Updated 1/2/2022
On Tuesday, September 1st a lawsuit 52 Black former franchise owners are suing McDonald’s claiming systematic and covert racial discrimination. The plaintiffs are seeking more than $1 billion in compensation which averages to $5 million per store, with approximately 200 stores. According to plaintiffs, McDonald’s required Black franchise owners to make changes that white franchise owners did not have to do.
On Roland Martin Unfiltered Van Jakes goes into details about the problems he faced while owning his location. Jakes openly admits he didn’t realize the comparison in challenges until he left the system. Some of the requirements meant remodeling or rebuilding their store within a short period of time which reduces profit margin and increases debt. In addition, Black franchisees were not able to invest in more profitable stores in better neighborhoods.
Jake’s stated they pursued arbitration, but were unable to come to an agreement.
McDonald’s denies any racial discrimination among Black franchise owners. In a statement, they mention that 45% of its corporate officers and all of its field vice presidents are people of color.
Line 25 Consulting Synopsis
Unfortunately, this is another example of systematic racism. The prime example here is the comparison of White and Black franchise owners and the constant movement of the goal post. Jake’s said it best mentioning the owners running two different races.
Second, Black folks and other minority groups are taught to keep their head down, mind their business, and do the work. Jakes did that, but he wasn’t fully aware of how his white peers were handling business until he left the franchise. I think it is important to seek counsel from all types of people to make sure the opportunities presented to you are sound. This further deepens the point about the wage gap among all groups as one of the big issues America struggles with.
Updates:
McDonald’s has agreed to pay $33.5 million to a Black franchisee who filed a racial discrimination lawsuit against the QSR franchise.
Herb Washington, a former baseball player and owner of more than a dozen McDonald’s locations in Pennsylvania, filed a lawsuit in February that claimed the company favored white owners and denied him the opportunity to buy restaurants in more affluent communities.
Washington agreed to drop the lawsuit and exit his franchise agreement as part of the settlement. McDonald’s said in a statement that the amount it was paying Washington for 13 franchises was “no more than what we deem a fair price for the value of the restaurants.”
Byron Allen also filed a lawsuit for $10 billion in damages based on racial discrimination.