until the crisis deepens; take-action today to secure the future of your franchise. By embracing a Culture of Health and Caring, starting with Revive, you can transform your business and ensure long-term success. To learn how you can lead this cultural revolution in your franchise, please contact Dumoff at: mdumoff@revive.health
Mark Dumoff, Co-Founder, Revive, is a visionary entrepreneur and executive leader on a mission to provide everyday consumers with virtual-first access to affordable, high-quality whole-person care; Bring Healing to the Home to children battling cancer by creating Dream Bedrooms in their home through his non-profit foundation Healing Spaces; and revolutionize the standard of opioid withdrawal and recovery care enabling more people suffering from addiction to revive their health and well-being.
Dale Herb, Transformational Human Resources Executive and Business Partner with extensive experience with multi-unit Global Corporate and Franchise Brands providing collaborative Human Capital solutions in conjunction with David Ulrich Associates Leadership Excellence Acquisition Partners (L.E.A.P.).