McDonald’s has temporarily defeated a lawsuit brought by 52 Black former franchise owners. CNBC reports the plaintiffs claim the beloved fast-food giant set them up for failure with restaurants in crime-ridden, low-income neighborhoods.
The complainants, seeking up to $1 billion in damages, had until Oct. 21 to file an amendment for this case initially filed in 2020. However, a Chicago federal judge dismissed the case last week with no explanation.
Inside the Lawsuit
The lawsuit accuses McDonald’s of not supplying the same profitable locations in better neighborhoods and growth opportunities for Black franchises. It claims the company provided them with misleading information about finances and encouraged them to buy stores “quickly.” When it came time for remodeling, black franchises were given a short amount of time and no financial support. The suit also notes the food chain’s public commitment to diversity and the promotion of Black entrepreneurship.
McDonald’s provided a statement by a spokesperson denying any wrongdoing. It acknowledges that each store location is individually-owned and owners make their own decisions about growth and so forth.
They said, “Discrimination has no place at McDonald’s, and we remain steadfast in our dedication to taking action to attract and support franchisees who represent the diverse communities we serve.” The case was dismissed “because the plaintiffs had no facts to support their arguments.”
McDonald’s Diversity Promises
McDonald’s recently promised to recruit and train more diverse franchises around the world, offering $250 million to help target underrepresented groups in the U.S. But they have a pattern with settling suits with current and fe Blck franchise owners over the years. Herb Washington was once the company’s largest Black franchisees in the U.S. with 27 stores. The former Oakland A’s baseball player operated a total of 14 restaurants by February 2021, when he sued the company for systematic racial discrimination, and putting him in low-volume restaurants. He also alleges they graded his locations unfairly and then forced him to downsize by selling to white owners. Last December he received a settlement of $33.5 million in exchange for selling the company his final 13 locations and dropping his lawsuit.
That same month, brothers James and Darrell Byrd allege white owners, executives, and workers were given superior treatment compared to others, reports Bloomberg. The two Black owners of four locations in Tennessee agreed to leave the system after reaching a settlement of $6.5 million.