52 former franchisees sue McDonald’s for racial discrimination

More than 50 former McDonald’s franchisees are suing the fast-food giant for racial discrimination, alleging it denied them the same opportunities as White operators and pushed them out of the system.

The 52 Black plaintiffs claim that McDonald’s violated federal anti-discrimination law and breached their contracts. They operated over 200 restaurants and exited the franchise between 2010 and 2020. The suit was filed Tuesday in a federal court in Illinois, where the company is headquartered.

According to the complaint, McDonald’s steered Black franchisees toward restaurants in low-income neighborhoods, which typically have higher security and insurance costs and lower volume sales. The lawsuit said the plaintiffs’ average annual revenue was $2 million, at least $700,000 less than McDonald’s national average for its franchisees between 2011 and 2016. Last year, the national average sales for its franchisees climbed to $2.9 million.

After subtracting restaurants’ costs from missed revenue over the years active, the plaintiffs say their losses are $4 million to $5 million per location on average.

“Revenue, at McDonald’s, is based on one factor and one factor only: location,” plaintiffs’ attorney James Ferraro said in an interview. “It has nothing to do with the taste of a Big Mac. You don’t go to a different McDonald’s because the Big Macs are better. You go to the closest McDonald’s, period.”