 – A fast food giant has filed a lawsuit against 52 former franchise owners alleging racism against McDonald’s Corporation. Depression led them to crime-ridden neighborhoods and prepared them for failure.</p>
<p>In a lawsuit seeking $ 1 billion in damages, plaintiffs argued that McDonald’s did not provide the white franchise with lucrative restaurant space and growth opportunities equal to the white franchise, citing public commitment to diversity and black entrepreneurship.</p>
<p>The complaint alleges that McDonald’s, with stores that require high security and insurance costs, lined up plaintiffs under its 20 – year standard franchise agreements, with average annual sales of less than $ 700,000 nationwide, from 2011 to 2016. Bankruptcy is often the cause, they said.</p>
<p>“This is an orderly position in non-standard places because they are black,” plaintiff’s lawyer Jim Ferraro said in a phone interview. “McDonald’s income is governed by only one thing: position.”</p>
<p>Five weeks after McDonald’s updated corporate values, plaintiffs filed a lawsuit in federal court in Chicago, focusing more on diversity.</p>
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Chief executive Chris Kempsinski told CNBC in June that diversity was critically important and needed to touch every aspect of its business.
He justified McDonald’s record that the Chicago-based company “created more billionaires than any other corporation within the black community, but there is still work to be done.”
Ferraro called the claim a “total hogwash” as the number of black franchises has dropped from 377 to 186 since 1998.
More than 90 percent of McDonald’s 14,400 U.S. restaurants recently operated 1,600 franchises.
The company updated its values before filing a lawsuit against sacked chief executive Steve Easterbrook.
Easterbrook said the case was unfit.
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