In Franchise Advertising, What You Don’t Know Sometimes

  • 3 min read
  • Nov 22, 2022

In Franchise Advertising, What You Don’t Know Sometimes

No brand can be successful, or frankly exist, without advertising and marketing. However, the myriad regulations that apply to advertising and marketing can make that vital activity fraught with danger.

I recently presented to the American Bar Association on Franchising a wide range of laws, regulations and industry standards that apply to franchisor and franchisee advertising and marketing campaigns. A moderator and I wrote an extensive legal paper summarizing many of those aspects, which is available here.

However, franchisors and franchisees starting their businesses in these uniquely challenging times likely don’t have time to wade through 46 pages of a legal white paper. So, below are some tips that can help business owners and marketing managers know when to contact legal counsel for guidance and support.

Marketing the franchise opportunity to potential new franchisees

Advertising franchise opportunities is a very disciplined endeavor. If you are a franchisor promoting franchise availability using internal staff and resources, you should work closely with your franchise consultant to ensure that your print, Internet, and other marketing efforts with Complies with the strict requirements of the Federal Trade Commission.

If you have sales staff who use social media to contact potential franchise candidates, those staff should go through compliance training with your franchise attorney. And if you use brokers or third-party sellers to promote your franchise opportunities, you should make sure the broker or seller has a proven track record of selling franchises legitimately. If they break, you will likely be responsible. Therefore, you should monitor your broker/dealer’s advertising efforts or have your franchise consultant review their advertising efforts.

Marketing your basic product or service

Here are some areas of potential pitfalls when using different marketing strategies to promote your product or service:

SMS, email, call: Do you plan to communicate with customers via SMS, email or phone calls, or do you encourage franchisees to do so? Your first email, text or call should be to your lawyer. Federal law governs the content of your campaign and the details of how you send your messages. There is a cottage industry of lawyers representing consumers who receive inappropriate marketing texts, emails or calls. These lawyers can turn your marketing world into a group of class action plaintiffs. Because defenses to these provisions are few and far between, damages can quickly run into the millions, and that’s not even counting the plaintiffs’ attorney fees you’ll likely have to pay.

Celebrity mentions: Would you consider tagging a celebrity from your brand or franchisee’s Twitter account (if Twitter still exists as of this post)? Or want to post a meme using a celebrity’s image or likeness? Think again Federal and state law gives celebrities the right to sue companies that use their name, image, likeness or voice (or good impressions of them) without permission. Remember, just because private citizens can post about celebrities, doesn’t mean you, as a business, can. Also, the scope of who is a “celebrity” is expanding. YouTube content creators, social media influencers, and streamers are now popular with large segments of your consumer market.

Truth in advertising: We’ve all heard the saying, “The truth shall set you free.” This is often not the case in advertising and marketing. It may be a claim in your ad Technically That’s right and still put your brand in hot water. In general, if a statement is true but causes consumers to make assumptions that aren’t true, regulators — and even your competitors — can come after you.

Third party marketers: Are you hoping to avoid a call from your lawyer by outsourcing your marketing to a third party? If that seller takes legal compliance seriously and has sufficient expertise in advertising law, you may be able to get away with it. However, if the seller doesn’t follow the law, your brand can be held liable – even if you relied on the seller to make it right! So when it comes to third parties, do your homework, make sure your lawyer has reviewed the vendor agreement, and don’t set it and forget it. Your brand and its resources are on the line. Monitor your seller campaigns carefully and be prepared for advice.

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