The Golden Arches have become tarnished from decades of racial discrimination, according to more than 50 former Black franchisee owners who claim McDonald’s restaurants gave preferred treatment to their White counterparts. The 52 plaintiffs filed a federal lawsuit against the fast-food giant in August, each seeking up to $5 million in damages per store for the more than 200 locations they operated.
The former franchisee owners attribute their lost revenue and debt to McDonald’s for providing them with poorer locations, sticking them with higher rent and operating costs, and misleading them about their restaurants’ profitability – issues not encountered by White franchisee owners.
Locations in high-crime, economically depressed areas
This case marks at least the third such racial discrimination lawsuit filed against McDonald’s this year. In January, two Black executives at the company claimed they were passed over for promotions and later demoted in their case. Then in July, three Black employees at a Florida McDonald’s filed a federal lawsuit, claiming the restaurant subscribed to a racist and toxic work environment.
In the most recent case, the franchisees’ lawsuit was filed in the U.S. District Court in Chicago. The plaintiffs operated McDonald’s restaurants in 19 states, including Texas, Florida, New York, Pennsylvania, Illinois and Georgia. Some of their restaurants date back to 1981, but all of them left McDonald’s in the past 10 years.
While the fast-food giant cites its long-time commitment to equal opportunity and diversity, the former franchisees say McDonald’s has subscribed to the opposite philosophy. In doing so, McDonald’s set them up for failure by deliberately placing their restaurants in high-crime and economically depressed areas with higher operating costs, lower sales and high employee turnover.
Black franchisee numbers plummet
According to the lawsuit, McDonald’s also provided the franchisees with poor reviews in an effort to drive them out of the company’s system. While the fast-food giant continues to deny the allegations, it seems that McDonald’s actions contributed to the significant drop in the number of Black franchisee operators over the past two decades. Today, McDonald’s Black franchisee operators stand at 186, shrinking by more than half from the 400 owners in 1998.