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Insights

Restaurant Law University: Branding and Marketing Concerns

May 23, 2017

Hospitality businesses are becoming increasingly creative in their marketing, not only to win new business, but also to maintain relationships with loyal customers. On June 6, 2017, Kyle-Beth Hilfer will moderate and speak at Restaurant Law University. In her presentation on branding, she will discuss the legal implications of various branding and marketing techniques. Below are two examples.

Curated Content

Curated content is omnipresent in social media marketing. For example, an hotelier may aggregate images of luxurious sunsets to inspire travelers and run those images on its social media. A restaurateur may embed video of celebrations, photos of food-inspired trends, or critic reviews on its own pages.

As the business develops its website and social media content, it should remember that sourcing content from the Internet is dangerous. Copyright myths abound. Google Images is not a free library. Possession does not yield copyright ownership. There is no 10% or 20% rule that allows one to take a certain percent of content and use it without a license. This is particularly the casefor commercial purposes. Finally, the fair use defense requires significant legal analysis. It may not be available depending on the facts.

Practice Tips:

  • Marketing teams move swiftly to engage the public with relevant and on trend content. They need an internal system for legal vetting to ensure they are not violating any copyright, trademark, or other proprietary rights.
  • User-generated content from consumers can expose a company to legal liability for embedded intellectual property infringement.
  • The legal advisor should develop a set of guidelines for curating content based on the client’s marketing practices.
  • Investigate with your legal counsel whether and how to qualify for a Digital Millennium Copyright Act safe harbor.

Loyalty Programs

Loyalty rewards programs have been challenged under a plethora of laws. One potential flashpoint for litigation may come under the Consumer Review Fairness Act of 2016. This legislation protects people’s ability to post reviews online. As of March 14, 2017, the Act prohibits contractual provisions that: bar or restrict the ability of a person who is a party to that contract to review a company’s products, services, or conduct; impose a penalty or fee against someone who gives a review; or require people to give up their intellectual property rights in the content of their reviews.

Practice Tips:

  • Since hospitality businesses’ success are linked to customer reviews, review loyalty programs’ and website’s terms and conditions.
  • Examine loyalty programs’ point system for compliance with gift card and trading stamp laws.
  • Review all marketing practices, such as mystery gifts, free offers, or swapping testimonials for points, to mitigate risk pursuant to FTC guidelines and state laws.
  • “Drip pricing,” the practice of advertising one price to lure in a consumer, but then adding on features along the way, may create legal risk. Resort fees are particularly under fire in the hospitality business.

Attend  Restaurant Law University for a closer look at branding, while also learning about corporate set up, buying/selling a restaurant, franchising, licensing, employment, and leasing.

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