More than 50 Black former franchisees are suing McDonald’s, accusing the chain of racial discrimination and saying that McDonald’s “knowingly discriminated” against them.
In the lawsuit, which was filed in Illinois court this week, the plaintiffs claim that they were “misled and denied equal opportunity to economic success” by McDonald’s and that the company led them to open restaurants “in locations that are destined to fail, with low-volume sales and high operating costs.” This resulted, according to the lawsuit, in the plaintiffs earning at least $700,000 less than McDonald’s national average. They characterized taking on these locations as a “financial suicide mission.”
The lawsuit claims that these franchisees were pushed into buying up these locations with McDonald’s using tactics like “rushing Plaintiffs, and requiring same-day inspections and saying “that it could take months, if not years, to be offered another restaurant if they turned down a site.” They also said the chain “continued to deny Plaintiffs the opportunity to own and operate franchises in more profitable locations, unless these more profitable locations were packaged with low-volume, high-cost locations.”
“Revenue, at McDonald’s, is based on one factor and one factor only: location,” the plaintiffs’ attorney James Ferraro told CNBC: “It has nothing to do with the taste of a Big Mac. You don’t go to a different McDonald’s because the Big Macs are better. You go to the closest McDonald’s, period.”
The 52 former franchisees, who operated stores between 2010 and 2020, are seeking more than $1 billion collectively in damages. In response to the lawsuit, McDonald’s said that it does not place franchisees in locations and though it may recommend locations, franchisees ultimately select the which ones they want to purchase. They also issued the follow statement to Delish in relation to the case:
This lawsuit comes following a Business Insider report late last year that explored accusations of discrimination from Black franchisees. According to CNBC, this is at least the third racial discrimination lawsuit filed against the company this year.
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