The $1 billion lawsuit, which was filed Monday night (Aug. 31), says the popular fast food restaurant chain systematically discriminated against the Black franchise owners by “offering better financial support and more favorable locations to their White counterparts.”
The former franchisee owners also stated that McDonald’s gave them less time than their white counterparts to rebuild or renovate their restaurants and offered them less support financially. The lawsuit says that the number of Black franchise owners have declined from almost 400 in 1998 to less than 200 today.
The complaint also accuses McDonald’s of “systematically” steering the Black franchise owners towards stores in locations that needed more security and profited less than others.
McDonald’s released a statement in response to the lawsuit on Tuesday (Sep. 1). “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,” the statements reads.
“Not only do we categorically deny the allegations that these franchisees were unable to succeed because of any form of discrimination by McDonald’s, we are confident that the facts will show how committed we are to the diversity and equal opportunity of the McDonald’s System, including across our franchisees, suppliers and employees,” the statement continued.
On Tuesday morning, McDonald’s CEO Chris Kempczinski sent a video out to all of the company’s employees, franchisees and suppliers addressing the suit.
“We disagree with the claims in this lawsuit and we intend to strongly defend against it,” he said, also noting that the company could do better at being more diverse within its franchising. “Our franchisee ranks should and must more closely reflect the increasingly diverse composition of this country. We are committed to being better allies, better sponsors and better leaders.”