Black former franchisees sue McDonald's for discrimination
Source: AP
By DEE-ANN DURBIN
More than 50 Black former McDonalds franchise owners are suing the burger chain, saying the company steered them to less-profitable restaurants and didnt give them the same support and opportunities given white franchisees.
The 52 plaintiffs, who owned around 200 U.S. stores before being forced to sell them over the last decade, are seeking compensation of $4 million to $5 million per store, according to the lawsuit. The suit was filed Tuesday in federal court in Chicago, where McDonalds is based.
According to the lawsuit, McDonalds steered Black franchisees to stores in inner-city neighborhoods with lower sales volumes and higher security and insurance costs. The company would provide them with misleading financial information or push them to decide quickly when a store became available, the lawsuit says.
Once Black franchisees owned a store, they would be asked to rebuild or remodel within a shorter period of time than white franchisees without the rent relief and other financial support given to white franchisees, the lawsuit says. Black franchise owners were also denied the chance to buy more profitable stores in better neighborhoods, it says.
FILE - This June 25, 2019 file photo shows a McDonald's sign outside the restaurant in Pittsburgh. More than 50 Black former McDonalds franchise owners are suing the burger chain for discrimination. In a federal lawsuit filed Tuesday, Sept. 1 in Chicago, the 52 plaintiffs say McDonald's steered them to less-profitable restaurants and didnt give them the same support and opportunities given white franchisees. AP Photo/Gene J. Puskar, File)
Read more: https://apnews.com/b17e8bd40fcebf05af98a40a5ad91e9f
Sherman A1
(38,958 posts)Hope that the get a good settlement.
no_hypocrisy
(45,772 posts)My law firm had a bad experience with Mickey Dees (white franchisees).
On paper, they had a lucrative restaurant in Wildwood, NJ near the beach during the summer. But McDonalds forced them in bankruptcy and losing their franchise because it lost money. Not because they ran the store badly. Not because of "location, location, location." Our firm was able to prove that for eight weeks of summer, that the area suffered very bad weather (rained most of the time), the town decided to do road construction in front of their store, and on top of that, Burger King was having its $1.00 Whopper promotion. (McDonalds retaliated with its own $1.00 Big Mac and lost money with every sale.)
McDonalds doesn't support its franchisees and is content with punishing those that consistently turn a profit.
robbob
(3,514 posts)Bad weather, unexpected town construction and a rival franchise deciding to give burgers away? Sounds like bad luck. What was the basis of your lawsuit against McDs?
no_hypocrisy
(45,772 posts)for being unprofitable through poor management.
robbob
(3,514 posts)I assumed the franchise owner took on all burdens of profitability.
no_hypocrisy
(45,772 posts)Our clients fell below that number for that summer and some months thereafter when the vacationers went home. And McDonalds revoked their franchise. And they went bankrupt from all the money they invested in the restaurants.
bucolic_frolic
(42,672 posts)The company may have thought this a financial decision, but surely should have realized its implications. Sounds like the lawsuit has the statistics behind the methods they are alleging.
IronLionZion
(45,258 posts)Law firms are reluctant to pursue a case like this without it. They must have enough to believe they can win.