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Social Media Tips for Franchisors and Franchisees (from a Franchise Lawyer)

social media for franchises

No, these aren’t marketing tips. I can’t help you get more Twitter followers, and I can’t help direct more traffic to your Facebook page. What I can do, however, is provide information that might help keep you out of trouble while you do these things on your own.

Like any other advertising platform (and like any other aspect of a franchise system, for that matter), social media is fraught with potential legal concerns. Not only do state and federal advertising, trademark, privacy and other laws apply to social media, but social media providers’ Terms of Use can further restrict what advertisers can and cannot do on their sites. For franchisees, add the terms of the franchise agreement into the mix, and you’ve got a real set of issues to try to understand and work through before launching your franchise marketing campaign.

State and Federal Laws

A variety of state and federal laws are broad enough in scope to touch on social media advertising campaigns. False advertising and defamation (don’t make up lies about your competitors) laws are some of the more obvious ones, but franchisors and franchisees alike also need to consider issues like:

  • Using other company’s trademarks and copyrighted materials in social media posts—using logos and copy without permission can give rise to infringement claims
  • Using social media to screen employees and prospects, under certain circumstances, can give rise to privacy violations
  • Using internal social media policies to restrict employees’ use of these platforms, if done improperly, can create legal liabilities
  • Widespread use of social media can be a threat to maintaining proprietary rights in confidential information that is negligently disclosed

Social Media Terms of Use

In addition, most (if not all) social media sites have Terms of Use that govern and restrict users’ conduct on their platforms. Facebook is well-known for having one of the stricter Terms of Use enforcement programs out there. The Terms of Use are a legal agreement that you enter into by using the site. As a result, violation of the Terms of Use can lead to banishment from the site, or possibly legal action.

While many social media platforms are now marketing-focused, they still typically contain restrictions on things like the nature, scope, content, and quantity of marketing that can be done. The negative consequences of attempting to circumvent these restrictions can resonate throughout a franchise system.

Franchise Agreement Terms

Finally, franchisees must also contend with the language of their franchise agreements when attempting to develop a social media campaign. Many older franchise agreements either prohibit use of social media by franchisees or omit discussion of the issue entirely. Even where use of social media is permitted, use will typically be restricted either by express limitations in the franchise agreement or Operations Manual, or by other tangential franchise agreement provisions. For example, guidelines for use of the franchisor’s trademarks are commonplace, and the franchise agreement may require submission of all proposed “advertising materials” for the franchisor’s approval. Is a tweet “advertising material”? Probably. Where these issues are left open to question by the franchise agreement, the best practice is to discuss them with the franchisor prior to launching a social media marketing campaign.

Jeff Fabian is the owner of Fabian, LLC, a boutique intellectual property and business law firm serving new and established franchisors and franchisees in areas including drafting and enforcement of social media policies. Visit www.thefranchisecafe.com or www.fabianlegal.com for more information, or contact the firm directly at 410.908.0883 or jeff@fabianlegal.com. You can also follow Jeff on Twitter @jsfabian.

This article is provided for informational purposes only, and does not constitute legal advice. Always consult an attorney before taking any action that may affect your legal rights or liabilities.

Franchise Buyers Don’t Need a Lawyer – Yeah Right!

These excuses are usually first heard when I meet with a franchise owner who is now asking for advice regarding their dissatisfaction with their franchise relationship. Too late. That is, sometimes it is too late to help them.

What is an Area Representative?

The reason why anyone would choose being an Area Representative is that they are paid a certain portion of the initial franchise fee of each new franchisee they solicit as compensation. Aside from the sales commission the area representative may get paid by the franchisor a portion of the royalties received for servicing franchisees. In some cases, franchisors will pay the area representatives a portion of the fee received from new franchisees in the reps’ territory even though the area representative may have had nothing to do with the screening or recommending that particular franchisee. However, all these and other contingencies- such as compensation for furnishing many of the pre-opening and on-going services to the franchisee- should be covered in the area representation agreement.

Best Practices in Protecting and Enforcing Trademarks, Copyrights and other IP

Trademarks, copyrighted works, trade secrets and proprietary business information form the core of any franchise system, and are frequently a company’s most valuable assets. Trademarks, including service marks, logos, slogans and trade dress, define the brand identity as presented to the public. The “behind the scenes” business know-how on which the system is built and implemented by franchisees is embodied in a variety of copyrighted and proprietary works – operations manuals, proprietary processes, recipes and formulas, custom software, advertising copy to name a few.