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WELCOME TO OUR WEBINAR FRANCHISING AND SOCIAL MEDIA 201 Thursday, December 10, 2009 Richard Morey and Jennifer Baumann *This webinar is offered for informational purposes only, and the content should not be construed as legal advice on any matter.
Transcript

WELCOME TO OUR WEBINARFRANCHISING AND SOCIAL

MEDIA 201

Thursday, December 10, 2009

Richard Morey and Jennifer Baumann

*This webinar is offered for informational purposes only, and the content should not be construed as legal advice on any matter.

Social Media Webinar 201 2

I. Introduction – Overview

II. Social media policy for company-owned store employees

III. Develop social media policy for franchisees

IV. Social media and franchise sales

V. Administering new policies and guidelines

VI. Conclusion

Franchising and Social Media 201 Outline

Rick Morey

PartnerFranchise and DistributionChicago

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 3

Introduction – Overview

201-level course

Focus on use of social medial to interact with customers and franchisees, although there are many other uses

Develop social media policy for company store employees

Develop social media policy for franchisees

Develop rules for using social media in franchise sales

Develop framework and personnel to administer policies

Suggested best practices, but law and technology are changing constantly

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 4

Social media guidelines for employees

A “policy” for employees’ business-related use of social media vs. “guidelines” for employees’ personal use of social media

GuidelinesConcerns over first amendment/free speech

Stale, out-of-touch employer, if the franchisor tries to regulate the personal social media of its employees

Practical concerns about how this could be accomplished or enforced (i.e., what sites are employees using?)

Policy vs. Guidelines

Jennifer Baumann

Technology, Sourcing and Commercial – Chicago

Social Media Webinar 201 5

Social media guidelines for employees

Promotions vs. Personal Use Employees are not to reference the company or the brand (if an employee does reference/promote company, then it is considered business-related social networking)

For example:Personal Facebook page can reference the company as an employer, but that’s itBrand/trademarks should not be part of the employee’s Twitter handle

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 6

Social media guidelines for employees

Non-binding guidance as to employees personal social media

For example:

Comply with social media sites terms of use

Do not disclose confidential information

Do not disparage competitors

Remember the information you post is around forever and can be found by future employers

Consider all your favorite clichés

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 7

Social media policy for companies

Uses for business-related social media to communicate with customers are almost limitless

For example:Promotions/marketing

Tweets on upcoming specials at particular locationsConducting surveys

Customer relations: @comcastcares

Finding talented employees

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 8

Social media policy for companiesBrand strategy

Franchisors should consider strategyDo you want multiple branded Facebook pages or Twitter handles?

Consider using the same strategy as for domain names and website

Always direct traffic back to the brand’s main site: Protects data ownership and privacy concerns

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 9

Legal considerations for marketing through social media

Developing social media policy for employeesAdvertising and endorsements

“Cewebrities” are the new celebrities

FTC guidesWho should be authorized to tweet or post blogs?Employees or third party reviewers“Results not typical”

Illegal Lottery

FTC Guides

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 10

Twitter promotions

Promotions with conditions to Entry:“Win a free $100 gift certificates if you RT this message!”

Contests:“What’s your best memory at our restaurant? Best entry

wins free breakfast. Use the hashtag # to enter”

These are both promotions and sweepstakes governed by state laws with no full rules attached, eligibility requirements, timing requirements, etc.

Consider using Twitter to promote a contest or sweepstakes, but drive traffic back to website that contains full rules and sufficient opportunities to win

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 11

Right to implement social media policy for franchisees

Most franchise agreements allow franchisors to establish standards and policies for franchisees’use of social media

Provision prohibiting use of marks in any medium without consent

Provision requiring prior approval of marketing materials – waived if franchisee complies with policy

Older agreements allow franchisor to set standards

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 12

Communicating policy to franchisees

Policies should be formalized somehow, but are likely to change frequently

Part of manuals, if they are on extranet and/or updated frequently

System-wide e-mail is softer approach

Review franchise agreement to ensure that the policy is binding on the franchisees

Manuals or System-wide E-mail

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 13

Develop social media policy for franchisees

Start with policy for company store employees

Balance benefits of brand control with increased risk of vicarious liability

If franchisee disparages competitor, having policy in place that prohibits disparagement increases risk of franchisor liability

Most times, potential damage to brand outweighs risk

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 14

Personal use of social media by franchisees

Concerns over regulating personal social media use by employees applies for franchisees too

Policy for business, guidelines for personal

Recommend, but do not require, that franchisees adopt guidelines for their employeesRick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 15

Social media and franchise sales

Using social media to communicate with prospective franchisees:

Communicating new financing options, additional franchisor services or other changes in program

Highlighting development in new areas or particular sites that would be well-suited for the brand

Highlighting new area or franchise sales

Brand appears fresh, current and on top of latest technology

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 16

Social media and franchise sales

FTC rule has guidelines for e-disclosure, but no laws cover social media.Allow only sales staff who have been trained on franchise law issues to use social media to communicate with prospective franchiseesFirst concern: Must social media “advertising” be submitted to the registration states (CA, MD, MN, NY, ND, RI and WA) for approval?

2001 NASAA policy exempts website “advertising” if (a) URL on FDD and (b) ad not directed to state.One approach: put URLs on FDD and make passive

Disclaimer/statement on Facebook sign-on Do not require prospects to disclose home state

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 17

Social media and franchise sales

Second concern: If franchise sales staff communicates with prospect in state where franchisor is not then registered, is this an illegal “offer” of a franchise in that state?

Minimize risk with registration in all states

Practical approachDo not require prospects to disclose home state when signing on as friend or followerWhen sales staff has direct contact with prospect, find out home state and, if registration is not effective, send clear e-mail

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 18

Social media and franchise sales

Third concern: Financial performance representations (FPRs) in social media.

FPR – Specific level or range of actual or potential sales, income or profits. Generally, FPRs must be in FDD

Sales staff can make FPRs in social media, like other advertising, if FPR is in FDD (except MD and MN)

What if existing franchisee posts FPR on brand’s Facebook page? Is this information from franchisee or franchisor?

Be clear that posts are responsibility of authorSection 230 immunity under the Communication Decency Act limits responsibility if host does not develop content or solicit input. Analogy to franchise contextStill, probably best to remove post as soon as possible

Restrict the use of social media in franchise sales efforts

Rick Morey

PartnerFranchise and DistributionChicago

Social Media Webinar 201 19

Continuing Education Credit Code

For those attorneys seeking MCLE credit for participating in this webinar, please use the following code on your request for Certificate of Attendance:

G293907392

Social Media Webinar 201 20

Administering and monitoring social media policy

Designate a point of contact in the companyRequirement for point of contacts:

Must be familiar with and use the social media technologyMay not be the person who develops or updates the content.

Consider hiring a social engagement or community manager

Create a mechanism for reporting their social media activities to the coordinator

Invest both time and money in technologyConsider using any and all mechanisms to drive traffic to the company-owned website

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 21

Conclusion

Social media is not a passing fadNew part of culture

Embracing social media What it does and does not do

Finding ways to control the use of the media in a way that enhances the brand, but hopefully avoids the legal pitfalls, should be the goal

Jennifer Baumann

Technology, Sourcing and Commercial - Chicago

Social Media Webinar 201 22

Questions?

Thank you!


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