By SARAH E. NEEDLEMAN

When it comes to social media, franchisers are making sure their franchisees speak with one voice.

Lots of businesses are putting together social strategies. But franchisers face unique problems, since they’re made up of multiple units. Without an overall company policy, franchisees may adopt different online approaches, potentially causing confusion for consumers.

So, franchisers are implementing systemwide strategies and policies on what to post and how to react to company-related chatter. In some cases, they monitor social-media traffic and jump in to resolve disputes or answer complaints about outlets.

Policing social messages is critical for protecting a brand, say franchisers and industry experts, especially now that more customers use networks to contact, and grumble about, companies. “This is a serious marketing channel,” says Lorne Fisher, chief executive of Fish Consulting LLC, a Hollywood, Fla., marketing firm for franchisers that advises clients on social media. “Once you put something out there, it can never come back.”

David Plunkert

Letting individual owners send their own messages also raises legal concerns. Mark A. Kirsch, a franchise attorney and partner with Plave Koch PLC in Reston, Va., says franchisers are required under trademark law to ensure that their brands aren’t publicly misrepresented.

These concerns are coming to the fore as franchisers become bigger users of social networks. According to a survey from the International Franchise Association, 27% of 549 franchisers polled said they use Facebook multiple times a day, followed by 22% who use it daily and 20% who use it weekly. The group doesn’t have hard numbers on how many franchisers have set up policies, but many chains say that they’ve taken the step.

For instance, Naked Pizza, which has more than 20 franchises across the world, gives area developers and owners social-media instructions during their training, and watches their online efforts. The company can monitor activity, measure analytics and make recommendations, says Robbie Vitrano, co-founder of the New Orleans-based chain. The company issues weekly “audits” to its stores, focusing on how much they post and how well they convey the company’s style, and sends out suggested best practices.

Wild Birds Unlimited Inc., a retail franchiser of bird accessories, started rolling out a systemwide social-media initiative about a year ago, says Jim Carpenter, founder and CEO.

It began with a Facebook page representing the company as a whole, managed at company headquarters in Carmel, Ind. Since several franchisees had social-media profiles of their own, Mr. Carpenter took steps to give the company a uniform online voice. For one thing, he purchased software that lets corporate staffers suggest content for franchisees to add to their social-media pages. Wild Birds also set boundaries for franchisee posts on Facebook. For example, headquarters recommends sharing information about birds, such as how to turn a backyard into a bird-feeding habitat. Sharing what a store’s employees ate for lunch isn’t allowed.

“If you have no policy, [franchisees] will do whatever they think they should do,” says Mr. Carpenter. “It may be wonderful, but it may be not.”

Some franchisers don’t just police what their owners write on social networks—they closely watch what customers say, too. The rubbish-removal chain College Hunks Hauling Junk, for instance, has a corporate employee who keeps tabs on what people post about the franchise.

Last year, a customer complained on Twitter that a price he was quoted over the phone didn’t match what he was charged in person. The monitoring employee saw the message and reached out to the customer and franchisee. The company determined within a few minutes that the issue was a simple misunderstanding.

“The customer later tweeted again that the problem was resolved,” says Nick Friedman, co-founder of the Washington, D.C., chain.

Ms. Needleman, small-business assistant editor in The Wall Street Journal’s New York bureau, can be reached at sarah.needleman@wsj.com. Emily Glazer, a staff reporter in The Wall Street Journal’s New York bureau, contributed to this article.

Even in the calmest times, commercial real-estate brokers are known to jump from one firm to another to get a bigger share of commissions. Now, given how eventful the past seven months have been, analysts are saying the movement could accelerate.

Since October, the business has seen the acquisition of Newmark Knight Frank by Wall Street firm BGC Partners Inc.; the collapse of Grubb & Ellis, which filed for bankruptcy protection; and then the acquisition of Grubb & Ellis by Newmark. Then just last week, CBRE Group Inc. announced that Brett White will step down as chief executive at the end of the year, to be succeeded by Robert Sulentic, the former head of Trammell Crow, which was bought by CBRE more than five years ago. Mr. White will stay on the board.

