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34 Franchise L.J. 503 (2014-2015)
Your Store Is Gross - How Recent Cases, the FTC, and State Consumer Protection Laws Can Impact a Franchise System's Response to Negative, Defamatory, or Fake Online Reviews

handle is hein.journals/fchlj34 and id is 535 raw text is: Your Store Is Gross! How Recent Cases, the FTC, and State Consumer Protection Laws Can Impact a Franchise System's Response to Negative, Defamatory, or Fake Online Reviews Eleanor Vaida Gerhards Online reviews drive business. They have a powerful, lasting impact but people are more likely to share their negative reviews. While 45 percent of people use social media to share bad customer service experiences, only 30 percent use social media to share good customer ser- vice experiences.1 In one survey, 90 percent of people who recalled reading online reviews claimed that posi- tive online reviews influenced their buying decisions, while 86 percent of people said negative online reviews influenced their buying decisions.2 These statistics ex- Ms. Gerhards plain why a franchise system and its franchisees would use any and all available resources to ensure that their brands, products, and services are above reproach. The Internet can be a harsh and unforgiving forum for even the most respected brands and products. Franchise systems are particularly vulnerable to negative online press because one location with a negative online profile can taint an entire system and potentially im- pact revenues across the country with a speed and scope that were unfathom- able ten years ago. Unfortunately, not even impeccable customer service and flawless products guarantee a problem-free online presence. The impact that online reviews now have on consumer habits has spurred a new headache for businesses: defamatory and fraudulent reviews. A franchisor or franchisee victimized by a defamatory post has limited legal remedies, even with the massive impact that bad online reviews may 1. Dimensional Research, Customer Service and Business Results: A Survey of Customer Service from Mid-Sized Companies (Apr. 2013), https://dl6cvnquvjw7pr.cloudfront.net/resources/ whitepapers/Zendesk AVP CustomerService and BusinessResults.pdf. 2. Id. Eleanor Vaida Gerhards (egerhards@foxrothschild.com) is an attorney in the Franchising, Licensing and Distribution Practice Group of Fox Rothschild LLP where she focuses on trans- actional and regulatory compliance matters.

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