Black Former Franchisees Sue McDonald’s for $1 billion in Racial Discrimination Lawsuit

(The AEGIS Alliance) – CHICAGO, ILLINOIS – More than 50 Black former McDonald’s franchise owners have filed a lawsuit against the fast-food giant. In the suit, it’s alleged that the company directed them towards restaurants that were less-profitable and they didn’t receive the same support and opportunities from the company that White franchisees were given. The plaintiffs are looking for as much as $5 million per store as compensation, and claim they had been sent on a “financial suicide mission.”

The lawsuit involves 52 plaintiffs who were the owners of about 200 U.S. stores in the fast-food chain. The plaintiffs are alleging they had been forced into selling their store locations over the past decade because of actions by McDonald’s. The lawsuit was filed on Tuesday in a Chicago federal court, the city McDonald’s is based in.

McDonald’s directed Black franchisees towards stores in inner-city neighborhoods that had lower sales volumes, but that also had higher security and insurance costs. It’s alleged the company provided them with financial information that was misleading or pushed them into quickly deciding to purchase the stores when they became available, according to the lawsuit.

Once Black franchisees were the store owners, the company would ask them to remodel or rebuild within a shorter time period of time than franchisees who were White, without any of the rent relief or other financial support that White franchisees were given, the lawsuit alleges. Franchise owners who were Black had also been denied the chance to buy stores that were more profitable and in better neighborhoods, the lawsuit says.

“McDonald’s proclaims a commitment to racial equality, profits from its Black customers, yet places Black franchisees in locations that are destined to fail, with low-volume sales and high operating costs, leading to consistent profit shortfalls or losses,” it’s alleged in the lawsuit.

The plaintiffs’ sales were an average of $2 million each year as a result of this. In contrast. the average McDonald’s store in the U.S. brought in $2.7 million annually from 2011 to 2016, and in 2019 stores brought in $2.9 million on average.

McDonald’s denied the allegations in a statement and said, “These allegations fly in the face of everything we stand for as an organization and as a partner to communities and small business owners around the world.”

“Not only do we categorically deny the allegations that these franchisees were unable to succeed because of any form of discrimination by McDonald’s, but we are also 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.”

The lawsuit also alleges a “cash flow gap” between franchise owners who were Black and White.

“Revenue is determined by one thing and one thing only: location,” James Ferraro said, the attorney based in Miami-based who is representing the plaintiffs. “It’s a Big Mac. They’re the same everywhere.”

In addition, Ferraro noted the number of McDonald’s franchisees who are Black has declined by half in the past two decades. In 1998, the fast-food chain had 377 Black franchisees, and now it currently only has 186. The amount of franchised restaurants have also more than doubled to 36,000 at the same time.

The damages McDonald’s is collectively facing could amount to $1 billion, due to the number of involved locations and the compensation the plaintiffs are seeking.

There is a troubled history that McDonald’s has with Black franchisees. Activists boycotted four McDonald’s in Cleveland in 1969 until the company sold the stores to Black owners. A Black franchise owner from Los Angeles sued McDonald’s for discrimination in 1983; and eventually, McDonald’s settled with the man for $4.5 million.

McDonald’s leadership acknowledged Black franchisees weren’t on par financially with their White counterparts in 1996 and agreed that changes needed to be made. McDonald’s first Black president and CEO named Don Thompson served from 2012 to 2015.

However, discrimination charges continued. Two Black McDonald’s executives filed a lawsuit against the company in January. They claimed McDonald’s was shifting advertisements away from customers who were Black, and gave Black-owned stores harsher grades than White-owned establishments, and used business plans that had a discriminatory impact on Black franchisees.

McDonald’s stated it disagreed with the characterization of its actions at the time. The company mentioned that all of its field vice presidents and 45% of its corporate officers are people of color.

Kyle James Lee – The AEGIS Alliance – This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Kyle James Leehttps://www.theaegisalliance.com
Majority Owner of The AEGIS Alliance. I studied in college for Media Arts, Game Development. Talents include Writer/Article Writer, Graphic Design, Photoshop, Web Design and Development, Video Production, Social Media, and eCommerce.

The AEGIS Newsletter sends out during reasonable U.S. hours after 8 articles are published. May also include occasional updates about our YouTube Channel. Signup Form:


Please make a monetary contribution toward raising awareness of important social and humans rights issues that don't show support for politicians via Crypto. We also accept PayPal and Checks by mail. 70% go toward these important projects. Click here to Donate.

