US McDonald's Faces Class Action Lawsuit for 'Racial Discrimination' by Former Black Franchisee

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Former Black franchisees of McDonald's in the United States have filed a class-action lawsuit, alleging that the company engaged in systematic discrimination during operations by requiring Black franchisees to open stores in areas with lower sales and higher operating costs.

On the 1st (local time), the Wall Street Journal (WSJ) reported that 52 Black business owners who operated about 200 McDonald's franchises filed a complaint in the Northern District of Illinois federal court. They claimed that McDonald's treated Black franchisees unfairly by assigning them stores below a certain standard and failing to provide adequate support.

In particular, the 52 former franchisees argued that due to McDonald's discriminatory practices, they ceased operating their franchises over the past four years. They pointed out that the average annual sales from 2011 to 2016 were $700,000 lower than the average for all McDonald's franchises in the U.S., and that the number of Black franchisees decreased from 377 in 1998 to 186 this year.

They stated, "McDonald's deliberately and covertly deprived Black franchisees of the rights equally enjoyed by white franchisees." They are seeking damages of $4 million to $5 million (approximately 4.7 billion to 5.9 billion KRW) per franchise.

In response, McDonald's issued a statement saying, "McDonald's places great value on diversity and equal opportunity for franchisees, suppliers, and employees." They also claimed that the number of Black franchisees among the approximately 2,000 U.S. franchisees has not changed significantly, and that most of the plaintiffs joined the lawsuit after earning profits from their franchises and retiring.

WSJ reported that this lawsuit comes at a sensitive time for McDonald's. In January, McDonald's was sued by two Black executives over racial discrimination. At that time, McDonald's denied the allegations and later announced plans to increase racial diversity amid ongoing anti-racism protests in the U.S.

This content was produced with the assistance of AI translation services.