From Instagram to Google Maps, in today’s world, getting found and interacting with customers online are among the most-effective ways to build a successful business. The International Franchise Association (IFA) recently published the results of a poll in which franchisees were asked to list their most-effective channels for generating customer leads, and four of the top six involved digital marketing. Social media came in second (behind “referrals”) at 55.26 percent, followed by search engine optimization (SEO), pay-per-click advertising and content marketing. Radio and television tied for second-to-last (before billboards) at just 2.63 percent.
But, as a franchisee, your ability to market online is limited. As with all other aspects of your business, you can only say and do what is permitted by the terms of your franchise agreement and the franchisor’s operations manual. If you build an online presence in a non-compliant manner, your franchisor may force you to make changes (which could confuse your followers), it may force you to transfer your accounts and it may even declare you in default under your franchise agreement.
What Can (and Can’t) Franchisees Do Online?
So, as a franchisee, how can you market your business online? While individual franchisors’ rules and restrictions vary, some examples of potential restrictions include:
1. Approval of Advertising Materials
Traditionally, franchisors have typically required franchisees to obtain pre-approval of any advertising materials they intend to use. But, as a franchisee, you cannot wait days (or weeks) to find out if you have permission to post a photo to Instagram or send out a tweet. In today’s world, franchisors should provide their franchisees with social media-specific marketing guidance. However, this is not always the case; and, when it is, the rules are often unclear and/or skewed to protect the franchisor.
2. Use of Trademarks in Profiles
When choosing profile names and logos, franchisees are often limited to using geographically-targeted branding. If a new social media platform launches (or if your franchisor is not active on social media) and you are able to register the franchisor’s stand-alone trademark as an account name, you can be pretty sure that you will be forced to transfer it to the franchisor eventually.
3. Responding to Reviews
Online reviews are playing an increasingly-important role in customer choice. When a customer leaves a negative review, responding promptly and appropriately can be crucial to mitigating any potential reputational harm. However, franchisors’ policies (or “best practices”) often severely limit what franchisees are allowed to say – even when the facts clearly warrant a response that falls outside of the standard guidelines. For franchisors that are seeking to make way for new franchisees (or company-owned locations), “misrepresenting” the brand online in the face of negative reviews may be all it takes to trigger a default and franchise termination.
Request a Free Consultation at the Goldstein Law Firm
Are you thinking about franchise? Are you facing a dispute with your franchisor over your digital marketing efforts? If so, we can help you make informed decisions about protecting your legal rights. For a free, no-obligation consultation at the Goldstein Law Firm, call us at 202-293-3947 or request an appointment online today.
