McDonald’s Corphas has been sued by 52 former Black franchise owners who accuse the fast food giant of racial discrimination by guiding them to depressed, criminal neighborhoods and making them fail.
In a complaint seeking damages of up to $ 1 billion in damages, plaintiffs said McDonald’s failed to offer black franchisees profitable restaurant locations and growth opportunities on the same terms as white franchisees, reflecting its public commitment to diversity and black Reflected entrepreneurship.
The complaint said McDonald’s had saddled plaintiffs under its standard 20-year franchise deals with high security and insurance costs and with average annual sales from 2011-2016 that were $ 2 million below the national norm. There were often bankruptcies, they said.
“It is a systematic placement in inferior locations because they are black,” the plaintiffs’ attorney Jim Ferraro said in a telephone interview. “McDonald’s revenue is only determined by one thing: location.”
Plaintiffs are suing in federal court in Chicago five weeks after McDonald’s updated corporate values, pledging to focus more on diversity.
Chris Kempczinski, chief executive, told CNBC in June that diversity is “critically important” and needs to touch “every single aspect” of its business.
He also defended McDonald’s record, saying the Chicago-based company has “created more millionaires within the black community than likely any other company on the planet, but there is still a long way to go”.
Calling the claim “total rubbish,” Ferraro said the number of black franchisees had dropped from 377 to 186 since 1998.
More than 90% of McDonald’s 14,400 US restaurants were recently operated by approximately 1,600 franchisees.
The company updated its stats before suing ousted CEO Steve Easterbrook to get his valued $ 41.8 million severance package back for allegedly hiding inappropriate sexual relations with three employees.
Easterbrook said the lawsuit was “unfounded”.
(Except for the headline, this story was not edited by GossipMantri staff and published from a syndicated feed.)