In recent years, many franchisors have turned to celebrity endorsements to boost their brands’ presence on social media. While this increased exposure is ostensibly good for franchisees, franchisees may or may not want to be associated with certain celebrities for various reasons. This is especially true when the celebrities their franchisors choose are controversial—as discussed in a recent Franchise Times article.
Let’s say your franchisor has signed a celebrity endorsement deal, and let’s say you aren’t interested in using the celebrity’s image or selling the celebrity’s signature merchandise. Do you have a choice? National franchise attorney Jeffrey M. Goldstein explains.
Franchisees Must Comply with System Standards
As a general rule, franchisees must comply with system standards. This means that if a franchisor rolls out a system-wide marketing campaign based on a celebrity endorsement, franchisees generally have an obligation to comply. Since franchisors almost universally reserve the right to modify their system standards “from time to time,” the fact that the celebrity endorsement wasn’t in play when you signed your franchise agreement is likely irrelevant to the present circumstances.
Franchisees Must Purchase (and Use) Mandatory Marketing Materials
In addition to complying with system standards generally, franchisees must also comply with their marketing-specific obligations. This includes purchasing (and using) mandatory marketing materials. If your franchisor requires you to purchase and display marketing materials bearing the celebrity’s image, refusing to do so could put you in breach of your franchise agreement.
Franchisees Must Purchase (and Sell) Mandatory Products
The same goes for mandatory products. If your franchisor’s celebrity endorsement deal includes the promotion of signature products—and if your franchise agreement includes a mandatory purchasing clause—you will have to purchase the signature products to remain in compliance with your agreement. While you might not have to actually sell them, this could fall under your marketing obligations, and you will of course need to consider the financial ramifications of permanently shelving inventory as well.
What if You Don’t Want to Promote a Celebrity Endorsement?
So, let’s return to our original question: What if you don’t want to promote a celebrity endorsement?
While you most likely have an obligation to comply, you may be able to seek an exception. If other franchisees have similar opinions, you may be able to join together, and your collective voice may be less likely to go ignored. Ultimately, if you want to object to the mandatory promotion of a celebrity endorsement, you will need to take a strategic approach—and you will need to be careful to make sure you do not violate your franchise agreement in the interim.
Questions? Schedule a Free Consultation with Franchise Attorney Jeffrey M. Goldstein
Do you have questions about your legal obligations or rights as a franchisee? If so, we encourage you to schedule a free consultation at Goldstein Law Firm. To speak with national franchise attorney Jeffrey M. Goldstein in confidence, please call 202-293-3947 or request an appointment online today.
