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Protecting Personal Data in Franchise Systems: New Notification Laws

By Nick Akerman and Gary R. Duvall
February 26, 2008

Over the past four years, 38 states have enacted laws mandating consumer notifications if there is a theft of personal data from a company's computers. The Federal Trade Commission ('FTC') has brought enforcement actions against companies for not properly protecting sensitive personal data. These state and federal laws are in addition to general privacy laws and policies that require advanced disclosures to those giving personal information.

How can a franchisor or multi-state franchisee comply with 38 state laws and with the FTC determinations? This article provides an overview of how to reduce potential liability. It will also discuss how franchisors with access to customer data of their franchisees should implement mandatory programs for their systems.

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