I love to try new restaurants around town and frequently use my phone or computer to check online for recommendations. Like myself, many people turn to the Internet and social media to find the goods or services they are seeking. The Internet has become an invaluable tool for generating business through advertising and social media, but what if the franchisor restricts their franchisees’ ability to advertise online?
Advertising is always covered in the Franchise Agreement and is an important section that dictates what kind of advertising is required, how much money the franchisee has to spend on advertising, and any prohibitions or restrictions on the type of advertising the franchisee can engage in, among other things. It is important for potential franchisees to understand what they will and will not be allowed to do in respect to advertising. If the Franchise Agreement prohibits the franchisee’s use of the Internet for advertising, you should inquire into the franchisor’s reasons for it and, before purchasing a franchise, you should ensure that you are sufficiently able to reach your target market through the approved advertising channels, as well as, through online mediums. If you are prohibited from using online advertising to generate business, it will ultimately hurt your bottom line and is a factor to be considered when deciding whether to purchase the franchise.