With all these changes, brokers may start jumping around more, and firms might have to offer more perks to retain and attract top producers, according to Anthony Paolone, an analyst at JPMorgan Chase. “Competition in the business has become fierce,” he wrote last week in a report on the CBRE announcement. Mr. Paolone also pointed out that the brokerage business has improved from the depths of the downturn. “With the business bouncing off the bottom a number of competitors are back on their feet,” he wrote. “Keeping the highest producers happy while maintaining margins for (CBRE) shareholders will be an important task.”

In recent months, dozens of brokers who were with Grubb have jumped to rival firms. Other high-level movers include Arthur Mirante, who spent more than four decades at Cushman & Wakefield and is now running the new Manhattan office of Canadian firm Avison Young. In addition, Amira Yunis moved last fall from Newmark to CBRE.

Firms often try to lure brokers by offering them different so-called “splits” of their commissions. Typically in the industry, brokers and firms split their commissions 50-50. But Avison Young offers brokers a commission split that’s about 10% higher than that, according to Mark Rose, chief executive of Avison Young. “While everybody is asleep, we’re starting to approach 25 folks in New York.”

Matthew Van Buren, president of the tri-state region for CBRE, said he’s confident the firm will be able to hold onto its top producers. “We have had tremendous success at attracting and retaining talent,” he said.

—Laura Kusisto

A version of this article appeared May 14, 2012, on page A20 in the U.S. edition of The Wall Street Journal, with the headline: Chasing the Biggest Share.

By ELEANOR LAISE

Wally Bowman, a part-time security guard in Miamisburg, Ohio, had roughly $15,000 in credit-card debt when he signed up with a “debt settlement” firm last year. The company said it could resolve his debts for far less than the amount he owed and advised the 63-year-old to stop making payments to his creditors, according to Mr. Bowman.

Mr. Bowman paid hundreds of dollars in up-front fees and made regular monthly payments of $249 to Hess Kennedy, but the Coral Springs, Fla., firm never settled any of his debts, he says. By the time he dropped out of the program this summer, Mr. Bowman says, his debt had ballooned to about $20,000, due to interest and late fees, and creditors were threatening to garnish his wages. Finally, he filed for bankruptcy last month.

“I wish I had done that to begin with,” Mr. Bowman says. “I’d have been much better off.”

As the economy weakens, a growing number of consumers are paying big money for services from debt-settlement companies that purport to help them settle their debts for a fraction of what they owe. But as Mr. Bowman’s experience shows, customers can end up wishing they hadn’t sought such help.

At financial-services Web site Credit.com, the number of complaints about debt-settlement companies received so far this year is already double the number received in all of 2007, says John Ulzheimer, the site’s president of consumer education. The Federal Trade Commission, which has also seen an increase in consumer complaints, was concerned enough about the issue that it held a workshop late last month to examine debt-settlement business practices.

The Florida attorney general’s office has received more than 1,400 complaints about debt-settlement and other debt-relief companies this year through early October, compared with fewer than 890 for all of last year, and Attorney General Bill McCollum plans a push for licensing requirements and to strengthen other rules governing the industry.

Some major creditors, including American Express Co.,

say they won’t even work with debt-settlement companies, though the companies dispute this. “There’s no service or benefit that a debt-settlement company can offer our card members that they don’t receive from working with us directly,” says Lisa Gonzalez, a spokeswoman for American Express.

Regulators, consumer advocates and industry groups are taking a closer look at debt-settlement firms. But even some nonprofit organizations that offer alternatives, such as credit counseling and education, have come under scrutiny, with the Internal Revenue Service examining their ties to for-profit outfits.

Hess Kennedy, the firm hired by Mr. Bowman, was sued by the Florida attorney general earlier this year for allegedly violating the state’s laws on unfair and deceptive trade practices. The firm was placed in receivership in July, and on Monday, a Florida Circuit Court judge entered an order to wind down the firm and approved a process for consumers to apply to get their money back. The firm referred questions to an attorney, who didn’t respond to requests for comment.

Hefty Up-Front Fees

Debt-settlement companies generally advise clients to make monthly payments into a special account instead of paying creditors. The firm promises to use the accumulated cash to settle debts for pennies on the dollar. They often charge hefty up-front fees, and their tactics can trash customers’ credit scores, boost their tax bills and leave them in greater debt than when they started.

Rules governing these firms vary by state, but a number of states have recently passed laws allowing for-profit credit-counseling and debt-settlement firms to do business within their borders. Membership in the Association of Settlement Companies, a debt-settlement industry trade group, has roughly doubled in the past year, to more than 150.

