Understanding the Restaurant Cybersecurity Threat Landscape

Cyber risks have been around for a long time, but that doesn’t mean they’re static. Attacks are growing more sophisticated and more expensive.

The average cost of a data breach in 2023 was almost $4.5 million, a figure that’s more than 15% higher than just three years prior. Statista’s market insights forecast the global cost of cybercrime will increase from $9.22T in 2024 to $13.82T in 2028. With modern threats proving to be more persistent, severe, and impactful, franchisors and franchisees must work together to protect the brand’s reputation and maintain customer trust. However, balancing those goals against the reality of financial limitations and franchisor/franchisee relationship dynamics makes it difficult to prioritize cybersecurity. Understanding the current state of cyber risk can help restaurants simplify their security strategies and focus their resources most effectively.

When looking at the franchise threat landscape today, the gaps between the digital haves and have nots are a primary challenge. Large franchisors and franchisees are on one side. Hackers looking to snag a multimillion-dollar payout may be tempted by these large organizations. They process huge volumes of valuable data and their networks are often widely integrated with external partners and providers. But large organizations are also more likely to have significant cybersecurity expertise on staff and advanced protective measures in place to thwart attacks, making them a high-effort target that may produce low-end results.

Artificial intelligence (AI) has emerged as another advantage for attackers, enabling them to personalize phishing emails for highly effective business email compromise scams to introduce ransomware packages at scale. It’s a type of risk restaurant brands and operators haven’t seen before, and the potential for financial loss and reputational damage is truly massive. And though many AI-driven breaches have targeted big companies, a vulnerability discovered within a smaller, connected organization, such as a franchisee, can offer an easy entry point for intruders.

On the other side of the table are the smaller and emerging franchisors and franchisees. Typically comprised of small business owners, this group may not have dedicated IT resources or the latest security tools. Very few have a CIO or CISO to orchestrate and maintain a strong cybersecurity posture. Smaller organizations are more likely to use consumer-grade solutions that aren’t designed to repel ransomware and other business-oriented threats. Once a restaurant brand or franchisee has reached a critical number of stores—typically somewhere between 10 and 50 locations—their cyber needs often come into focus, but hackers know the best time to attack a company is when it’s small, when it can’t afford the IT tools and security experts to protect the business.

Franchising relationships introduce another twist: large franchisors with strong cybersecurity resources are often limited in their ability to extend cyber protection to their much smaller franchisees out of liability concerns. Just as franchisors do not want to be perceived as joint employers with their franchisees and bear employment responsibilities, franchisors also do not want to be solely—or even primarily—responsible for the cybersecurity integrity of their franchisees. While many franchisors will dictate an integrated cybersecurity solution for the Point-of-Sale (POS) system, they leave franchisees to independently figure out their own cyber defense posture for their locations, including store managers’ PCs, IoT devices, video surveillance cameras, and much more.

Restaurant technologies are prime targets for cybercriminals. However, the franchisor has a vested interest in the cyber defenses of their franchisees, who act as trusted partners and may be the face of the brand for customers. When franchisees are breached, the criminals have a foothold from which to attack the franchisors and harm the reputation of the entire company. This integral relationship means it’s in the franchisor’s best interest to elevate the cybersecurity posture of their franchisees.

Partnering with a managed services provider (MSP) with experience in the restaurant industry gives franchisors and franchisee owners alike access to top-tier security expertise. The introduction to vetted MSPs provides an opportunity for franchisors to avoid direct responsibility for franchisees’ cybersecurity, while still ensuring everyone can connect with the type of support they need. MSPs can collaborate with the franchisee and tailor solutions to align with the individual needs of each small business operator. A security strategy implemented with the support of an experienced MSP can also save restaurants money. Avoiding ransomware and other threats is less expensive than dealing with an attack, and catching potential network intrusions early enables you to respond sooner and further limit the damage.

Developing a strong security posture doesn’t need to be financially draining, complicated, or overwhelming. The right MSP can help evaluate emerging threats and work with you to implement proven protective measures. Your partner will also provide recommendations tailored to align with the rest of your technology environment, as well as your budget limitations and real-world business risks. With an experienced MSP on your side, you don’t need to face today’s cybercriminals alone.