Wendy's Continues To Investigate Malware Activity On POS

The Wendy's Company (NASDAQ:WEN) recently announced that it has detected harmful cyber activity in some franchise-operated restaurants. The company has disabled the malware as soon as it was discovered.

Wendy's has been investigating unusual credit card activity at some of its restaurants since last month. Per the primary investigation, the company reported on May 11 that the malware was discovered on the point of sale (POS) system at less than 300 franchised Wendy's restaurants in North America. In addition, 50 franchise restaurants were suspected of facing, or found to face, other cyber security issues. As a result of these, Wendy's instructed its investigator to look into the matter.

From the latest investigation, the company discovered a variant of the malware. Though similar in nature to the original, it differed in terms of its execution. A remote access tool was used to target POS systems. This malware has been detected at a large number of franchise restaurants' POS systems and the number is now estimated to be much higher than the 300 already affected. However, so far, there have been no reports of company-operated restaurants being attacked by the malware.

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Many franchisees and operators throughout the retail and restaurant industries contract third-party service providers to take care of their POS systems. Wendy’s believes the attacks might have been the result of certain service providers' remote access credentials been compromised, which made the POS system vulnerable to the malware.

The company has already disabled the malware upon detection at all its franchise restaurants. It continues to work with its experts and federal law enforcement to carry on its investigation.

Wendy’s currently has a Zacks Rank #2 (Buy).

Stocks to Consider

Better-ranked stocks in the restaurant industry include Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) , Famous Dave's of America Inc. (NASDAQ:DAVE) and Restaurant Brands International Inc. (NYSE:QSR) . All these stocks sport a Zacks Rank #1 (Strong Buy).