Because the industry has so many new people, “there’s a lot of misunderstanding about how a company should be run, what are good standards and business practices,” says Wesley Young, an executive board member at the trade group. In recent months the association has begun monitoring its members’ sales practices and Web sites to be sure they meet the group’s standards, he says. It hasn’t yet taken any action.

Regulators are concerned about misleading debt-settlement sales practices. In a string of recent cases against such companies, the FTC alleged that firms misled consumers about what services they could deliver, how long it would take and how much it would cost, says Alice Hrdy, an assistant director of the FTC’s division of financial practices. And though many debt-settlement companies are set up to look like legal services, “usually it’s a sham,” says Norman Googel, an assistant attorney general in West Virginia. Consumers often don’t receive any legitimate legal services, “and the lawyer is like the Wizard of Oz back there behind the curtain,” Mr. Googel says.

The high fees charged by debt-settlement firms can prolong the process of paying off debts. The companies often charge an up-front fee of 10% or 15% of the total amount owed. They may also charge monthly fees of about $50, and a back-end fee of about 20% or 30% of the amount “saved” for clients in a settlement.

Credit-Card Lawsuits

Meanwhile, creditors aren’t getting any payment, so interest and late fees accrue, debt rises and clients get a steady stream of calls from creditors and collection agencies. They may even be sued and have their wages garnished. Lawsuits against credit-card holders are becoming more common as card issuers increasingly sell delinquent accounts to debt purchasers, regulators say.

Debt-settlement companies often refuse refund requests, says West Virginia’s Mr. Googel. And though regulators may try to get money returned to customers, these companies are generally not well-capitalized, “and often the consumer harm vastly outstrips whatever assets the company would have,” says the FTC’s Ms. Hrdy.

Consumers in debt-settlement plans often see their credit scores tank. While they’re not making payments, of course, their scores will drop. But settling a debt for less than the amount owed is also “a serious negative on your credit score” and stays on your credit report for seven years, says Barry Paperno, consumer operations manager at Fair Isaac Corp., which developed the widely used FICO credit score. Debt settlement can also boost consumers’ tax bills, since they generally must pay income tax on the amount of debt forgiven in a settlement.

Even when companies deliver, many customers drop out of the programs early. David Gillson of Sherwood, Ark., a 38-year-old quality-control manager at a construction firm, signed up with debt-settlement firm Elite Financial Solutions of Fort Lauderdale, Fla., in 2006. He owed more than $71,000 in seven different credit-card accounts. Elite helped him reach two settlements within the first year or so.

‘Just Horrendous’

But the collection-agency calls were “just horrendous,” Mr. Gillson says, and his credit score was plummeting, two creditors sued him, and his wages were garnished. Given his reduced wages, he couldn’t afford to put anything in the debt-settlement account, and he dropped out of the program in June.

Elite’s contracts “clearly explain all the negatives, such as garnishment, that interest rates will accrue and that late fees will apply,” says a supervisor at the firm.

Consumers who can’t work out debt problems on their own do have alternatives. Many nonprofit credit-counseling organizations offer “debt-management plans,” in which consumers steadily pay the full balance owed but often get concessions from creditors such as lower interest charges and waived fees. Such nonprofit programs come with some consumer protections. For example, they must provide services tailored to the needs of individual clients and charge reasonable fees.

But even here, consumers must tread carefully. The IRS began examining nonprofit credit-counseling organizations several years ago and found that many were funneling fees to for-profit companies, or doing little or nothing to educate consumers. In its initial examination, the IRS looked at 63 organizations, and in 49 of those cases either the IRS issued proposed or final revocations of nonprofit status, or the organization went out of business or became a for-profit firm on its own.

Write to Eleanor Laise at eleanor.laise@wsj.com

Printed in The Wall Street Journal, page D1

Who can fill Warren Buffett’s shoes?

The chairman and chief executive of Berkshire Hathaway,

who has run the conglomerate since 1965, announced this week that he has prostate cancer. The disease was detected early, and the 81-year-old Mr. Buffett is otherwise in excellent health. His prognosis is good.

WSJ’s Jason Zweig visits Mean Street to handicap the succession plan at Berkshire Hathaway to fill Warren Buffett’s shoes. Photo: AP.

