What Role Does Social Media Play in the Due Diligence Process?

Like it or not, social media has permeated our daily lives. Facebook alone can count 1.9 billion users on its platform -- and that staggering number rises every day. Whether it’s following your favorite celebrity’s daily musings, commenting on photos of your high school friend’s new baby or salivating over your cousin’s food photography, we spend most of our waking hours on social media. Over the past few years, some smart brands have caught on that social media plays a key role in process of making a purchase, whether it’s of a product or a business.

In current times, social media should be a key factor in a brand’s content strategy. Creating content that is shareable, regardless of where it is placed, is incredibly important. Plus, brands should be paying close attention to what their fans are saying and sharing about the brand.

Jack Monson, Director of Digital Strategy at Qiigo, a seasoned social media and marketing executive, believes that social media is the first place franchise candidates will look during the due diligence process.

“Social media has a bigger impact [in business] every day,” he said. “A lot of franchise brands believe that potential franchisees will go to a few specific websites and look at information that we’ve put together exactly how we want them to -- but the reality is, people just don’t do that.”

The days of brands creating carefully curated content for use in email newsletters or blogs are over. These days, franchise candidates have the world at their fingertips -- literally. They’re able to read reviews of individual locations, check out hundreds of local pages on Facebook and subscribe to Google Alerts to stay on top of a brand’s news -- in real time.

“When a candidate looks at a brand’s Facebook page, they’re looking at their own future. Social [media] is a place where you can paint a picture for a candidate of what their life is going to look like,” he said. “If they look at a corporate or franchisee’s Facebook page and the content hasn’t been updated in two years, it makes them wonder how their store would be marketed and what support they would receive from corporate.”

Outside of the brand’s social media pages, users are driving endless brand content through reviews, check-ins, sharing and tagging brands and more.

“Everyone is an influencer -- all they need is a social media account,” said Nick Powills, CEO of No Limit Agency*. “We can post a status on Facebook and influence our friends. We can share news and influence our friends. Social media is an incredibly important tool when it comes to brand perception and franchise development.”

Monson adds that creating a solid online footprint doesn’t have to be a super complicated process.

“Just having well-managed social pages up and running is half the battle. Having old pages that aren’t updated looks sloppy and is a poor reflection of a brand. As a candidate, you have to look at that and ask yourself if you want to be a part of it,” he said.

Many franchise brands provide guidance and tools for franchisees to manage social media content at the local level. Others choose to keep social media on the corporate level and essentially do the work for them. For Monson, the former is the best way to maintain corporate brand standards while giving franchisees the freedom to add local flavor to the social pages.

“Social media is no different than anything else a franchisor does,” he said. “Brands need to develop a program that someone can follow and be successful. In some systems, this may entail giving them content and in others, it’s just advice. In either case, providing a playbook for social media is key.”

Most candidates are savvy enough to check out Facebook pages and read review sites like Yelp. Monson stresses the importance of reputation management as being an important piece of social media, perhaps even more so than proactive posting.

“Even the greatest store, restaurant or business is going to have at least a couple of bad reviews on Facebook, Google+, Yelp or any other site,” he said. “If those poor reviews aren’t being mitigated or handled and there aren’t enough good reviews being pushed out there to overshadow the bad, that is a really big hurdle for a candidate to get past.”

Monson suggests that candidates that are concerned about a specific area of a brand’s social media should dig in and ask for more information to determine if it’s a systemwide problem or if it’s specific to one unit.

When putting together a brand’s content strategy to appeal to prospective franchise candidates, social media should not be overlooked. To stand out from the pack in the crowded franchise industry, brands should prioritize both proactive social media content creation and reactive social media management.