Just as the restaurant industry found during the tech boom of the late 1990s, the Internet continues to bring as much peril as it does promise.
While the current growth of social media has provided companies large and small with cheap, effective marketing, it also has exposed them to a new kind of fraud: “brandjacking.”
A company can be brandjacked if a scammer—or in some cases, a competitor—creates a false social-media profile and misrepresents that company online, said Susan Neuberger Weller, a trademark attorney with the Washington, D.C., office of Mintz Levin.
While many instances of brandjacking are resolved once a cease-and-desist order is made, some restaurant operators are finding themselves turning to the courts for redress.
The threat of brandjacking has evolved out of “cybersquatting,” in which people create or buy Internet domain names of legitimate companies and try to misrepresent that brand online or sell the domain name. For that reason, the strategy for companies now, as it was back in the ‘90s, is to establish a brand identity online before somebody else beats them to it, Weller said.
“One thing restaurant companies should consider, and I know this is annoying because it’s an extra thing to do, is to register defensively their most important names and trademarks,” Weller said. “If it’s one they want to take legal action about if somebody’s using it, it’s important enough to spend the amount of money it takes to create a domain name or manage a Twitter account.”
According to Weller’s account, Elevation Burger discovered in March that somebody created a Twitter account under the name “Elevation Burger,” which is a registered trademark, and tweeted, “I’m going to eat at Z-Burger  today.” The impostor was reportedly the owner of Z-Burger, which has two units in Washington, D.C.
Weller worked with Twitter to have the false Elevation Burger page removed on grounds of trademark infringement.
A publicist representing Z-Burger told the Wall Street Journal that the restaurant’s owner, Peter Tabibian, created the false profiles “to be creative and fun in promoting Z-Burger.” Tabibian did not intend to be malicious, the publicist said.
A 1999 law gave trademark owners the right to sue cybersquatters, Weller said, but currently there’s no legal precedent for how such laws would apply to social-media profiles. So creating a false Facebook or Twitter page for somebody or some company is not covered by existing laws drafted to prevent or punish domain name abuse.
“This really isn’t a new concept,” said Rex Stephens, a partner in the Orlando, Fla., office of Baker & Hostetler LLP. “It’s been around in e-mail with your Nigerian-prince scams and before that with telephone scams or people going door to door. From a legal perspective, we apply the same rules and laws.”
In representing companies alleging online fraud, Stephens found Facebook, Twitter and MySpace to be responsive and cooperative in removing a false profile.
“You should start by demonstrating that you have a protectable interest,” such as intellectual property or slogans and signature products, he said. “If you can show that to the site, they likely will shut down the offending [page].”
Larger companies usually devote people and resources from their marketing departments to social-media creation and monitoring, Stephens added, pointing to Pizza Hut  hiring a “twintern” to handle its Twitter feed or Domino’s Pizza’s  YouTube response to a negative viral video.
Smaller companies without those resources could outsource the job to digital agencies or consulting firms that manage a company’s online presence, Stephens said.
“We have a Facebook page and an e-mail database, and we’ve dabbled in the shallow end with Twitter,” Weaver said. “My problem is that our marketing department is so lean and mean—and Dell has a whole Twitter department. That’s why we haven’t gone out on that yet: I don’t have the manpower to monitor it. It’s going to continue to get stronger and stronger, but you have to be on it all the time.”
Ted’s has partnered with Atlanta-based digital agency BrightWave Marketing, which consults on digital-marketing strategy and manages the social-media portfolios of some clients.
Simms Jenkins, chief executive of BrightWave, said the most important priorities for brands entering social media is to determine where its customers engage the brand online—in some cases, e-mail is a more mature source for interaction than social networking—and to set measurable goals once it takes the plunge.
“You want to be an early adopter, but you can’t just have an intern launch a Twitter account and think you’ll be able to manage it,” Jenkins said. “Policies can help define what your presence is going to be and what that means for your employees and franchisees.”
Ted’s didn’t actively court Twitter fame, Weaver said, but had the spotlight thrust upon it when actor and Twitter enthusiast Ashton Kutcher used the site to reach out to the chain’s founder, Ted Turner. During his quest to beat Turner’s cable news network CNN to 1 million followers, Kutcher released tweets and YouTube videos warning Turner that he’d suffer several pranks if Kutcher won the race, resulting in online buzz for the media mogul’s restaurant.
“Even if you try to plan that kind of exposure, you couldn’t,” Weaver said. “Twitter’s very powerful, but it’s just one of those things that once you put yourself out there, you better be able to watch it. The worst thing you can do is be unresponsive.”— [email protected]