But the news brought renewed attention to the question of who ultimately will succeed him. A skilled bridge player, Mr. Buffett is keeping his cards close to his vest. He has said the members of Berkshire’s board have chosen a successor whom they know and admire, as well as two backups.

Yet he hasn’t disclosed the successor’s identity—even to the chosen person. Nor would he reveal anything during my brief conversation with him this past week.

From the Mouth of Warren Buffett

See how often Mr. Buffett has mentioned current division bosses in annual shareholder letters, plus see analysis from two research groups on how positively he speaks of each, and read highlights.

Just the Documents, Please

Explore the Berkshire Hathaway annual shareholder letters, from 1977-2011.

View Interactive

Publicly naming his successor wouldn’t just make it hard for Berkshire to change its mind later if circumstances warrant; it would demoralize the two backup choices and make them more prone to poaching by competitors.

The successor will “probably be somebody who surprises us,” says David Winters, a shareholder for more than two decades whose mutual fund, the Wintergreen Fund,

holds $67 million in Berkshire stock. “I would bet on somebody who doesn’t have a high profile and who is not in the rumor mill.”

In hopes of unearthing some of those surprising names, I asked two independent teams of financial researchers—Paul Tetlock and Tim Scully at Columbia Business School and Richard Peterson at Los Angeles-based investment firm MarketPsych—to analyze what Mr. Buffett has written about Berkshire’s divisional executives in his annual letters.

Both groups of researchers specialize in “textual analysis,” or the use of mathematical formulas to measure the frequency and positive or negative tone of language. In previous studies—for example, of the wording in companies’ financial filings—these methods have been shown to improve forecasts of profitability.

Since 1977, Mr. Buffett has written nearly 400,000 words in his annual letters to shareholders. Messrs. Tetlock and Scully found that Mr. Buffett has mentioned Ajit Jain, head of Berkshire’s reinsurance group, far more often than any other current division boss—102 times, versus 60 for the next most-cited, Tony Nicely of Geico.

They found that Mr. Buffett referred slightly more positively to Mr. Jain than he did to any other Berkshire manager. However, Tad Montross, CEO of General Re, scored a close second for overall positivity and nudged out Mr. Jain in the proportion of financially positive words Mr. Buffett used. (For example, in his 2002 letter, Mr. Buffett wrote of “enormous progress” under Mr. Montross.) Not far behind were CEOs Brad Kinstler, of See’s candy; Greg Abel, of MidAmerican Energy; Don Wurster, of National Indemnity; Mr. Nicely; and Kevin Clayton, of Clayton Homes.

Christophe Vorlet for The Wall Street Journal

Using a different methodology that scores words by their association with happiness, Mr. Peterson found that Mr. Jain ranked considerably lower.

Among the current executives to whom Mr. Buffett has referred in emotional terms at least eight times, the one who scored the highest is Danny Goldman, chief financial officer of Iscar, Berkshire’s Israeli-based cutting-tool division (“incredible,” wrote Mr. Buffett in his 2009 letter, for example).

Mr. Nicely of Geico comes next (“stellar,” as the 2005 letter put it), followed by Mr. Abel of MidAmerican (“terrific,” 2008), Mr. Kinstler of See’s (“extraordinary,” 2007), Tom Nerney of U.S. Liability Insurance (“fabulous,” 2002) and Mr. Jain (“amazing,” 2006).

Among divisional CEOs to whom Mr. Buffett has referred at least four times in emotional terms, Mr. Peterson gives high positivity scores to Paul Andrews, of electronics distributor TTI; Jacob Harpaz, of Iscar; Grady Rosier of supply-chain manager McLane; and Matt Rose, of Burlington Northern Santa Fe railroad.

By far, the person to whom Mr. Buffett has referred the most is Ajit Jain. “This is true whether you look at the number of references, number of words or simply the number of years that he’s mentioned,” says Mr. Tetlock. Nevertheless, he warns, any inferences based, as these are, on a relatively small number of references “should be taken with far more than a grain of salt.”

To be sure, being praised isn’t the same as being crowned. Several executives Mr. Buffett has lauded lavishly in the past—including David Sokol, Joe Brandon and Rich Santulli—are no longer at Berkshire.

Still, textual analysis “is better than a plain guess, because it has some statistical underpinning to it,” says Mr. Peterson. “The probability should at least be higher than experts’ random estimates.”

