Lawstreet Journal

McDonald's Faces Lawsuit for Racial Discrimination by 52 Former Franchisees

Lawstreet Journal 3 Sep 2020 8:56pm

Image courtesy: Lawstreet Journal Business McDonald's Faces Lawsuit for Racial Discrimination by 52 Former Franchisees

On Monday ( August 31, 2020) , a lawsuit has been filed against McDonald's in the U.S. District Court for the Northern District of Illinois seeking compensatory damages averaging $4 to $5 million per store with collective damages of more than $1 million. McDonald's is accused of steering Black franchisees to restaurants in undesirable locations in inner cities for years. More than 50 former franchisees are in this lawsuit. It is alleged that it unfairly treated Black owners by selling them subpar stores and failing to support their businesses.

The complainants said that they saw improvements in their businesses in the years soon after a parity agreement was made between the company and franchisees around 1996. But by 2002, the National Black McDonald’s Operators Association went back to the company to negotiate for more, according to a letter included in the suit, and progress further stalled in recent years.

The suit contends that McDonald used to provide misleading financial information to black owners to induce them to purchase the least desirable locations and required them to invest in rebuilds or renovations within short time frames not required of white franchisees.

The complainants also alleged that they were not given the same opportunities as their white counterparts and they faced systematic and covert discrimination. They also claimed it to be a financial suicide mission as Black franchisees were at such a significant disadvantage. They said they have lost more than 200 locations over the past decade because of the misconduct of the company.

The allegations… Continue Reading...

Tagged: McDonalds  
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