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Lawsuits & Litigation

Black McDonald’s Franchisees File Lawsuit Claiming Racial Discrimination

— September 1, 2020

McDonald’s has vehemently denied the lawsuit’s allegations, which include claims of Black franchisees being forced to purchase high-rent properties in “dangerous locations.”

Black former McDonald’s franchisees have filed a federal lawsuit against the fast food corporation, claiming they faced discrimination in the course of running their restaurants.

The complaint, notes USA Today¸ was filed Tuesday in U.S. District Court for Illinois. In it, 52 former McDonald’s franchisees say they were denied the same attention and opportunities given to their White counterparts.

The franchisees, says USA Today, operated a cumulative total of about 200 McDonald’s restaurants across the United States.

However, they say that McDonald’s coerced them into opening and operating restaurants in “economically depressed” communities and otherwise “dangerous locations.” Consequently, the plaintiffs claim they had to pay high rents and direct more money to maintenance, which decreased their ability to turn a healthy profit.

Furthermore, the franchisees say they were misled when they first acquired stores. McDonald’s allegedly prevented Black entrepreneurs from acquiring restaurants “on the open market,” and denied them access to the same economic research and financial support lent to White businesspeople.

The plaintiffs also claim that McDonald’s gave Black-owned businesses “bad” reviews to force them out of the company’s franchising system.

No matter what happened to Black-owned franchises, the plaintiffs assert that McDonald’s was nonetheless making money atop Black labor and Black consumer expenditure–yet the company repeatedly and consistently refused to offer Black franchisees the same support it offers others.

“McDonald’s proclaims a commitment to racial equity, profits from its Black customers, yet places Black franchisees in locations that are destined to fail, with low-volume sales and high operating costs, leading to consistent profit shortfalls or losses, impeding Black franchisees’ efforts to grow as they acquire other stores, necessary for success under McDonald’s own franchise model, to force Black franchisees out, repeating this pattern of misconduct over and over again,” the lawsuit states.

McDonald’s sign. Image via Flickr via Wikimedia Commons/user:Kenny Louie from Vancouver, Canada. (CCA-BY-2.0).

In response to the lawsuit, McDonald’s has vigorously and categorically denied the claims against it.

In a statement, McDonald’s stated that its many Black franchisees own and operate store locations across the United States—in rural, urban, and suburban settings. The company stressed that franchisees have freedom in choosing and purchasing locations, and are never forced into unfavorable markets.

“These allegations fly in the face of everything we stand for as an organization and as a partner to communities and small business owners around the world,” McDonald’s said in a statement to USA Today. “Not only do we categorically deny the allegations that these franchisees were unable to succeed because of any form of discrimination by McDonald’s, we are confident that the facts will show how committed we are to the diversity and equal opportunity of the McDonald’s System, including across our franchisees, suppliers and employees.”

The lawsuit is seeking between $4 and $5 million for each plaintiff for lost revenue and accrued debt due to McDonald’s allegedly discriminatory practices.


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