Franchisors Must Find The Right Data Security Balance

Law360, New York (August 21, 2015, 10:23 AM EDT) -- Gavin George

Marc Legrand In recent years, a number of franchisors have fallen victim to data breaches, including Jimmy John's,[1] Dairy Queen,[2] The UPS Store,[3] Wyndham and SuperValu.[4] Between lost goodwill, the cost of investigating and responding to the breach, private lawsuits, and government enforcement actions, it's no surprise that such data breaches are expensive. In 2014, the Ponemon Institute estimated that U.S. organizations paid an average of $5.9 million dollars per data breach.[5]

Franchisors strive to avoid liability for the acts and omissions of individual franchisees, including acts or omissions that contribute to data breaches. That motivation, however, is in...

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