Over 50 Black former franchisees sue McDonald’s for discrimination

McDonald's faces a discrimination lawsuit from over 50 former franchisees.

Sep 1, 2020

McDonald's Monthly Sales Drop Again, Continuing Worldwide Slump — NEW YORK, NY - FEBRUARY 09: A McDonald's sign hangs in lower Manhattan on February 9, 2015 in New York City. McDonald's Corporation has said sales in January fell a worse-than-expected 1.8%. While the fast-food restaurant chain said U.S. and Europe sales showed signs of improvement, Asia sales slowed. McDonald's is facing new completion from trendier and more health conscious fast food chains like Chipotle Mexican Grill and Shake Shack. (Photo by Spencer Platt/Getty Images)

A new lawsuit against McDonald’s corp claims Black franchisees were set-up to fail by being restricted to problem areas.

Reuters reports that 52 Black former franchisees claim the company pushed them into high-risk neighborhoods, claiming racial discrimination. The complaint, which seeks up to $1 billion in damages, alleges McDonald’s did not provide the same opportunities to Black franchisees as white franchisees.

“It’s systematic placement in substandard locations because they’re Black,” said the plaintiffs’ lawyer Jim Ferraro to Reuters. “Revenue at McDonald’s is governed by one thing only: location.”

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According to Reuters, the plaintiffs claim Black owners were placed under the McDonald’s 20-year franchise agreements in locations that mandated high security and insurance costs with below-average sales with bankruptcy as the common solution.

This is not the first discrimination lawsuit filed against the Chicago-based corporation this year. theGrio reported that two Black executives at McDonald’s filed a federal lawsuit with claims of racism by the company in January.

Victoria Guster-Hines and Domineca Neal allege they were passed over for raises, threatened, and subjected to racial slurs and an overall “hostile and abusive work environment,” while working at the McDonald’s Dallas office.

In their lawsuit, it notes over $2 million in lost pay and benefits for Guster-Hines and “hundreds of thousands of dollars” for Neal.

According to Reuters, McDonald’s has denied the claims in both lawsuits. The company reportedly recommends locations, but places the final decision on the franchisee.

“McDonald’s stands for diversity, equity, and inclusion,” Chief Executive Chris Kempczinski said in a video to employees according to the news outlet. “Our franchisee ranks should and must more closely reflect the increasingly diverse composition of this country and the world.”

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