McDonald's accused of racism: black franchise owners go broke more often - ForumDaily
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McDonald's accused of racism: black franchise owners are more likely to go broke

Black entrepreneurs have filed a class action lawsuit against McDonald's, accusing it of racial discrimination. The publication told more about this case. CBS News.

Photo: Shutterstock

One of the lawsuits was filed in Illinois on behalf of plaintiffs, including brothers James and Darrell Byrd, who allege that the fast food chain did not provide them with the same support and opportunities that white franchisees receive.

A franchisee is a company or entrepreneur who purchases the right to market on behalf of the franchise.

The brothers are represented by the same law firm, The Ferraro Law Firm, which currently represents over 50 black entrepreneurs who partnered with McDonald's in a similar lawsuit against McDonald's filed in August. There are currently 186 franchisees in the United States owned and operated by blacks.

James Beard was forced to sell eight of its 8 locations due to poor performance, and Durrell's four locations were reduced to two, the lawsuit says. These former franchisees "are not bad businessmen as McDonald's has described them," their lawyers argue in the complaint.

Rather, “they are victims of McDonald's targeted discrimination against black franchisees, which McDonald's concealed for years,” the lawsuit states.

The plaintiffs are seeking up to $5 million per store in damages — the same amount as in the August lawsuit — alleging they were sent to disadvantaged areas on a “financial suicide mission.”

McDonald's takes the allegations seriously and has a stake in making sure all locations are profitable, the giant said in a statement. The company also said it helped the Byrd brothers even when their businesses were in dire straits.

On the subject: 14 years and $ 50 million: how the first McDonald's was opened in the Soviet Union

“McDonald's made significant investments in each of the businesses after they experienced difficulties caused by the mismanagement of the organizations,” McDonald's said regarding the Bird brothers' situation. “We will defend ourselves against this lawsuit while also advancing our priorities of creating equal opportunity for franchisees, suppliers and employees.”

According to the lawsuit, McDonald's sent black franchisees to downtown areas with low sales and high security and insurance costs. The complaint says that after black franchisees received a store, they were required to immediately rebuild it and buy new equipment at their own expense, while white franchisees did not have such a requirement.

In response to a lawsuit filed by 52 former franchisees in August, McDonald's said it firmly denied the allegations.

"We are confident that the facts will show how committed we are to diversity and equal opportunity across the McDonald's system, including our franchisees, suppliers and employees," the statement said.

The McDonald's team of lawyers filed a motion to dismiss the case, calling the plaintiffs' argument "self-serving" and "illogical."

Complex story

McDonald's has a difficult history with black entrepreneurs. In 1969, activists boycotted four McDonald's in Cleveland until the company sold them to black owners. In 1983, a black entrepreneur from Los Angeles sued the company for discrimination. As a result, McDonald's paid him $ 4,5 million.

On the subject: What is the difference between McDonald's restaurants in the USA and Russia: traveler's impressions

In 1996, McDonald's management acknowledged that black franchisees did not match their white counterparts.

In January, two entrepreneurs sued the company, alleging that it removed ads for black customers, and rated black-owned stores more harshly than white-owned stores and implemented business plans that discriminated against black franchisees.

McDonald's disputed the allegations, noting that 45% of its corporate executives and all of its field vice presidents are multiracial.

Read also on ForumDaily:

What is the difference between McDonald's restaurants in the USA and Russia: traveler's impressions

'Don't joke with it': what mistake our immigrants make in American cafes

14 years and $ 50 million: how the first McDonald's was opened in the Soviet Union

Miscellanea In the U.S. McDonald's racial discrimination
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