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Social Media, What Can Franchisees Do?

Most franchisees will not have social media addressed specifically in their Franchise Agreements.  So, there is not much stopping franchisees from participating in social media web sites.  New franchisees are now starting to see company’s social media policies in their franchise agreements.What is the big deal with a franchisee setting up a Twitter or Facebook page?  Here are a few:

  • A franchisee’s page is neglected and it reflects poorly on the brand.
  • A franchisee posts a coupon on his Twitter page but isn’t clear that it is only valid at his store.
  • A franchisee’s personality can become evident over time with social media – is this good for the brand, is it confusing?

In my opinion, from what I’ve seen with social media for 99.5% of restaurants – an proactive social media strategy is really on good for sending discount promotions to a ready pool of your customers.    You can sometimes get ‘buzz’ from online communities,  but the resulting increase in sales is almost always negligible.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.

8 comments

  1. Dell is known to be one of the more successful companies using Twitter and they use it mostly to post exclusive coupons. Bad Twittering is using your account for a constant flow of press releases and stupid announcements TRUST ME!

  2. I think a legitimate fear is that social media allows a company to reveal too much of itself. There is a tendency to want to constantly put out something and wha tis put out can lead to a loss of business.

    I try and be very conscious of whom I do business with. As a result I drop clients and patronage based on my values. While middle aged, I still have personal life expectancy of 40 years plus and over time those dollars add up to a great deal. I once calculated the loss to a soft drink company of my personal business and realized in present value it exceeded 116k to them. Not a lot, but not inconsequential either. Offend enough customers and you are talking real money at some point.

    The other legitimate fear is social backlash. Why are on the tip of a new age in terms of communication, and I would certainly not like to be a company with the reputation of frivolous use of means of communication when the inevitable simplification lifestyle move comes into vogue again.

    So I would remain cautious and focus on a minimalist approach. Minimalist means you make sure what you communicate is relevant and you balance out the long term risk to the reward.

    That being stated the next restaurant concept I am planning does rely heavily on social media, but it is built into the concept.

  3. Franchisees should use social media to put their franchise at an advantage in terms of establishing online presence, channel for important information dissemination, and other matters without putting the franchise in a prejudicial situation. it helps when you have the means to reach out to so many people at a short period of time for any relevant information concerning your franchise that needs to be known by the customers immediately.

  4. SnagAJob.com and TMP Worldwide are actually putting on a webinar on this subject tomorrow afternoon. Registration is free and is being put on through HR.com. Go here to register: http://www.hr.com/SITEFORUM?&t=/Default/gateway&i=1116423256281&application=story&elementID=1256762873215

  5. Ryan;

    You are raising a number of interesting points. Let me respond to just one of them. A franchise system is a network effect economy based on the geography of the underlying supply chain- more nodes usually mean more value accrues to the system. Some systems expand geographically without paying attention to the constraints of the supply chain – think of Taco del Mar.

    Social media is a non geographical network, which may have value to a franchise chain distinct from the value of managing the supply chain.

    My sense is the most franchisors see social media as an extension of television advertising, and few franchisee associations see social media as crucial to their efforts to control what is being said about the brand.

    If an IndFA is running a social media campaign it will be next to impossible to control it by changing the franchise agreement – the only way will be to bring in the IndFA as a party to the contract.

  6. In economic times like this, doing anything (responsibly) as a business owner (or franchisee) to draw in business, simply is GOOD business. Of course, not doing anything to “hurt” the brand goes without saying but using tools such as twitter to send out coupons to your already loyal followers is smart. Franchisors should embrace these advances and encourage franchisees to do so as well!!!

  7. Pete: sending coupons to already regular and loyal fans is dumb business unless your selling big ticket items. If the customer is coming for a visit, all a coupon does is take away your profit. The goal of couponing is to only attract NEW customers or to encourage more repeat business.

    • Za: I get and appreciate your point. You do, of course, want to attract NEW business. The one thing that many businesses seem to neglect is keeping the customers they do have. Perfect example…cell phones…. it doesn’t infuriate you that a new customer can get a phone for free but if you have been a customer for years and lose your phone you must pay several hundred for that same phone?? Keeping the customers you do have should be a priority just as gaining new ones. I’m not saying throw every coupon their way but giving them deals now and again to make them feel they are getting a good value and are appreciated is NOT dumb business!!!! Anything you can do to bring in and retain more customers profitably, especially in times like this, is GOOD business.

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