Buying a Franchise

CyberSecurity for Franchisees

Cyber securitySome of us head into new ventures with rose-colored glasses and a glass half full mentality. These people are statistically more likely to succeed, if only because they keep going through the difficult times, buoyed up by their optimism.

Others see the risks… all the risks, sometimes including risks that aren’t likely to affect them. These people may make things harder for themselves. But when you’re choosing a franchise investment opportunity, it’s smart to put on that risk awareness, at least temporarily. A realistic understanding of the pros and cons of the various opportunities you’re considering helps you make the best choices.

A recent article in Entrepreneur magazine suggested that franchisees might be especially vulnerable to cyber crime for several reasons:

  • Proprietary software from the franchisor — a central part of the management of many franchises — can come with security issues. Franchisees will probably not be aware of these issues and will almost certainly not be able to identify them.
  • Franchises are essentially small businesses, and so are likely to have the security issues small businesses usually have. For example, you’ll probably use the same computer for your point of sale system or customer relationship management system that you (or your workers) use for email, surfing the web, or creating marketing documents. This can increase the vulnerability of your POS or CRM.
  • While franchises are often small businesses in terms of operations, they may be perceived by cybercriminals as large businesses and therefore appealing targets.

These issues don’t guarantee that your business would have cyber security issues. While popular media has given us the idea of the criminal mastermind who hacks into computer systems from a remote location, the top source of computer data breaches is casual carelessness.

The password written on a Post-it note and stuck onto the wall next to the computer, the worker who logs into the system in a public area and then walks off and leaves the screen ready for use, or the worker who prints out sensitive information and leaves it lying around — these kinds of daily carelessness are the most common reasons for data security breaches.

Still, there are questions you should ask the franchisors you’re considering. If the software they provide for you to manage the business is on-premise (that is, it lives on your computer at your place of business), find out what security measures they’ve baked into it. Is it password protected? Is it possible to give different levels of access to users — for example, can counter help use the POS system without seeing sensitive customer information?

If the software is in the cloud, ask about the security measures used on the servers that host the software. Find out who will have access to your data — for example, your customers’ credit card information or email addresses — and what kinds of rules they follow to limit that access.

If the franchisor doesn’t provide management software, find out how they send information and how you’ll be expected to furnish data to them. A franchise that isn’t as careful as you’d like about data security doesn’t have to be crossed off your list, but you will have to think about how you’ll make up for their security shortcomings.

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