McDonald’s is under fire again over how it treats its black franchisees.A civil rights class-action lawsuit filed Thursday accused McDonald’s of steering black franchisees into predominately
McDonald’s is under fire again over how it treats its black franchisees.
A civil rights class-action lawsuit filed Thursday accused McDonald’s of steering black franchisees into predominately black, inner-city or rural communities where they make less money than their white counterparts and have higher operating costs that include beefed up security.
The complaint, filed in a Chicago federal court on Thursday evening, on the heels of a Sept. 1 suit by 52 black former franchisees who claim they made at least $700,000 less in annual revenues than the McDonald’s national average between 2011 and 2016, according to the complaint.
The suit was filed by two brothers — James and Darrell Byrd — who have operated McDonald’s restaurants in the Nashville area for 31 and 22 years respectively.
James’ company has dwindled from 10 eateries to two underperforming restaurants while his brother had operated as many as four and now has just two as well, the suit says.
In a written response, McDonald’s USA blamed the plaintiffs’ woes on their own “mismanagement,” claiming that the company had “invested significantly” in their businesses.
“For years, McDonald’s has invested in Jim and Darrell Byrd’s franchises, providing significant financial support to address their rent defaults, failure to pay suppliers and delinquent tax bills,” The company said.
“We have made multiple, good faith offers to purchase their remaining restaurants in an effort to address their continuing business difficulties, but the Byrds have instead chosen to pursue claims in litigation,” McDonald’s added.
The class action is seeking as much $5 million per store in damages, lost profits and relief, according to the complaint, to ensure that such discriminatory actions don’t happen again.
“We have two who are willing to put their necks and livelihoods on the line, but we have dozens of owners coming to us,” said the plaintiffs’ lawyer, James Ferraro, during a press briefing.
Some 50 out of 186 current black franchisees have had conversations with the law firm, according to Ferraro.
Since the Sept. 1 complaint, McDonald’s has been on a “massive public relations campaign” according to Ferraro, offering black franchisees “various enticements” including rent relief, in exchange for promising not to sue McDonald’s.
Franchisees will have until next year to decide whether they want to be part of the class-action lawsuit.
“We are under no illusion about what McDonald’s will do,” Ferraro said in a statement. “They will open the checkbook to the remaining black operators and demand they not join the class. They’ll put the screws to them and force some of them to go public saying ‘all is well.’”