Several high profile ransomware attacks have recently rocked the franchise world fomenting uncertainty and anxiety about franchisors’ legal obligations and liability. Ransomware attacks essentially kidnap a company by shutting down its systems and holdings its data hostage until a ransom fee is paid. In addition to the quantifiable hard costs of paying ransom and hiring experts to mitigate damage and re/build cyber defenses, ransomware victims can be damaged by: (a) third-party liability to the customers and other original owners of compromised data; (b) interruption of business operations during the course of and recovery from an attack; and (c) injury to reputation value in the loss of consumer confidence, appearance of incompetence, and customer attrition. In today’s digital golden era, data is among the world’s most valuable assets, earning the tagline: “data is the new oil.” It therefore comes as no surprise that cybersecurity, which has been a hot topic for years, is garnering increased attention and resources from businesses of all sizes and stages. Yet with each new development in defensive cybersecurity, cybercriminals come up with just as many ways to get around those defenses.
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