By Peter Snell
In this column, we will look at the increasing importance of social media in franchising, the differences between social media policies and guidelines and a few examples of how negative social media can quickly damage a franchise system’s brand and reputation.
Please note it is extremely important for you to take the time to fully analyze and review any franchise agreement before you sign it. While the following information serves as a general overview, as always, you should also seek your own legal advice when reviewing a franchise agreement. Only then can you obtain specific information and recommendations relevant to your particular circumstances.
The concept of social media has really taken off in the past decade. With the emergence of such social media platforms as blogs, Facebook, Twitter, Reddit, Tumblr, Imgur and YouTube—along with rating and review sites, such as Yelp, Urbanspoon and TripAdvisor—companies are finding many new ways to engage their customers and the world at large.
While many franchisors 10 years ago viewed social media with skepticism or even fear, today they are more likely to embrace and encourage the adoption of social media as an important tool for promoting and advertising their franchise systems. While the use of these platforms offers benefits and opportunities in reaching target audiences, however, the high speed of interaction and the global availability of any information published online can present risks, too. There is the potential for social media to have both positive and negative impacts on a franchise system’s reputation.
Franchise agreement provisions
A franchise agreement today typically contains provisions controlling the franchisee’s use of social media. These provisions are often found in sections dealing with ‘intellectual property,’ where it is normal to see the franchisor putting forth its own right to establish, control and maintain ownership of all Internet domain names and websites connected with its brand. As well, the franchisor normally reserves the right to approve any content that involves its trademarks and to require the franchisee to remove any disapproved content from further display.
The franchisee will also be required to use the franchisor’s forms, disclosures and privacy statements and adhere to its policies and practices when operating both the franchised business generally and any website pages connected to the franchise, especially with regard to obtaining permission for the collection, disclosure, use, retention and safeguarding of data. As such, franchisees are often required to display these policies and statements on their web pages and when using the Internet in other manners designated or reasonably approved by the franchisor.
While this approach may appear overly restrictive, the real key is in the franchisor’s social media policies and/or guidelines.
Policies versus guidelines
Given the rapid growth of social media, many franchisors are recognizing the need to have a set of policies or guidelines to ensure franchisees who use social media—whether as part of their job or in a personal capacity—have guidance as to the franchisor’s expectations regarding customer engagement about the franchise system and its services, people, customers, suppliers, contractors, business partners, competitors and/or other business-related individuals or organizations.
Social media policies are typically compulsory and use detailed information to delineate where, when, how and what a franchisee and his/her employees can or cannot do with social media. They are akin to protocols and rules by which franchisees must abide. Hence, they are typically far more comprehensive than guidelines and provide the starting point for a franchise system’s approach to social media risk management.
Guidelines, on the other hand, are typically less detailed and more general. They are usually presented as a one-page document, with a set of company directions as to how social media is (and is not) to be used in relation to the franchise system, for the purpose of providing a quick reference tool for franchisees when in doubt as to how to behave online. For example, guidelines may provide direction as to language, etiquette and how to respond to online complaints. (Each franchise system is different in its approach.)
With guidelines, the franchiser looks to avoid any obligation to monitor or enforce the provisions. A policy, on the other hand, by its nature will lose its effectiveness if the franchisor is not enforcing it.
Both social media policies and guidelines are designed to protect the interests and reputation of the franchise system by providing direction and ensuring consistency and professionalism in how franchisees communicate about their business via social media sites and other online forms. While many franchisees may see this as approach as representing a loss of autonomy, it should also be seen as a necessary and positive step that benefits all franchisees by protecting their system’s reputation and brand.