McDonald's Corp has been sued by 52 Black former franchise owners who accused the fast-food giant of racial discrimination by steering them to depressed, crime-ridden neighborhoods and setting them up for failure.
Caroline Malone reports.
McDonald’s Corp is being sued by 52 Black former franchise owners who say the company racially discriminated against them.
They accuse McDonald’s of steering them to depressed, crime-ridden neighborhoods, setting them up for failure –and are seeking up to $1 billion in damages in the federal court in Chicago.
In a phone interview with Reuters, the plaintiffs' lawyer Jim Ferraro said: "It's systematic placement in substandard locations, because they're Black”adding ...“Revenue at McDonald's is governed by one thing only: location." The accusers say they were saddled with standard 20-year franchise agreements at stores that needed high security and insurance, with sales coming in below the national average.
Many venues became bankrupt.
McDonald’s denies treating Black franchises differently, and new CEO Chris Kempczinski said in a video to employees that the company stands for “diversity, equity and inclusion.” But that …"our franchisee ranks should and must more closely reflect the increasingly diverse composition of this country and the world." McDonald's U.S. restaurants are run by around 1600 franchises.
The plaintiff’s lawyer Ferraro says the number of Black-owned franchises has fallen in the last two decades from 377 to 186.
The complaint was filed in a Chicago federal court, It seeks up to $1 billion in damages.