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Franchisors and Franchisees Make for Easy Cyber Targets

By Marc Lieberstein and Raymond Aghaian
September 01, 2022

We are increasingly hearing about security breaches, data leaks and other kind of data theft in the franchise world. This is because frequently the franchise systems operate as a connected mass of franchisees all of whom collect, store and transmit a diverse array of consumer and personal data to the franchisor. In other words, franchisors and franchisee make a nice easy target for cyber theft.

In December 2018, Cybint News reported that "[43%] of cyberattacks target small business. 64% of companies have experienced web-based attacks. 62% experienced phishing & social engineering attacks. 59% of companies experienced malicious code and botnets and 51% experienced denial of service attacks." Cybersecurity: A Global Priority and Career Opportunity (ung.edu). And whether you are a large or small franchisor, it could cost a lot of money to remedy the breach or satisfy any breach claims. IBM reports that it takes an average of 280 days to identify and contain a data breach, and that the "data breach average cost increased 2.6% from USD 4.24 million in 2021 to USD 4.35 million in 2022. The average cost has climbed 12.7% from USD 3.86 million in the 2020 report." Cost of a Data Breach Report 2022 (IBM).

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