McDonald’s Pledges $250m to New Franchise Owners to Help Increase Diversity

McDonald’s said Wednesday it is launching an initiative to recruit new franchise owners from underrepresented communities and will offer millions in financing to help those who struggle to get funding.

The fast-food giant says it will dedicate $250 million over five years to help potential franchisees in the U.S. who have difficulty getting funding from other sources to buy a McDonald’s restaurant.

McDonald’s, which has been accused of racial discrimination by dozens of Black former and current franchise owners in the last two years, says the global initiative is part of a broader effort to make its leadership and supplier network more inclusive and to ensure its franchisees reflect the communities in which they operate.

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In September 2020, 52 Black former McDonald’s franchisees sued the fast-food giant, alleging they faced racial discrimination that included being steered to restaurants with lower profit potential and being denied the same financial support as their white peers.

And last fall, three current and former McDonald’s employees filed a civil rights complaint accusing managers at a local McDonald’s of using racially derogatory terms and giving fewer hours and more extreme discipline to Black employees than it did to their white co-workers.

According to a separate discrimination complaint filed in February by Herbert Washington, another Black franchisee, the number of Black McDonald’s owners dropped from 377 in 1998 to 186 this year. McDonald’s responded that the share of restaurants with Black owners was “broadly unchanged” during that time period.

Currently, the company says that 29.6% of franchise owners in the U.S. identify as Asian, Black or Hispanic, while roughly 30% are women.

ln February, the company said it was setting goals to boost the number of women in its senior leadership worldwide from 37% to 45% in four years, and to achieve gender parity by the end of 2030. It is aiming to increase the number of top leaders from historically underrepresented groups from 29% to 35% by the end of 2025.

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