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Franchising

FRANCHISE ORGANIZATIONS SHOULD ENTER SOCIAL MEDIA WITH EYES WIDE OPEN

By Doug Imholte

August 28, 2012

With nearly a billion active monthly users, Facebook has become an incredible tool to reach a great number of people quickly and informally on myriad subjects. Franchise businesses are using this and other social networking tools to effectively communicate their message and build their brand because they provide a low cost medium to reach a large targeted audience.

Franchise organizations should enter social media with eyes wide open.While social media can be a great tool, (I'm using it right now) it is not without risk to your franchisees and franchise system. Social networking can present risk in many ways to a franchise business. First you have the concern with employment issues. There are reports that over 80% of employers use social networking sites, such as Facebook or LinkedIn, to screen prospective employees. If you are going to use social networking sites to screen or provide reviews on employees, you should—at the very least—remain consistent and fair in your approach or you could expose yourself to discrimination lawsuits. For example, you should not make a hiring decision about one potential employee based on party photos on their homepage if all of your hiring managers do not follow the same practice. I was at a client’s annual convention recently, and the issue of using social media to hire was discussed. I witnessed firsthand how franchisees were using were disparate. This inconsistency opens them all up to potential EEOC claims.

The use of social media also brings about cultural risk whether or not you, as the franchisor, or your franchise owners actually participate. The fact is that employees will and do use social media so you ought to consider how, or if, you guide or control employee use of social networking sites during work hours. How do you monitor when and how employees can access their personal social networking sites? Clearly, it is fairly simple to say employees are not allowed to access these sites using company-owned tools, but what about smartphones? When an employee is on break, how do you say they cannot access their Facebook page? Do you have rules on who can post, and what can be posted on social networking sites? These are all considerations that can at the least influence culture or, worse yet, result in employee suits against the organization and management.

Even more challenging, and sometime much more dangerous, is what employees do while away from work. Current or former employees can inflict serious damage on your brand and/or franchisees. One concern is the great potential for personal injury allegations to your business for online posts by current or former employees. They may defame your competition or even you by making claims about your or your competitors’ products, services, management style or working conditions in your stores. These posts could be made with all good intent by your employee, and actually may be true, but nonetheless could present a huge liability to your business.

As we’ve discussed, social media is opening up many more ways to attract new employees and enable those employees to communicate with colleagues and customers. Especially because these channels are so open and transparent, it is vitally important that your franchise organization do two things:

  • Develop a social media policy for your franchise and make sure it is consistently followed throughout the life cycle of your employees, and
  • Review your current Employment Practices Liability policy to make sure it is up to date with current exposures.

The social media genie is out of the bottle; the risk to your business and brand is great if you don’t address this new platform. But it also presents tremendous benefits, such as new ways to communicate with your employees and customers if done properly.

Read more about the legal implications of social media and social media policies on franchise business in an article by Attorney Meredith Bauer of EntrePartner Law.