The Franchise Guide To Data Privacy

Privacy And Franchising, Rules, Laws, And Best Practices

Though franchise businesses are often local, brick-and-mortar locations, franchise businesses are often subject to internet-focused laws about data privacy. In this blog post, we explain some of the basics.

Franchise businesses often bridge the gap between two different worlds: between big corporations and independent businesses; between national chains and local operations; between brick-and-mortar operations and virtual ones.

It’s that last one that’s a concern. While franchise operations — especially at the ground level — feel very much like local businesses, they can often find themselves subject to national and international laws about customer privacy.

In this blog post, we talk about the ins and outs of privacy regulation, and how they can impact franchise operations. Read on:


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Franchises and Data

A franchise’s websites collect a wide variety of first-party data on their users — where they’re located and what they do while they’re on the page, obviously, but also things like email addresses, home addresses, contact and credit card information, and more depending on the industry.

Individual franchisee locations collect a lot of the same data as well. When a customer makes a purchase, creates an account, signs up for a loyalty card, hands over their dog’s vaccination records, or submits a prescription, that all goes into a file somewhere for the franchise.

Customer and user data is also collected during online advertising campaigns, of course.

Some of this information is crucial for a thriving business. First-party data is crucial to gauge the success of advertising campaigns, to do market research, and to optimize business practices. Business CRMs are often crammed with various bits of consumer information.

What you do with that information is often subject to the law.

Privacy Laws In The United States

California, Colorado, Connecticut, Utah, and Virginia have all implemented sweeping privacy laws in recent years, with more states likely to follow suit in the near future. Many states have used the California law as a template to implement their own, though there are subtle differences from state to state. Generally speaking, however:

  • These laws affect anybody who does business within the borders of their state, including selling products, providing services, or manufacturing products.

  • Any state that has or handles data on a certain number of state residents (varying from state to state, but the number is in the thousands) or generates revenue through the sale of data.

The California laws go a little further, also governing data on employment or employment applications, and also has thresholds for the amount of revenue businesses conduct in their state.

Privacy Laws In The Rest Of The World

Implemented in May of 2018, the General Data Protection Regulation (GDPR) is the EU’s answer to the privacy concerns that have been growing for years — and the inspiration for many of the laws US states have begun to adopt on their end. The principles of the law say users must consent to having their data collected and processed, and further go into obligations the business may have towards safeguarding that data.

This law is the biggest reason that websites have started to have “opt-in” screens when you first arrive, requesting your consent to the use of cookies. It’s also the reason that Google announced that they would be moving away from third-party cookies in coming years (though the timeline is fuzzy at the moment).

Though the EU is one of the major players in global business, they aren’t the only one. Further South, Australia and New Zealand have also implemented laws protecting the privacy rights of users and customers within their borders.

US-based businesses may wonder why they should care about privacy regulations in other countries. For starters, in certain cases those laws affect data collected on visitors to your website, if those visitors are logging in from overseas. 

More-importantly, the EU and other jurisdictions are currently a few years ahead of the US when it comes to privacy regulations, often inspiring the laws taken up by state authorities in the US down the line. Moving to be in general compliance with EU regulations may position you to be ready when similar laws go into effect in the US.

What Does This Mean For Franchises?

Obligations vary from state to state and jurisdiction to jurisdiction, but (keeping in mind that the author of this post is not a lawyer) generally:

  • Franchises must provide a disclaimer about the type of data collected and who has access to it. When you see a website’s “privacy policy” (usually near the bottom), this is what that is.

  • Businesses have to respect a user’s rights to access their personal data, receive a copy upon request, delete that data upon request, and more.

  • Request consent before collecting sensitive information like location data, race/gender, health data, religious beliefs, sexual orientation, or any information whatsoever about kids under 13.

  • Provide reasonable protection against hacking, so that user data is safe from bad actors and unauthorized users. This applies to any personal data you’re in charge of storing.

Obviously, the business of a lot of this should be established at the franchisor level, but franchisees should be taking steps to familiarize themselves with all the relevant laws and make sure they’re complying. Staying in compliance with the law is everybody’s responsibility.

Making sure you have updated privacy policies and terms and conditions on your page will likely fall to the franchisor, however.

Final Thoughts

Privacy is becoming more important all the time — and it’s important for franchise businesses to stay abreast of the latest regulations happening around the world. Otherwise, you could be caught flat-footed when big changes happen.

If you’re a franchise business looking to promote your business, Balihoo is the leader in multi-location marketing for a reason. You can get started today by reaching out to our team. With a focus on hyperlocal marketing, pay-per-click and paid social campaigns, Balihoo knows how to turbocharge franchise marketing efforts.


Written by
Sean Kelly, Senior Content Writer

Sean Kelly is a Senior Content Specialist, St. Louis-based engagement expert with 20 years of experience in content writing, and 8 years in adtech.

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