Social Media Tips for Franchisors and Franchisees (from a Franchise Lawyer)
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.
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
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 email@example.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.
7 Options for Financing When Buying a Franchise
The primary difference between equity financing and debt financing is that with debt financing, you will have an obligation to pay back the borrowed sum at a stated interest rate, but you will retain control of the business; in equity financing you are giving up a part of the business to an investor or investors in exchange for their financing. The investors may claim some control of the business operations; they will also have some ownership in the assets and potentially will take a share in the earnings. You will not have a set debt obligation to repay as you would with a monthly loan payment to a bank. The investor will be taking a risk as to when and how much of the investment he or she will recoup, as well as whether there will be a return on the investment.
Where to Find Financing for Your Franchise
If you decide that you do want to obtain financing for your franchise business from external sources, you should:
Franchising Meetings & Conventions - More than a Great Party
Planning and staging a dynamic franchise convention that motivates franchise owners requires expert planning, flawless execution and the support of your entire franchise organization. We talked to experts in the industry to get some meeting planning tips that will result in top-notch franchise conventions.