Monday, September 17, 2007

The Internet and Franchising

The following is from August 2007 Franchising World and worth considering by both franchisees and franchisors. When I read this I was thinking - "Yes, that is obvious." Then I realized that I had not thought of it before reading the article.

With increasing use of the Internet, the list of de-identification tasks continues to expand. Tech-savvy franchise systems now include provisions in their franchise agreements preventing franchisees from using any of the brand’s trademarks, or derivatives of those trademarks, in their Web addresses or uniform resource locators known as URLs. Most franchise companies now also check the Web sites of terminated franchisees to make sure that these sites were deactivated or, at a minimum, no longer reference the franchise company or any of its trademarks or bear any of the system’s logos.

Internet violations on a former franchisee’s Web site are analytically-similar to old-fashioned signage violations, as are violations on third-party Web sites where the former franchisee signed up, and perhaps paid a fee to be listed. In those cases, since a former franchisee caused the problem, he continues to be responsible and must correct it. If a former franchisee refuses to correct the problem, a court will probably compel him to do so. But what if a former franchisee is less-directly involved in creating the problem?

Do read the whole of the article.