Managing Social Media in a Franchise System

By Marian Ngo, Lawyer, MST Lawyers

Social media, when managed effectively, can be a powerful vehicle for increasing customer engagement, increasing brand recognition and communicating promotions. A franchise brand which commands a social media following will also be appealing to prospective franchisees seeking a strong, growing brand with engaged customers. The key consideration for franchisors is no longer whether social media presence for a franchise brand is necessary, but rather, how social media should be managed and by whom?

Many franchisors choose to centrally manage their various social media platforms rather than having individual accounts for each franchised site. The benefits of this approach include having control and consistency over the franchise brand’s social media ‘voice’ and saving franchisees time otherwise spent managing individual pages. A drawback of this approach is that it does not allow for a franchised business to interact with the local community, a benefit from having locally targeted social media platforms. Franchisors may also consider a hybrid model, where the franchisor manages the corporate social media platforms and franchisees manage local social media platforms.

Whatever approach franchisors choose to take, it is important to reflect the arrangements in the franchise documentation. For example, if a franchisor intends to manage all online marketing and communications, there should be a provision in the Franchise Agreement to this effect in order to avoid disputes about whether franchisees can establish their own social media accounts in connection with the franchise.  Further, it should be clear to franchisees and employees what can and cannot be posted on their private social media accounts. For example, a franchisee or employee may inadvertently publish a post revealing confidential information about the franchise system.

Where franchisors intend for franchisees to manage social media at a local level, it is important to give attention to the following considerations and ensure that arrangements are appropriately documented in the franchise agreement or a social media policy to form part of the operations manual.

Ownership and access

• Will the franchisee or the franchisor establish the social media account?
• Will social media accounts be jointly owned or owned by one party?
• Will both parties have access to the accounts at all times?
• Upon termination or expiration of the Franchise Agreement, which party is entitled to ownership of the social media account?
• Does the particular social media platform allow transfers or assignments of social media accounts?
• Are there provisions for the transfer of ownership of the social media accounts?

Standards and consistency

• Have all potential publishers of content been appropriately trained? In addition to complying with the social media platform’s terms of use, publishers must be aware of privacy laws, consumer laws, copyright and trademark infringement, defamation laws and more.
• Will the franchisor review and approve all content before it is published?
• Is there a style guide or a policy to ensure consistency of social media handles and content? For example, the tone and length of posts, the types of images to be used, whether publishers should re-post content, etc.
• Have all users been trained on how to respond to customers via social media?

Responsibilities and liability

• Which party is responsible for responding to customer complaints and queries?
• Which party is responsible for deleting content which is unlawful or in contravention of the social media platform’s terms of use? It is important to bear in mind that a social media account owner can be responsible for misleading or deceptive posts on their account, even if those posts were written by a third party.
• Will the franchisor intervene if a negative post goes viral?
• Is the franchisee required to post periodic franchisor content, or will the franchisor be responsible for this?
• Are franchisees required to display the franchisor’s social media handles on physical marketing materials?
• Which party is liable in the event that a post causes damages, loss or provokes legal action?
• Will the costs of administering the social media accounts be paid from the marketing fund?

Franchisors should also regularly check social media platforms and search hashtags commonly associated with the franchise brand in order to ensure that there are no unauthorised accounts representing themselves as the franchisor or otherwise infringing the franchisor’s intellectual property.

For assistance with incorporating social media policies into franchise documentation, please contact our Franchise Law team by email franchise@mst.com.au or by telephone +613 8540 0200.