Berkshire’s board, at least, knows who Mr. Buffett’s successor will be. That is more unusual than you might think.

“Succession planning at most companies is a hollow exercise,” says David Larcker, an expert on the topic who teaches at Stanford University’s business school. “It’s rare to have a plan in place where you know the next day [after a CEO dies] exactly what you’re going to do.”

—Rob Barry contributed to this article.—
intelligentinvestor@wsj.com; twitter.com/jasonzweigwsj

A version of this article appeared April 21, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: And Buffett’s Successor Is….

Amateur drone makers are sending their do-it-yourself creations up into the skies of Silicon Valley. WSJ’s Andy Jordan reports from San Francisco on the stunning footage they’re capturing.

Silicon Valley is taking its penchant for programming to the skies.

Thanks to a proliferation of inexpensive sensors, chips, cameras and other gizmos that can be tacked onto wannabe spy planes and helicopters, it’s easier than ever for technologists to build craft that fly themselves.

The techies are sending the three-to-six foot wide drones, guided by computers, radios and soon cellphones, to survey fields, capture action shots from the air or follow them around to snap photos at optimal angles. About their only constraints: a 400-foot ceiling for amateur drones set by the Federal Aviation Administration—and battery life.

Jason Short, a product designer for design firm Smart Design in San Francisco, has built about a dozen drones for $150 to $1,000 each. He says he spends at least 20 hours a week tweaking and flying them. Mr. Short, 40 years old says drones have allowed him to capture some hard-to-get photos of the Bay Area—including an image of himself on top of Corona Heights shot from far away.

Mr. Short, who helped design the Flip video camera, is working on technology that allows the drones to be controlled via iPhones and Android devices. He also recently built drones with a fancy chip that can process inputs from three gyroscopes, three accelerometers and a compass.”We’re ahead of the phones,” says Mr. Short, who adds that he prefers the helicopters to the airplanes, because they are easier to test in his backyard.

At Berkeley Marina, 49-year-old Mark Harrison, a software engineer at Walt Disney Co.’s Pixar Animation, takes his airplane drone and “quadcopter” out for a spin almost every weekend. His fanciest drone is equipped with a camera that allows him to see what it sees by wearing goggles. “It’s very similar to being in the air,” he says.

The drone subculture in Silicon Valley reflects the widening use of unpiloted aircraft by the U.S. military and law-enforcement agencies. Some entrepreneurs are imagining businesses based on the gadgets, such as the TacoCopter, a brainstorm of some computer programmers, which would deliver a taco to a customer’s door.

The growth and increased sophistication of the toy vehicles has raised questions about whether the technology should be in hobbyists’ hands. Privacy advocates, meantime, have raised concerns that drones could be used for surveillance.

The FAA allows amateurs to fly drones for fun, as long as they stick to rules like not flying the machines over people and keeping their drones below 400 feet and in their line of sight. The FAA has said it plans to allow commercial use—meaning businesses that deploy drones, such as the TacoCopter concept—in the coming years.

Meanwhile, demand is increasing for instruction on how to build a drone. Ace Monster Toys, a workshop for hackers in Oakland, plans to hold sessions for building 10 to 20 drones in coming months. Al Billings, Ace Monster’s president, who works on security communications for the Mozilla Foundation, says building a drone can be detailed, requiring soldering, other mechanical skills and uploading software to run the hardware.

“If things go crazy, it will fly in your face,” Mr. Billings says of the devices. One of the trickiest steps is calibrating a drone to fly outdoors based on the wind and other variables, he adds.

Some are proving drone-building can be a business. In 2009, Chris Anderson, editor-in-chief of Wired and a drone evangelist, co-founded 3D Robotics Inc. in San Diego. The firm sells drone parts, such as electronic pilots and sensors. He says it is growing at 50% a year and has multimillions in revenue.

Mr. Anderson likens the community of hobbyists to Silicon Valley’s Homebrew Computer Club in the 1970s, where Apple Inc. co-founders Steve Jobs and Steve Wozniak showed off their first personal computer. At the time, the future uses of computers weren’t clear, says Mr. Anderson, with the software applications materializing over time. “I think drones will go the same way,” he says.

Write to Jessica E. Vascellaro at jessica.vascellaro@wsj.com