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Report: Franchisors play active role in e-commerce

Chantilly, Va. – Operators of franchises are actively involved in the local online and social media presence of their franchise businesses, often funding and controlling digital marketing activities at the local level. A new report from BIA/Kelsey, Local Commerce Monitor Wave 17 (LCM), shows that franchises estimated their franchisors covered, on average, 43% of the online presence costs of their individual businesses, for things like website development, landing pages, enhanced listings and online video

In addition, more than half (51%) of franchisees surveyed stated their franchisors are "highly involved" with the social media presence of their local franchise businesses. This includes taking steps such as requiring the local franchise to run public dialog with customers through the national corporate website. Another 23% of franchisees said their franchisors are "somewhat involved" with their social media presence, allowing the local franchises to use social networks like Facebook, but with rules and boundaries about how active they can be and what they can say.

"The LCM findings point to a potential tug-of-war setting up over the social media presence of franchises," said Steve Marshall, director of research, BIA/Kelsey. "An essential characteristic of successful social media programs is authenticity, which requires candid, timely and uncensored posting. At the same time, franchisors need to be highly protective of their brands, which includes their local presence. The challenge is whether social media can be used successfully by local franchises when there's a high degree of control from the parent company. The jury is still out; this is a delicate balancing act and the roles are still being defined."

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