What the Patient Protection and Affordable Care Act Means for Entrepreneurs
In a field dominated by franchises and mom-and-pop services, Ron Holt's business is an anomaly. In little more than a decade, his residential cleaning company, Birmingham, Ala.-based Two Maids & A Mop, has grown to 12 affiliate locations across five states. His goal is to create a national chain of providers.
In 2012 Holt was in the midst of opening his 13th location in Raleigh, N.C., when he learned about the impact the Patient Protection and Affordable Care Act (PPACA), commonly known as Obamacare, would have on his 160-employee business. Because he has more than 50 full-time workers, he'd now have to provide them with health insurance--not common in his industry. The mandate would cost his company as much as $300,000.
Holt decided to change his business model. Instead of continuing to expand his affiliate-owned locations, he turned to franchising; the first franchised unit opened in December 2013 in Tampa, Fla. While his profit margin on affiliate-owned stores is as high as 30 percent, it is largely eaten by health-insurance costs, he
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