"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," according to a statement sent to QSRweb from
In fact,
Plaintiffs said that although
"The notion that
Ferraro said that although
The law firm also said that the plaintiffs' average annual sales fell more than
The suit alleges violations of federal law by
- Steering Black franchisees to inner city neighborhoods with low volume sales, high security and insurance costs and constant employee turnover.
- Retaliating against Black franchisees for rejecting strong-arm offers to continue operations in crime-ridden neighborhoods.
- Denying Black franchisees meaningful assistance during financial hardships while white franchisees were routinely given such support.
- Excluding Black franchisees from the same growth opportunities found at safer, higher-volume, lower-cost stores offered to whites.
- Failing to provide any legitimate business reasons for repeated denials of franchise opportunities over many years.
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Unfairly grading the operations of Black restaurants, which resulted in poor internal reviews, effectively pushing Black franchisees out of the
McDonald's system by denying them the eligibility for growth and favorable franchise terms. - Providing misleading projections which induced Black franchisees to purchase undesirable franchises.
"Each and every one of these businessmen and women tell a story of dashed hopes and lost dreams," Ferraro said in the release. "The world will soon see how these 52 people of color risked everything on the Golden Arches only to be kept down, marginalized and driven to ruin. Black lives matter on the streets, in our communities and they matter in Corporate America."
- Black franchisees — including the former franchisees that are part of this complaint — operate (or operated) restaurants in all types of communities, rural, urban and suburban.
McDonald's does not place franchisees into franchises (though it may make recommendations), franchisees select their locations.- Most sales are directly between franchisees.
- Sales and performance data is available for all franchisees before a franchise purchase.
McDonald's has sold high-performing company-owned restaurants to Black franchisees.McDonald's categorically denies that it evaluates Black franchisees differently than other franchisees or offers Black franchisees different financial terms than other franchisees.-
At
McDonald's has, in recent years, the total number of franchise organizations across all demographic groups has consolidated, but overall representation of Black operators is broadly unchanged. McDonald's has taken many steps to support the success of all franchisees, throughout the last 10 years there have been white, Hispanic, Asian and Black operators who have left the system due to business challenges.- Some plaintiffs were franchisees for more than 20 years, who retired successfully after profitable ownership.
-
Through
McDonald's relations with the NMBOA, it notes that cash flow at restaurants of Black operators has been improving. McDonald's is working on a case-by-case basis with all franchisees in markets that are underperforming.McDonald's supports all franchisees' financial health both through co-investing in major renovation projects.
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