Business

Former Black Franchisees Accuse McDonald’s of Racial Discrimination

A class-action lawsuit names McDonald’s for discrimination allegations. Former Black franchise operators filed the case in federal court. They accused the fast-food giant of racial discrimination. Now the ex-franchisees are asking the company for $800 million in compensatory damages.

Racial Discrimination Lawsuit

On Monday, 52 former franchisees identified McDonald’s in a filing that accused the company of systematically discriminating against them. According to the lawsuit, McDonald’s was allegedly favoring White franchisees in terms of locations and financial assistance. 

Those Black-owned franchises allegedly get locations that white operators usually dismiss. In turn, Black owners had to deal with lower sales compared to other stores, and still, they were allegedly pumping higher operating costs.

Posted by Forbes on Tuesday, September 1, 2020

Moreover, the lawsuit also claimed that McDonald’s denied Black franchisees aid provided to White operators. 

McDonald’s Response

The next day, McDonald’s immediately issued a response. It denies the suit’s claims and states that the accusations contrast to what the company stands for.

Furthermore, the fast-food giant said that they 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.”

In addition, the chief exec of McDonald’s sent a video on Tuesday, responding to the lawsuit. Chris Kempczinski said they “disagree with the claims in the lawsuit.” However, as he also mentioned, McDonald’s could still boost diversity among operations.

Franchising

Per CNN Business, franchisees operate over 90 percent of all McDonald’s stores in the US. The company told Forbes that the lawsuit claims are inaccurate. It noted that “McDonald’s may recommend locations, franchisees ultimately select the locations they wish to purchase.”

James Ferraro, who represents the plaintiffs, said: “These people were put in very, very risky situations. And they were so happy to become part of the McDonald’s family… and what McDonald’s did is basically abuse them.”

The franchise operators said they collectively operated over 200 stores in 1988 to 2018. The US District Court for the Northern District of Illinois received the lawsuit filing Monday night.

Phillip Malone

Phillip started his career as a freelance journalist who wanted to change the way traditional news reporting work. His venture, Feed Voice, is a move to introduce to the readers a fresh new wave of news reporting. As a learned founder of the news platform, he renders his genius news pieces based on Automobile niche.
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