Social media is a powerful marketing tool for all businesses including franchise systems. Many franchisors (and franchisees) do a fantastic job promoting their brand and engaging with their customers through social media.
However, before posting anything it’s important to understand what your franchise agreement allows you to do with social media, as well as your obligations under the law.
Franchise agreement
Most franchisors have policies about the use of social media within their franchise networks. Often, the franchise agreement will contain some broad principles about using social media, while the operations manual will have a more detailed list of do’s and don’ts. This means it’s important to review both of these documents carefully.
While some franchisors are happy to allow their franchisees free rein, many maintain strict control. You should find about what you can and can’t do on social media before you join the franchise. In particular, you should know:
- What social media platforms the system uses and who controls the content;
- whether you are allowed to create an independent social media account using the franchise name or if you will have a sub account of the franchisor’s;
- what happens to the account when your agreement ends;
- whether you will be required to share, like or adopt the franchisor’s social media posts;
- whether you need the franchisor’s approval before you post anything; and
- if you need the franchisor’s approval, what are the steps you need to take to get it (and in what circumstances can the franchisor refuse).
Your franchise agreement may also have a general clause that requires you to avoid damaging the brand or disparaging anyone in the network. This means you need to be careful about what you post about the system on the internet or elsewhere, usually even after your agreement ends.
Apart from reading your franchise agreement and operations manual carefully, the best thing you can do is talk to your franchisor about their approach and social media marketing plans. If the franchise system has a centralised marketing fund find out whether the fund is being used to produce content to advertise on social media and what resources are used for digital campaigns.
Laws to watch out for
Social media posts are subject to the same laws that apply to any other form of advertising; most notably, the Australian Consumer Law (ACL).
The ACL prohibits “misleading or deceptive conduct” including making false or misleading representations about the nature of goods or services.
If you operate a Facebook or other social media account for your business you must monitor and remove any posts including comments by third parties, that could be false, misleading or deceptive (or might breach other laws) as soon as you become aware of them. You should block anyone who posts offending content on your site or page.
In one case a medical services company operated a Facebook page and was found by the Court to have engaged in misleading conduct by making false claims about its products. After the Court banned the making of the claims, some clients posted reviews on its Facebook page which repeated the false claims. While the company did not write the reviews, it knew they were there in breach of the Court orders. The company was found responsible for publishing the customer reviews and was therefore in contempt of Court.
The use of celebrities in social media advertising (particularly Instagram) is also a potential trap. If a celebrity endorses a product without ever using it, or the business portrays the celebrity as just a customer (when they are a paid sponsor), it is likely the business will be in breach of the ACL.
The Australian Association of National Advertisers (AANA) also publishes guidelines requiring social media ‘influencers’ to indicate if a post is paid content. It is a voluntary guide but good practice to adopt.
Other laws that can trap a social media user are copyright laws (do you have the right to publish that photo or trade mark?), defamation laws and laws about anti-discrimination and racial vilification.
Privacy and data protection laws are important if you are collecting customer information. There are State based regulations for trade promotions including online competitions which might require a licence fee be paid and the competition be registered.
If you are operating your own social media account then you, (not the franchisor) are responsible for complying with the law. Breaking the law is also likely to be a breach of your franchise agreement and your franchisor will want any content removed that it considers brand damaging.
If the franchisor is running the social media marketing then it must ensure that the law is not broken. Monitoring of social media and ensuring that laws are obeyed is the legal responsibility of the operator of the account – you cannot rely on Facebook or Instagram to do this for you. An advantage of franchising is often the outsourcing of much of that responsibility, provided you are comfortable with the franchisor taking control.
In summary, however it’s important for every business to be transparent and honest with consumers including on social media and to monitor its social media pages for potentially offending content. Our advice: think before you post!
By Corinne Attard, partner and Daniel Jepson, associate, Holman Webb Lawyers Sydney