Collaborative Social Media for the Franchise System – Marketing and Legal Impact

By Sandy Lechner and Jason Power, Esq., CFE

Franchisors know the stages of recognition, consideration, and resolving concern in the customer buying cycle are now more self-directed than ever as customers traverse online information mediums often outside of the Franchisor’s direct control. With sources outside of a franchisor's control, there are many legal issues that need to be addressed; however, with a marketing resource management platform, many of these legal issues are easier to manage. By having your social media combined through one source, you and your legal team can analyze negative online content from customers and rogue franchisees before the system has been critically damaged, which many times in today's digital world happens within minutes or hours.

Although the self-directed buyer’s cycle is a paradigm shift, most franchise networks have not prepared their social media to allow for both the corporate franchisor and local franchisee contribution required to fully take advantage of the digital spaces buyers research products and services. Without corporate franchisor and local franchisee both playing a role (the classic inclusionary challenge of distributed marketing) in social media, the franchise system risks having an underpowered social media presence that doesn’t support the customer buying cycle.


  • The right conversations that a user/ buyer could find or participate in to help them discover your product or service don't happen because the franchisor or franchisees are not on the social media platforms monitoring content to ensure that topics, even those not directly related to the franchise, are addressed to provide pathways that lead potential customers to the brand.
  • Weakened Franchise branding or distortion in the conversation, which can lead to legal issues between the franchisor and franchisees regarding brand integrity and protecting the goodwill of the franchise system.
  • False or negative information is circulated, which damages both franchisor and franchisees. It should be noted here that in most instances, negative content can be fixed if addressed quickly; however, there are certain instances where internet sources will fight against removing or positively addressing the negative content, which is when a franchisor should look to reputation management as a supplement to their social media platform.
  • Spaces for customer engagement are not taken advantage of.

As steward of the brand, the franchisor will choose to centralize social media at the corporate level, allow franchisees to have control over local social media, or define some mix of the two. From a legal standpoint, most franchisors today still prefer to centralize social media at the corporate level. By centralizing their social media and establishing standards in the franchise agreements that prohibit franchisees from having their own social media sites such as Facebook, Pinterest, LinkedIn, etc., franchisors feel they can better manage negative content. Many franchisors are nervous about giving control of social media to franchisees because content can go viral very quickly that may include negative content about the franchise system. Just as threatening to the franchisor, financial information or trade secrets can leak, either of which will result in legal action between the franchisor and franchisee. Despite those challenges, with the right social media platform and proper management of that platform, the franchisor can utilize a mixed system and avoid some of the legal issues that scare most franchisors.

A mixed system, when setup and maintained correctly, is more locally relevant in breadth and depth, but its coordination can be cumbersome without significant automation. The majority of franchisors are struggling (with varied results) to align with franchisees in hopes to transition one-dimensional corporate social media to a co-creative franchisor-franchisee structure.

The franchisor-franchisee co-creation structure will assign who (franchisee or franchisor) is accountable for which types of content creation, posting duties, community management, and analytics gathering. Looking at (1) the product or service, (2) the relationship between franchisor and franchisees, and (3) the franchisor to end customer relationship / franchisee to end customer relationship will give you a sense for what structure will best fit your network.

Central Structure – All postings, community management, review monitoring, etc. is completely controlled by the franchisor. Any input from franchisees must pass through the filter of the franchisor.

Dispersed Structure – All branded digital resources, content, policies, and instructions are supplied by the franchisor, but franchisees are left to choose engagement channels and generally run social media how they want; sort of a laissez-faire approach.

Co-Creation Structure – The franchisor is responsible for diffusing brand messaging deployed over broad-stroke national franchisor social media and locally focused franchisee media; franchisees contribute local content and carry out local duties within the framework designed by the franchisor.

Next Steps

If you want to align with your franchisees in a Mixed Co-Creation structure for a more robust and comprehensive social media strategy, consider the following:

1. For franchisees to adapt and locally diffuse brand messaging they need to be creative within the limitations you, as the franchisor, set. Their limitations are your content guidelines, images, preset social media engagement channels, and shared media schedule to be followed.

2. Define franchisor and franchisee obligations. Who does what and when? Remember what franchisees are best suited for, and what you as franchisor are best suited for.

3. In addition to the share media schedule, there must be editorial guidelines to reiterate posting goals, community management practice, mitigate crises, etc.

4. Capture analytics at both franchisor and franchisee levels to understand the impact of engagement. Think about what metrics you want to know as franchisor from your franchisee and how to facilitate their collection.

Along with the above marketing strategy considerations, to properly implement a mixed co-creation structure, the franchise agreements must be evaluated to determine whether the franchisor has the right to change the franchisee obligations regarding social media. Because most franchise agreements still reserve social media ownership exclusively to the franchisor, these provisions will need to be addressed, and in many instances amended, to permit the franchisee to utilize social media on a local level. However, even if social media rights are provided to the franchisee, the franchisor is still obligated to protect the trademarks, goodwill and brand, so provisions and procedures must be included giving the franchisor authority to co-manage or approve and deny franchisee created content prior to publication. By doing this, the franchisor ensures that all posts are aligned with the brand's message and that the content is not damaging the franchisor from both a sales and legal perspective.

We must stress that carrying out a coordinated social media strategy in the franchise dynamic is a lot easier when it all happens on one platform. With all the moving parts of marketing in a franchise system, a Mixed Co-Creation Structure is not possible without a degree of automation. If you can make it turn-key for your franchisees (something franchisors are good at anyway) you might just develop a social media strategy that encounters customers at the discovery points in their buying cycle.

Co-authored by Sandy Lechner of and Jason Power of Shelton & Power, LLC.

About SproutLoud Media

SproutLoud helps brands and Franchisors manage and execute email marketing, direct mail, social media, local search and pay-per-click marketing programs with the local businesses and franchisees that sell their products and services.

About Shelton & Power

Shelton & Power is a national law firm focusing on franchisor, franchisee, trademark, copyright, and general business legal needs.