Published on March 22, 2013
Posted in: Blog
One of the key roles of the franchisor in any franchise system is to manage and develop its brand. The job of managing a brand has turned away from traditional forms of advertising such as billboards, flyers, and televisions commercials. Customers are now looking for information and interaction with businesses via social media. Most major franchise systems now promote themselves heavily on Facebook, Twitter, Instagram, and Foursquare, to name just a few. Ignoring social media is simply not a viable option for any franchise system. But managing a social media strategy is a particularly complex task in the franchise context. Individual operators will naturally use social media to promote their businesses, but brand recognition depends upon uniformity and coherence in marketing efforts set by the franchisor.
Due to the explosion of social media platforms, it has become increasingly common for franchise agreements to regulate the use of social media at the outset of the franchise relationship. These policies touch upon fundamental aspects of franchising and they must be given careful consideration before being embedded into a standard form agreement. Tight controls, or outright prohibitions, on the use of social media by franchisees could detrimentally affect franchisees’ ability to promote themselves. Once enforced by the franchisor, these restrictions could potentially run afoul of the duty of fair dealing, in provinces with franchise legislation in place.
In practice, franchisors need to develop social media guidelines that grant franchisees the necessary leeway to use social media effectively without diluting or confusing branding efforts. These guidelines need to practically address who will be responsible for social media and what types of messages will be broadcast. These policies must be also consider that social media only works when it is lively and interactive.
For several years now, employers have been implementing policies for their employees’ use of social media, and similar considerations are being adopted in the franchise context. While franchisors have been slower to address social media concerns, several court cases in the employment context have provided examples which can be easily adopted into franchise agreements. For example, franchise agreements should contemplate those uses of social media which are beneficial, such as raising awareness of promotions or addressing customer complaints, and those that are unacceptable, such as making disparaging comments about competitors, co-workers, or the franchise-system itself.
When applied correctly, an effective social media policy will also be compliant with the laws regulating franchising, technology, and free expression. Franchisees will retain the freedom to use new technologies to interact with their customers while respecting and advancing the franchisor’s vision for the brand. Implementing an effective social media policy will be largely an issue of creating reasonable restrictions which are compliant at law. Experienced franchise counsel can be key to finding that balance in a particular franchise system.