A lawsuit accusing McDonald’s of discrimination brought forth by Black former franchisees now has nearly 80 plaintiffs attached to it.
In August, a little more than 50 Black operators filed the complaint, stating the fast-food chain pushed them toward impoverished areas and didn’t provide the same opportunities given to their white peers. An amended complaint added more than 25 franchisees who experienced similar issues.
Beforehand, more than 200 stores were involved. That number has grown to nearly 300. The lawsuit is seeking damages as high as $1.5 billion, or roughly $4 million to $5 million per store.
The lawsuit said average annual sales were about $2 million, which is more than $700,000 lower than the chain’s national average of $2.7 million between 2011 and 2016 and even smaller than the $2.9 million average in 2019. The filing also claimed the number of Black franchisees has decreased from 377 in 1998 to 186 in 2020.
The filing called McDonald’s alleged actions “systematic and covert racial discrimination” and described stores as “financial suicide.”
McDonald’s has categorically denied the accusations and has sought to dismiss the lawsuit. The chain said while it recommends locations, the operator chooses the area. McDonald’s said there’s been a decrease in franchise ownership across all demographic groups, and the representation of Black operators has remained the same proportion.
The fast-food brand also noted that the claims don’t fall within the statute of limitations. However, McDonald’s said that even if they did, none of the allegations are viable.
“Success is promised to no one, and Plaintiffs’ struggles—while regrettable—are simply not a basis for a claim against McDonald’s,” the company said in its response.
The lawsuit isn’t the only legal challenge McDonalds has faced this year in terms of discrimination. In October, a lawsuit—filed by the same law firm—was brought forth by two current operators, James and Darrell Byrd, on the behalf of 186 other Black franchisees who expressed similar allegations. McDonald’s responded by saying it made offers to buy the duo’s restaurants before the lawsuit and that the operators “ran into business difficulties caused by mismanagement of their organizations.”
Additionally, at the beginning of the year, two McDonald’s executives from Dallas filed a lawsuit, accusing the brand of racism that dates back to when former CEO Steve Easterbook took over leadership. The complaint accused McDonald’s of consistently not promoting Black leaders within the company. However, McDonalds at the time said the company has decreased the number of officer level positions over the last five years. The brand added that any decrease in representation of Black officers is broadly proportional to the decrease of all officers over the last several years.
McDonald’s has spent the past year working to improve its culture after the firing of Easterbrook in November 2019. According to the Wall Street Journal, the brand is assessing diversity companywide and returned funding to its African-American employee council. And recently, the chain hired two Black employees to prominent positions within the company. Former General Mills executive Tiffanie Boyd was hired as the U.S. chief people officer while Reggie J. Miller was brought on as vice president and global diversity, equity, and inclusion officer.
