Fifty-two former McDonald’s franchisees are suing the iconic fast-food company for racial discrimination, alleging that the corporation denied them opportunities given to white operators that ultimately forced them to abandon their franchises, CNBC reports.
The Black plaintiffs, who operated more than 200 McDonald’s restaurants, gave up their franchises between 2010 and 2020. The lawsuit alleged that the company directed these franchisees to operate restaurants in low-income areas, where annual revenues for sites averaged 35% less than the national average.
Those locations also had higher security, insurance and personnel costs, records show, meaning a franchise would gross $700,000 less annual than an average franchise, which took in $2 million.
The lawsuit, filed in federal court in Illinois, where McDonald’s is headquartered, allege that the lowering operating revenue and higher costs meant these franchisees lost $4-5 million on each of their franchise agreements.
In the lawsuit, the franchisees state that McDonald’s gave the franchisees false projections on what locations would generate and would then retaliate against the operators for trying to get out of unprofitable locations.