Former McDonald’s franchisees file racial discrimination lawsuit

More than 50 Black former McDonald’s franchise owners are suing the burger chain, saying the company steered them to less-profitable restaurants and didn’t 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 McDonald’s is based.

According to the lawsuit, McDonald’s 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.

As a result, the plaintiffs averaged sales of $2 million per year. By comparison, McDonald’s average U.S. store brought in $2.7 million annually between 2011 and 2016 and $2.9 million in 2019, the lawsuit says.

“Revenue is determined by one thing and one thing only: location,” said James Ferraro, the Miami-based attorney representing the plaintiffs. “It’s a Big Mac. They’re the same everywhere.”

McDonald’s Corp. denied the allegations and defended its history with Black franchisees.