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        <title><![CDATA[McDonald’s accused of sending black franchisees on ‘financial suicide mission’]]></title>
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            <media:title type="html">McDonald’s accused of sending black franchisees on ‘financial suicide mission’</media:title>
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        <content:encoded><![CDATA[<p>Dozens of former McDonald&#8217;s franchisees say the fast-food giant steered them toward restaurants in poor, crime-ridden neighborhoods because they were black.</p><p>The 52 entrepreneurs made the allegations in a sweeping racial discrimination lawsuit accusing McDonald&#8217;s of sending them on a &#8220;financial suicide mission&#8221; and denying them the same opportunities it gave white franchisees.</p><p>&#8220;McDonald’s proclaims a commitment to racial equality, profits from its black customers, yet places black franchisees in locations that are destined to fail,&#8221; says the complaint filed Monday in a Chicago federal court.</p><p>Black franchisees often ended up with stores that had lower sales volumes and higher operating costs because they were in &#8220;tough and depressed areas&#8221; and required more security, insurance and renovations, the lawsuit says.</p><p>The result of McDonald&#8217;s discriminatory practices is a widening &#8220;cash flow gap&#8221; between its black franchisees and their white counterparts, who often got better locations and better terms, the complaint alleges. The plaintiffs say their average annual sales of $2 million were more than $700,000 below the national average between 2011 and 2016.</p><p>McDonald&#8217;s denied the allegations, saying the former franchisees who brought the lawsuit operated restaurants in a variety of places including urban, suburban and rural areas. While McDonald&#8217;s may recommend locations to franchisees, they ultimately choose the stores they want to purchase, the Chicago-based company said.</p><p>&#8220;These allegations fly in the face of everything we stand for as an organization and as a partner to communities and small business owners around the world,&#8221; McDonald&#8217;s said in a statement.</p><p>But the lawsuit alleges that McDonald&#8217;s led black franchisees to believe they could wait months or years to be offered another store if they turned down an undesirable one.</p><p>&#8220;McDonald’s made plaintiffs believe that these substandard locations were their only way in,&#8221; the complaint reads.</p><p>Those who refused to keep going in tough neighborhoods faced &#8220;targeted, rigorous, and unreasonable inspections&#8221; that white franchisees weren&#8217;t subjected to, according to the suit. McDonald&#8217;s denied that it evaluates black franchisees differently or offers them different financial terms than others.</p><p>The lawsuit pins the discriminatory policies on McDonald&#8217;s CEO Chris Kempczinski and his predecessor, Steve Easterbrook, whom the company is currently suing for <strong>allegedly covering up sexual relationships with underlings</strong>.</p><p>Kempczinski addressed the discrimination complaint in a <strong>video message</strong> to McDonald&#8217;s employees and suppliers, saying the company disagrees with the claims and intends to &#8220;strongly defend&#8221; itself against the suit.</p><p>&#8220;McDonald’s stands for diversity, equity and inclusion,&#8221; Kempczinski said. &#8220;I’m proud of the work we’ve done as a company to foster entrepreneurship, economic growth and mobility.&#8221;</p><p>McDonald&#8217;s shares were down about 1.6 percent in premarket trading at $210.11 as of 9:09 a.m.</p>]]></content:encoded>
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