Franchises Under Fire: Cyberattacks and What They Teach Us

Cybersecurity has become a critical concern for both franchisees and franchisors, as the interconnected nature of franchise systems exposes them to increasingly sophisticated cyber threats. The franchise model, which relies on a central brand and distributed operations, creates a complex web of digital dependencies. Each franchisee typically operates with some autonomy but remains digitally linked to the franchisor’s systems for inventory, customer data, financial transactions, and marketing. This structure, while efficient, also presents a broad attack surface for cybercriminals. A breach in one location can quickly escalate into a network-wide crisis, affecting operations, customer trust, and brand reputation.

Recent Cyberattacks

Recent cyberattacks in 2025 have underscored the vulnerability of franchise networks. One example of a disruptive incident came from the retail sector. Chanel and Pandora were among the companies targeted in a wave of cyberattacks during the summer. These breaches exposed sensitive customer data, including personal and financial information. Franchisees operating under these brands faced intense scrutiny and reputational damage, even if they were not directly responsible for the breach. The shared infrastructure and branding meant that customers viewed the franchisees as part of the compromised entity. This scenario illustrates the importance of robust cybersecurity protocols not just at the corporate level but also at each franchise location.

In one of the most alarming franchise-related breaches of 2025, global staffing firm Manpower confirmed that its independently owned Lansing, Michigan franchise was compromised by ransomware criminals who stole personal data belonging to 144,189 individuals. The attack, which occurred between late December 2024 and mid-January 2025, led to an IT outage and exposed sensitive information including social security cards, passports, corporate bank statements, and employee records. The extortion group that claimed responsibility boasted that they had exfiltrated 500GB of confidential data and taunting the company with threats of public exposure. While ManpowerGroup emphasized that its corporate systems were unaffected due to the franchise’s independent data platform, the incident still cast a shadow over the brand’s global reputation. This case highlights how even isolated franchise operations can become entry points for devastating cyberattacks, reinforcing the need for rigorous cybersecurity standards across all branches of a franchise network.

Driving home the susceptibility of franchisor data, a story was reported in July 2025 about a third-party, AI-powered hiring platform used by McDonalds’ franchisees exposing information belonging to millions of job applicants. The flaw was traced to a default admin password (“123456”) and unsecured API endpoints that allowed unauthorized access to names, emails, phone numbers, and chat transcripts. Security researchers discovered the vulnerability and demonstrated how easily the data could be extracted. Paradox.ai, the developer behind the hiring system, quickly patched the issue and launched a bug bounty program to encourage ethical disclosures. The incident raised serious concerns about the security of AI-powered recruitment tools and the oversight of third-party vendors.

Increased Cybersecurity: A Safety Imperative

These incidents demonstrate that cybersecurity is no longer a back-office concern; instead, it has become a frontline business imperative. Franchisors must implement centralized security policies that mandate consistent standards across all locations. This includes regular software updates, endpoint protection, and access controls. Franchisees, in turn, must invest in local cybersecurity measures such as secure point-of-sale systems, encrypted communications, and employee training programs. Awareness is key; many breaches begin with simple phishing emails that trick employees into revealing credentials or clicking malicious links. A well-informed workforce can serve as the first line of defense against such attacks.

Moreover, both franchisors and franchisees need to develop and rehearse incident response plans. These plans should outline the steps to take in the event of a breach, including how to isolate affected systems, notify stakeholders, and recover data. Speed and coordination are essential during a cyber crisis, and having a clear protocol can make the difference between a minor disruption and a catastrophic failure. Legal and regulatory compliance also plays a role — data protection laws are becoming stricter, and failure to safeguard customer information can result in hefty fines and lawsuits.

How Citrin Cooperman Can Help

The cyberattacks of 2025 have made it abundantly clear that cybersecurity is a shared responsibility within franchise systems. The distributed nature of these businesses means that vulnerabilities can exist at multiple levels, and attackers are increasingly exploiting these weak links. By investing in comprehensive cybersecurity strategies and fostering a culture of vigilance, franchisors and franchisees can protect their operations, customers, and brand equity. The stakes are high, but with proactive measures, the franchise model can remain resilient in the face of evolving digital threats.

For more information on how Citrin Cooperman can help protect your franchise from modern cyber vulnerabilities, please reach out to Michael Iannuzzi or Kevin Ricci.