CBx Daily

McDonald’s Black Franchisees Not Lovin’ It So Much

Mar 3

By Gary J. Nix

  • The number of Black former McDonald’s franchisees suing the restaurant giant now stands at 77, representing 300 restaurants
  • Compensatory damages in that discriminatory lawsuit could reach close to $1.5B

Once again, McDonald’s (MCD -1.02%) has found itself in hot water, as proven by a new lawsuit alleging it pushed one of its Black franchisees out of numerous locations with corporate practices that amounted to racial discrimination. Former Oakland A’s player, Herb Washington, who once owned 27 locations and now owns only 14, claims that he was pressured by the fast-food giant to sell several of his stores, including seven over the past three years, to white franchisees.

Why This Matters: According to McDonald’s, lawsuits like this, on their face, “illogical as [they] suggest the company somehow has an interest in undermining its franchisees and seeing them fail.” Yet and still, Washington is not the only entity suing the company for discrimination. Franchisees James and Darrell Byrd have filed a suit against the restaurant chain, and 77 Black former franchisees who represent 300 restaurants have filed a case as well. Compensatory damages in that discriminatory lawsuit could reach close to $1.5 billion.

Former Oakland A’s player, Herb Washington, who once owned 27 locations and now owns only 14

The further the idea of mistreatment of franchisees who represent members of a market with whom they are obviously looking to connect with goes, the harder it will be to make meaningful inroads and partnerships with those that can help. Public relations aside, three lawsuits with at least 80 plaintiffs do not breed trust in a brand no matter what they say.

Situational Awareness: McDonald’s recent outfacing communications have leaned significantly into the conversations surrounding diversity. They’ve hired a new diversity chief and programs with the likes of Travis Scott, and even Bad Bunny, are designed to attract more Black and Brown customers. However, Washington’s claims appear to dispel their promises to bolster equity among franchisees, at its corporate offices, and among suppliers due to higher costs and lower volume at the stores to which he and other Black franchisees are being pigeonholed.

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