Black McDonald's Franchise Owner Files Lawsuit Accusing Company of Discrimination

Illustration for article titled Black McDonald's Franchise Owner Files Lawsuit Accusing Company of Discrimination
Photo: Stephen Maturen (Getty Images)

According to Herbert Washington, a former Oakland Athletics player and current owner of 14 McDonald’s franchises, the fast-food company known for its golden arches is limiting the ability of Black owners like himself to profitably operate their restaurants.

Washington made the allegation in a civil rights lawsuit he filed against the food service juggernaut on Tuesday, AP reports.

From AP:

Franchises in low-income neighborhoods cost more to operate, have higher employee turnover and are not as profitable, the lawsuit said.

“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.”

More than 50 former Black McDonald’s franchise owners made similar claims to Washington’s in a lawsuit filed against the company in September, saying they were forced to sell around 200 stores in the last decade.

Advertisement

Though Washington says the company’s treatment of Black franchise owners has resulted in a significant $700,000 sales gap between white-owned franchises and Black-owned ones, McDonald’s has challenged his claims. In a statement issued on Tuesday, the company responded to the financial disparities Washington has pointed out by essentially blaming him for being a bad businessman.

“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,” McDonald’s said.

Washington previously owned 27 McDonald’s stores, but also alleges that the company made him sell seven of his franchises to white owners over the years.

According to his lawsuit, the number of McDonald’s franchises owned by Black franchisees has diminished over the past couple decades from 377 to 186. In its statement, the company said the percentage of Black-owned stores is “broadly unchanged.”

Writer, speaker, finesser, and a fly dresser. Jamaican-American currently chilling in Chicago.

Share This Story

Get our `newsletter`

DISCUSSION

Some of you don’t seem to understand how McDonald’s works. It is more a real estate company than a food service company. About 85% of McDonalds is made up of franchisee-run locations. However, the franchisees don’t own that land or those physical restaurants. For the most part, McDonalds owns that land and those physical restaurants and leases them to the franchisees. That’s also why 85% of McDonalds locations are franchisee-run locations - because McDonalds gets to keep over 80% of the revenue generated by those leased locations compared to just 16% when McDonalds runs its own location and has to cover overhead.

As a result of this real estate system, you apply to be a franchisee, but you don’t get to say “here’s my property in this location I want to run a McDonalds here.” For the most part, McDonalds decides which locations it will offer to lease to you. If McDonalds is deciding to disproportionately relegate black franchisees to low income generating locations and disproportionately awarding high income generating locations to white franchisees, that can be grounds for a suit for damages.