Posted on October 30, 2020

McDonald’s Fires Back Against Black Ex-Franchisees’ $1 Billion Racial-Discrimination Suit

Kate Taylor, Business Insider, October 23, 2020

McDonald’s shot back against a racial-discrimination lawsuit filed by Black former franchisees.

The fast-food giant filed a motion to dismiss the suit in the US District Court for the Northern District of Illinois Eastern Division, on Friday. The filing comes nearly two months after fifty-two Black ex-franchisees sued the company, claiming they were forced to close or sell more than 200 McDonald’s locations because of “systematic and covert racial discrimination.”

“The essence of Plaintiffs’ Complaint is that McDonald’s—whose entire business model depends on a wide network of successful franchisees—had a secret strategy spanning decades to undermine Black owner-operators across the country,” reads the filing by McDonald’s legal counsel, led by former US attorney general Loretta Lynch.

“Plaintiffs offer nothing in support of this extraordinary theory beyond vague and conclusory assertions, self-serving speculation on “information and belief,” and a handful of personal anecdotes,” the filing continues.

McDonald’s motion to dismiss argues that ex-franchisees’ complaint — which it calls “illogical” — falls short in a number of ways.

Attorneys argue franchisees fail to plausibly allege McDonald’s intentionally discriminated against Black franchisees or that the company committed fraud by hiding information it had a duty to disclose. {snip}


According to the complaint, there are currently only 186 Black McDonald’s franchisees, down from 377 in 1998. While McDonald’s overall franchisee count has also dropped, Black franchisees say they have been disproportionately impacted. {snip}

Former franchisees said in the complaint that McDonald’s “covertly” restricts Black franchisees to locations with higher costs and lower sales. Black franchisees are primarily offered opportunities to own older stores in Black neighborhoods, according to the complaint.