When Tweets, Posts and Blogs Aren’t Controlled or Properly Voiced

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The power of social media is clearly here to stay. But used properly, it can be a very effective tool to increase brand recognition for franchise businesses.

By Amy Cheng

Fourteen characters — “#AlexfromTarget” — generated more buzz than any advertising created by the big box retailer itself going into the 2014 holiday shopping season.  The ALS Association earned unprecedented awareness last year and more than $115 million in donations from the Ice Bucket Challenge that went viral on social media platforms including Twitter, Facebook and Instagram.  These examples prove tweets, posts and blogs are powerful tools and marketing today depends on engaging customers in a two-way conversation through social media. Although amazing results can be accomplished through social media, the chatter can cause more harm than good if a brand does not properly control its message.  Franchise systems encounter an additional layer of risk and opportunity, so a clear online strategy is critical to retaining ultimate ownership of the brand and message by the franchisor while also harnessing the power of its franchisee network to encourage awareness, brand participation and ultimately sales. To effectively accomplish these dual goals of brand control and network engagement, a franchisor’s social media strategy should include policies that the franchisor’s employees, franchisees and their employees must follow.

Franchisees

What happens if a franchisee’s customer tweets a complaint about his experience?  Should the franchisee respond?  Should the franchisee acquire the franchisor’s approval before it responds?  Or should the franchisor respond on behalf of the franchisee? While there is no right or wrong answer, the answer should be the same every time. To ensure that it is, every franchisor should have a policy in place to handle these questions.  In creating a social media policy, here are some things to consider:

1. Should franchisees be allowed to participate in social media?  As the digital world begins to rival the physical world in terms of strategic importance, a franchisor may substantially increase its social media presence and impact by encouraging or even requiring its franchisees to participate in social media.  However, a franchisor could quickly lose control of the uniformity of its brand and image if it simply allows franchisees to participate in social media without some guidance.  Accordingly, a franchisor should always have some level of control over the content.

2. How much freedom should the franchisees have?   A franchisor should consider outlining how social media campaigns can be run.  For example, a franchisor may want to dictate how, when and where franchisees have a presence, as well as limit the social media platforms it authorizes franchisees to use.  In some circumstances it might make sense to specify the preferred or authorized vehicles or to state clear guidelines about the operation and presentation of platforms (blogs, Twitter accounts, Facebook pages, etc.) if not directly controlled by the franchisor.

3. What will the consumer experience be like?  When interacting with franchise businesses, customers expect a seamless brand experience regardless of geographic location. This includes their experience on social media.  Most franchise agreements provide that franchisees may not use any advertising materials not previously approved by the franchisor.  However, many franchise agreements are still silent about a franchisee’s participation in social media.  For many franchise industries, social media may be the most effective vehicle to advertise and promote the brand. Therefore, it is crucial that the franchisor provide specific guidelines with respect to franchisees’ social media participation.  Guidelines should be drafted in recognition of the fact that effective use of social media can turn an unhappy customer into a brand advocate while poor handling of a customer complaint on social media can be disastrous.

4. Who owns the social media? There is little judicial guidance regarding whether the franchisee or franchisor owns social media accounts and access to their followers or subscribers.  Therefore, if the franchisor allows a franchisee to initiate its own social media account, the social media platform will generally recognize the franchisee as the account owner even though the franchisor may own the trademark.

5. What happens to the social media platform at termination or expiration of the franchise agreement?  Many popular social media platforms grant non-exclusive and non-transferable licenses to account holders.  Therefore, if the franchisee created the page or account and refuses to transfer it when the relationship ends, it can be very difficult for the franchisor to gain control.  Considering this, franchisors may consider approaching social media accounts in the same way they would a trademark or domain name registration. The franchisor would create the “account” for the franchise location, but allow the franchisees to access it and use it on a day-to-day basis.  To retain this right, franchisors should clearly retain this right in the franchise agreement.

6. Is the franchisor risking vicarious liability?  The only way to totally control social media for the entire franchise system would be to prevent franchisees from interacting in any way on social media. This obviously carries significant risks which franchisors should consider.  For example, a franchisor prescribing business-use policies or personal-use guidelines for franchisees to use with their own employees might create an unwanted status as a joint employer. A franchisor who responds to customer complaints on behalf of its franchisees may be assuming vicarious liability with respect to the franchisees’ customers. While the creation of a social media policy may seem daunting, franchisors should keep in mind that such policies are not written in stone.  Just as social media itself will evolve so can and should its policies.  Franchise agreements are often outdated in terms of social media marketing, so franchisors should consider updating their agreements to incorporate the social media policy by reference.  In doing so, there is a great opportunity for franchisors to tie social media policy to other obligations such as confidentiality and general marketing obligations.

Internal Corporate Policies

Comments on social media by a franchisor’s own employees also have the potential to be problematic, so franchisors, like all businesses, should consider an employee business-use policy prescribing the following:

  • Ownership and administrative rights for all social media accounts;
  • Roles and duties of people managing the social media;
  • Policies to avoid inadvertent sharing of confidential information;
  • Guidelines for when public communication should be approved by legal (particularly in heavily regulated industries like health care);
  • Damage control policy and procedure; and,
  • Rules for conversations with potential franchisees (to avoid improper misrepresentations).

In addition, franchisors may want to include social media terms in the employment contracts of key individuals involved in social media development (such as confidentiality and non-compete provisions). Guidelines and training regarding acceptable use of social media in the workplace are important.  While employers obviously cannot control their employees’ personal use of social media, employers can prevent offensive posts and comments by their employees during off-duty hours if it in any way relates to the employer or adversely affects the goodwill of the brand.  For example, ensuring that personal use of social media does not reference the employer (like requiring that the company name not be used in a Facebook account or Twitter handle) can go a long way toward preventing harmful posts. Employers may also wish to convey that they will or can have the right to monitor employees’ social media pages.  This can often provide needed leverage in a dismissal and shield the employer from an unfair dismissal claim if the post or blog in question is a terminable offense. The power of social media is clearly here to stay and, properly used, can be a very effective tool to increase brand recognition for franchise businesses.   Improperly used, however, even the most seemingly insignificant posts can damage a brand.  Franchisors who choose to participate in social media should be prepared to effectively control brand messaging by implementing policies to be followed by both franchisees and employees.

Amy Cheng is a co-founding partner with the Chicago law firm of Cheng Cohen LLC and represents franchisors on the structuring and operation of their franchise programs through all phases of development.    

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