Customer reviews are powerful, as they can shape how others view a business and influence buying decisions. In fact, research shows that 75.5% of consumers trust online reviews, while 63.3% always read them before making a purchase.

For franchisees, reviews can impact reputation, credibility, and the overall trust people place in the brand, even when operating under a well-known franchise name.

With 91% of consumers reading both positive and negative reviews, and nearly the same percentage reporting that negative feedback influences their buying decisions, it’s understandable that some franchisees would want to highlight positive experiences. However, recent Federal Trade Commission (FTC) regulations now set clear rules on how reviews can be collected and shared, which franchisees should be aware of, especially when using reviews in social media content, on their website, within Google’s Business Profile, etc.

In this post, we help answer:

WHO IS THE FEDERAL TRADE COMMISSION?

The Federal Trade Commission, commonly known as the FTC, is an agency within the U.S. government that works to protect the public from deceptive or unfair business practices, as listed on the FTC website.  As a franchisee, you may be familiar with the Franchise Rule that they’ve implemented, which also protects franchisees from unfair or deceptive practices.

For franchisees, understanding the FTC’s role and their rules around reviews is important, even if corporate headquarters manages national marketing, because a franchise location can be held liable if violations are found at the local level.

WHY DOES THE FEDERAL TRADE COMMISSION REGULATE REVIEWS?

Fake or unethically obtained reviews can have a major impact on consumers, often giving businesses an unfair advantage and potentially misleading potential or current customers into engaging with a business based on false information. The FTC works to protect consumers by regulating these online reviews to help make sure all feedback comes from real customers and genuine experiences.

WHAT REGULATIONS HAS THE FTC IMPLEMENTED REGARDING REVIEWS?

Last year, the FTC published its Final Rule, which includes a fake reviews and testimonials rule that prohibits certain practices that they’ve deemed as deceptive or unfair. With penalties upwards of $51,744 per violation, it is crucial to comply with the regulations they have put in place, which include:

  • No fake reviews or testimonials: Reviews must come from real customers who have used your product/service. This also prohibits the use of AI-generated reviews, which is especially relevant with the recent proliferation of AI “influencers.” The FTC says endorsements and testimonials must reflect the endorser’s honest experience and opinion. Therefore, if the endorser is not a real person, that must be clearly disclosed.
  • No incentivized positive reviews: You cannot reward a customer to leave a positive review (e.g., providing a discount if they leave five stars) or reward them for removing a negative one.
  • No buying reviews: It is prohibited to purchase (or sell) reviews.
  • No reviews from non-disclosed or insider connections: Any reviews left by an employee or insider must explicitly state how they are connected to the business.
  • No suppression of negative feedback: You cannot threaten or pressure customers, such as with legal action, if they leave a negative review. You also can’t hide or partially remove negative reviews to only display positive ones.
  • No fake social media engagement: Businesses cannot buy or sell fake followers, likes, or views that make them appear to be popular.
  • No misleading “independent” review sites: A business cannot run or control a website that claims to offer independent reviews if the business also promotes or sells its own products or services on that site.

 You can learn more about the FTC’s Final Rule on banning fake reviews and testimonials here. 

WHAT DOES THE FEDERAL TRADE COMMISSION SAY ABOUT ASKING FOR REVIEWS?

If one of your customers has a positive experience with your franchise business, are you allowed to ask them to leave a review?  Yes and no. You can generally ask customers to leave reviews for the products or services your franchise offers, but you must be cautious not to selectively ask only those customers you expect will leave a positive review. You should be open to receiving a variety of feedback, and your request for reviews should be generalized for everyone, regardless of their experience.

As a franchisee, if you find that you’re not receiving as many reviews as you would like for your specific location(s), you are allowed to incentivize reviews (depending on which platform users are leaving the review on). This means you can offer a reward in exchange for customer feedback. However, you must make it clear to the customer what the reward is and that it is offered for leaving any type of review, not just positive ones. Also, the FTC recommends encouraging the reviewer to disclose the incentive in their review.

Note: Incentivized reviews depend on the platform. For example, Google has its own rule that prohibits incentives for reviews, as does Meta. Going against those policies can have negative consequences, including putting your franchise’s Google listing or Facebook page in jeopardy.

FRANCHISING WITH DOGTOPIA

At Dogtopia, we love hearing the experiences our pet parents and their dogs have at daycare! If you are a prospective franchisee interested in pursuing your own doggie daycare, please check out our detailed FAQ page for more information. If you are ready to learn more about this business opportunity, please fill out our online inquiry form.

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