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The Franchise Memorandum

Social Media and Legal Issues

“Social media” refers to online tools or Web sites that allow interaction between the Web site operator and Web site users, or among users, and usually permit user-generated content to be posted. Examples of social media include Facebook, Twitter, YouTube, LinkedIn, blogs and other interactive Web sites. Social media can be a valuable tool for marketing purposes but can also create serious headaches for franchisors when it comes to maintaining brand integrity. Recent examples have shown that the damage to a brand from an employee with poor judgment and a video camera can register in the millions of dollars. The following are key points to keep in mind when dealing with social media: 

  • Franchisors who use social media to promote their own brands should remember to comply with advertising laws and securities laws in their corporate communications. Franchisors should make clear that they are the source of any content they post on social media and not try to post anonymously.
  • Franchisors may want to monitor brand-related content on social media outlets and other Internet sites for negative comments. Responding to negative news using social media outlets as quickly as possible may help to control its spread.
  • Social media Web sites may provide a complaint process to promptly remove material that infringes copyrights or other intellectual property rights. If a franchisor wants content removed, review the complaint process of each site to see if this quick and inexpensive option applies.
  • Establish a policy on social media for corporate employees and consider offering a form policy for franchisees to use with their employees. Educating employees about consequences (including termination) for behavior online that negatively impacts the brand may actually prevent these incidents from occurring. 
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The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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