Franchising & Social Media

…it is a good idea for franchisors to develop social media policies, and for franchisees to ensure that those policies are not too restrictive.

The National Post
October 25, 2010

Franchising & Social Media
Chad Finkelstein

Chad_Finkelstein.jpg

It makes sense for franchises to have profiles on forum such as Facebook, Twitter and MySpace REUTERS/Thierry Roge

Whether you are a franchisor or a franchisee, the realities of social media likely already affect you. Franchisors need to determine whether, from a marketing perspective, it makes sense for them to have profiles on forum such as Facebook, Twitter and MySpace. Many already do, but depending on the nature of your business, it is not always an ideal method of promotion.

If that type of online marketing suits the strategies of the franchise system, then the next question to ask is whether franchisees should be permitted to have their own social media websites – for instance, a Facebook page for that particular franchised location. The franchisor will need to decide whether the benefits of widespread marketing on these popular websites outweigh the costs of giving its franchisees that much control over advertising the brand.

Accordingly, it is a good idea for franchisors to develop social media policies, and for franchisees to ensure that those policies are not too restrictive. If you are an existing franchisor or franchisee, your franchise agreement likely already states that franchisees cannot conduct any internet advertising without the consent of the franchisor. While that may have made sense at the time it was drafted and agreed to, the practical realities of business today means that franchise law in Canada has to evolve to reflect new technologies and marketing platforms.

As a result, franchisors should consider adding social media policies to their standard agreements, and franchisees should consider requesting them where they do not already exist, so that the franchise system as a whole can benefit from this new world of online marketing.

Chad Finkelstein is a franchise lawyer at Gowling Lafleur Henderson LLP in Toronto.

http://business.financialpost.com/2010/10/25/franchising-social-media/


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