  • Bitcoin
  • Ethereum
  • Xrp
  • Litecoin
  • Stellar
  • Bitcoin cash
  • Dogecoin
  • Usdcoin
  • Aave
  • Uniswap
  • Wrappedbitcoin
  • Eos
  • Cosmos
  • Tezos
  • Synthetix
  • Dash
  • Maker
  • Dai
  • Ethereum classic
  • Zcash
Scan to Donate Bitcoin to 35fJFcE1xQPwt1KujXUrmKn9J8WEnm9BbM

Contribute Bitcoin to this address

Scan the QR code or copy the address below into your wallet to send some Bitcoin

Scan to Donate Ethereum to 0x2764fe441CB5EBd9919eDAD4b2Bf70Dc2dC399Da

Contribute Ethereum to this address

Scan the QR code or copy the address below into your wallet to send some Ethereum

Scan to Donate Xrp to rw2ciyaNshpHe7bCHo4bRWq6pqqynnWKQg:::ucl:::4125838298

Contribute Xrp to this address

Scan the QR code or copy the address below into your wallet to send some Xrp

Scan to Donate Litecoin to MKVu1osxKsRSBc7U2NdgdYnyjMPanMUxx9

Contribute Litecoin to this address

Scan the QR code or copy the address below into your wallet to send some Litecoin

Scan to Donate Stellar to GDQP2KPQGKIHYJGXNUIYOMHARUARCA7DJT5FO2FFOOKY3B2WSQHG4W37:::ucl:::1372392101

Contribute Stellar to this address

Scan the QR code or copy the address below into your wallet to send some Stellar

Scan to Donate Bitcoin cash to qr9j84dx9736ultjr7ty2dcr5rl27z5m2vx0hjqw57

Contribute Bitcoin cash to this address

Scan the QR code or copy the address below into your wallet to send some Bitcoin cash

Scan to Donate Dogecoin to D6FCQDbi1cenyKAyg6pWLy6gnhdRra2tXG

Contribute Dogecoin to this address

Scan the QR code or copy the address below into your wallet to send some Dogecoin

Scan to Donate Usdcoin to 0x0D835EF9e29dDD73C380F0d6E191EABb1ff09948

Contribute Usdcoin to this address

Scan the QR code or copy the address below into your wallet to send some Usdcoin

Scan to Donate Aave to 0x8B0bCAc87797F076c79875B29b8Bd0B27600E653

Contribute Aave to this address

Scan the QR code or copy the address below into your wallet to send some Aave

Scan to Donate Uniswap to 0xdc3BCc8Fb024711a1a5EFA9AA03684A5eC7e1E53

Contribute Uniswap to this address

Scan the QR code or copy the address below into your wallet to send some Uniswap

Scan to Donate Wrappedbitcoin to 0x751EA7C46f2c2300dBB152A8AEa15d3635c28239

Contribute Wrappedbitcoin to this address

Scan the QR code or copy the address below into your wallet to send some Wrappedbitcoin

Scan to Donate Eos to coinbasebase:::ucl:::4148396760

Contribute Eos to this address

Scan the QR code or copy the address below into your wallet to send some Eos

Scan to Donate Cosmos to cosmos1jzsxgx8q9hcfrqj9rp5zcmwrg036mq3293kmgy

Contribute Cosmos to this address

Scan the QR code or copy the address below into your wallet to send some Cosmos

Scan to Donate Tezos to tz1iJcMLYSBH3jpMGQnmHMhhyHwYbjPtGxja

Contribute Tezos to this address

Scan the QR code or copy the address below into your wallet to send some Tezos

Scan to Donate Synthetix to 0xf698dbbeEa1643Ba38E96C36AB6Bb159b243EfF1

Contribute Synthetix to this address

Scan the QR code or copy the address below into your wallet to send some Synthetix

Scan to Donate Dash to XgCyxihABi2Aj9F9XEcfWuffm24jv7BXx7

Contribute Dash to this address

Scan the QR code or copy the address below into your wallet to send some Dash

Scan to Donate Maker to 0xE595297c54804A8Ab9D28B6BEaE8883593F687aE

Contribute Maker to this address

Scan the QR code or copy the address below into your wallet to send some Maker

Scan to Donate Dai to 0x1BB5235FDC23985AFf3DcEfB32de3272BD477669

Contribute Dai to this address

Scan the QR code or copy the address below into your wallet to send some Dai

Scan to Donate Ethereum classic to 0x445F9E3F78c66A571179f06A478ee6f912c2E3d1

Contribute Ethereum classic to this address

Scan the QR code or copy the address below into your wallet to send some Ethereum classic

Scan to Donate Zcash to t1VzosYBYkWFt4s91GupLZmPQLKPtwk67zq

Contribute Zcash to this address

Scan the QR code or copy the address below into your wallet to send some Zcash


Leave A Comment

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Please make a monetary contribution toward raising awareness of important social and humans rights issues that don't show support for politicians via Crypto. We also accept PayPal and Checks by mail. 70% go toward these important projects. Click here to Donate.

The AEGIS Newsletter sends out during reasonable U.S. hours after 8 articles are published. May also include occasional updates about our YouTube Channel. Signup Form:


Signup for The AEGIS Alliance Newsletter!
The newsletter sends out once after eight new articles are published, during reasonable U.S. hours. Newsletters may also contain occasional updates about what's new on our YouTube.
Submit
You can unsubscribe at any time!
close-link