McDonald’s Corporation is paying a hefty Mcprice to settle a recent lawsuit. The fast food giant has agreed to shell out $33.5 million to Herb Washington, a Black franchisee who once owned 27 McDonald’s restaurants, according to Cleveland.com.
The outlet reports that McDonalds Corp. has asked Washington to leave his 13 McDonald’s businesses behind and drop his racial discrimination lawsuit. Within a statement, the fast food restaurant stated that “discrimination has no place at McDonalds” and the $33.5 million was “a fair price for the value of the restaurants.”
“While we were confident in the strength of our case, this resolution aligns with McDonald’s values and enables us to continue focusing on our commitments to the communities that we serve,” McDonald’s Corp. said.
Washington, a former Major League Baseball player for the Oakland A’s, initially filed his lawsuit in the U.S. District Court in Youngstown, Ohio in February. At the time, he alleged that the fast food burger chain was treating white owners more favorably and denying him and other Black franchisees the opportunity to buy restaurants in affluent areas.
Washington’s lawsuit stated discriminatory practices led to a $700,000 sales gap between Black-owned franchises and McDonald’s restaurants owned by white people. He cited high employee turnover and high operation costs in low-income neighborhoods as two of the reasons why the difference in sales is so significant.
“By relegating Black owners to the oldest stores in the toughest neighborhoods, McDonald’s ensured that Black franchisees would never achieve the levels of success that White franchisees could expect,” the lawsuit said. “Black franchisees must spend more to operate their stores while white franchisees get to realize the full benefit of their labors.”
McDonalds would push back by pointing the blame at Washington for his own misfortunes. “This situation is the result of years of mismanagement by Mr. Washington, whose organization has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment,” the corporation said in a February statement.
In addition to having to deal with Washington’s claims — in September 2020, REVOLT reported that over 50 former Black McDonald’s franchise owners — who were forced to sell close to 200 stores — made similar claims to Washington’s in their own lawsuit filed against McDonald’s.
Washington’s settlement arrives nearly one week after McDonald’s said it plans to launch an initiative to recruit new franchise owners from underrepresented communities, and will devote $250 million over five years to help them buy a McDonald’s restaurant.
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.