For several years social media has kept up its position as one of the hottest topics in franchising, and in business in general. Today, most business publications include at least one standing column about social media. While its potential marketing impact has been dissected and analyzed, in franchising quite a bit of that debate has focused on whether a brand's social media presence should be controlled by the franchisor, or whether franchisees too should be able to have their own accounts and profiles on Facebook and other social networking sites.
The arguments for and against franchisee participation in a brand's social media representation vary among different franchise systems. The outcomes likely will depend in large part on how closely customer loyalty is tied to particular outlets versus the brand at large. For example, the large, national, fast-food chain that rolls out promotions nationwide without much local variation may not need or benefit from franchisees maintaining their own Facebook profiles. On the other hand, the children's day care center franchise, with customers loyal to particular outlets and marketing customized to the different locations, may have a different approach.
No matter which camp a franchise system falls into, the legal risks involved in social media marketing warrant the creation of a social media policy. The policies of systems in the different camps will have different audiences and will need to cover different legal risks.
For the franchisors that claim a monopoly for social media presence in its system, the policy will be an internal one directed to its own employees. The policy needs to ensure compliance with brand marketing protocol and procedures and cover the general do's and don't's of marketing law, trademark and copyright law, and confidentiality concerns. It must also cover enforcement in the event competitors or other parties infringe on the rights of the franchisor and the system, or other unwanted content is posted to the franchisor's social network accounts or elsewhere. These franchisors' internal policies will be similar to those of many other companies that distribute their goods and services themselves, as opposed to those relying on a network of franchisees or other independent distributors.
Franchise systems in which franchisees share the social media space with the franchisor may need two different policies: one internal for the franchisor and one directed to its franchisees. Both policies will likely be more complex than the policy of franchisors that control their brand's social media presence. This is particularly true in regard to the franchisee policy. For example, some of the issues discussed in the franchisor's internal policy may benefit from additional scrutiny and discussion in the franchisee policy. While it likely will be obvious to most franchisees that they cannot defame somebody or disclose the system's confidential information, both copyright and marketing are areas of law that may need more detailed attention. This is because the legislation in those areas is quite complex, and the distinctions between lawful and unlawful conduct can be hard to discern for a layperson.
Telling franchisees what they cannot do will be part of every franchisee social media policy, but many franchisors may find that the success of their policy will depend more on their ability to give franchisees a carrot in the form of examples of what they should do. Best practices for desired content, recommended frequency of the posts, and similar guidelines are often helpful.
The coexistence of the franchisor and its franchisees on social networking sites will require coordination and quite a bit of care. To protect the franchisor's trademarks and to avoid consumer confusion, the policy should describe how franchisees can use the franchisor's trademarks on social networking sites and how they need to distinguish themselves from the franchisor. For this reason many franchisors will require the franchisee's profile name to include some type of locator information. For example, "Franchise Day Care Chicago" or "Franchise Day Care 1900 N. Kingsbury." Contact information for the particular location may also be required.
Enforcement is possibly the most important part of any social media policy. A successful policy not only will cover how to react to legal infractions, but also will run the gamut from how to react to general, negative comments and posts all the way to comments and posts against which the franchisor and franchisees may be able to take legal action. It should provide best practices for responses that are commensurate with the degree of each infraction. Certain types of comments and remarks posted by third parties may be appropriate for the franchisee to respond to; others may be better handled by the franchisor. Franchisees should know when to report problems to the franchisor, and to whom they should report.
Enforcement issues may not always involve the relationship with third parties. Sometimes it may be the franchisor-franchisee relationship that requires action. For example, when can a franchisor require a franchisee to take down content or post specific content to the franchisee's account? What happens if a franchisee is terminated? While part of the answer to those questions may be more technical than legal, the franchisor may wish to assure that franchisee accounts are set up in such a way that the franchisor has the right and ability to post content to a franchisee's account, and to take over or take down the account of a terminated franchisee.
At the end of the day, whether a social media policy is for the franchisor's internal use or for the franchisees (or both), its preparation should be a collaboration between many different functions within the franchisor, as well as its in-house or outside counsel.
Beata Krakus is an associate in the Franchising & Distribution and Corporate Practice Groups at Greensfelder, Hemker & Gale in Chicago. Founded in 1895, Greensfelder is a full-service law firm with offices also in St. Louis and Belleville, Ill. She can be reached at firstname.lastname@example.org or 312-345-5004.
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