McDonald's Seeks Dismissal of Discrimination Lawsuit Filed by Black Former Franchisees
By Heather Haddon
McDonald's Corp. on Friday asked a federal judge to dismiss a
lawsuit accusing it of selling Black owners subpar stores and
failing to support their businesses, saying that it wasn't in the
company's interest to have its franchisees fail.
In the company's first response to the lawsuit filed in late
August, McDonald's said the ex-franchisees' discrimination
allegations against the company were vague and pointed to no
specific facts or promises broken.
McDonald's said in its court filing Friday that it provides
extensive resources to its franchisees to succeed in their
businesses, but it's up to owners to run their businesses well and
contracts drawn up with operators outline the risk in running one
of its restaurants.
"Success is promised to no one, and plaintiffs' struggles --
while regrettable -- are simply not a basis for a claim against
McDonald's," the company said in the filing.
McDonald's has had to defend its company record on race this
year. After a legacy of supporting Black executives and
franchisees, the company faces two discrimination lawsuits. The
company has denied the allegations in both suits.
The company says it has begun to assess diversity across its
ranks, and that in recent months it held discussions with the
National Black McDonald's Operators Association about how to
improve member cash flow. Black owners have said their sales are
lower than those at the average U.S. McDonald's.
The lawsuit filed Aug. 31 in the U.S. District Court for the
Northern District of Illinois accused McDonald's of steering Black
franchisees to restaurants in undesirable locations in inner cities
for years. It argued that those restaurants were destined to fail,
and often had lower sales and higher operating costs.
The suit alleged that the number of Black owners in the U.S. has
fallen because of what it described as the company's racial
discriminatory practices. It seeks damages for former owners of $4
million to $5 million per store for the more than 200 locations
they once operated.
In its response, McDonald's said it was implausible that it had
a "secret strategy" to undermine Black owners, as it profits off
its franchisees' gains. The company added that many franchisees
left their stores so long ago that their claims don't fall within
the statute of limitations.
McDonald's said in a statement Friday that it takes the claims
in the suit seriously, and it will defend itself as it seeks to
create equal opportunities for all of those who work with the
McDonald's legal defense includes former U.S. Attorney General
Loretta Lynch, a Democrat who served during the Obama
administration. "The facts will show that discrimination did not
inhibit the plaintiffs' success as franchisees," Ms. Lynch said in
Attorneys for the Black ex-owners have said they are confident
in the strength of their lawsuit, and that it draws on the
experiences of 52 former franchisees from 18 states. They say that
many of those owners lost their businesses in the past four
Write to Heather Haddon at firstname.lastname@example.org
(END) Dow Jones Newswires
October 23, 2020 14:18 ET (18:18 GMT)
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