The lawsuit, filed late Monday night, accused McDonald’s of systematically discriminating against black franchise operators by offering their white counterparts better financial assistance and more convenient locations. The former franchisees, who run about 200 restaurants together, have operated stores during the year since the 1980s.
According to the complaint, McDonald’s “systematically” driven plaintiffs to places and stores in need of more security More sales than others, and misleading them about how profitable restaurants can be.
“These allegations confront everything we stand as an organization and as partners of communities and small business owners around the world,” McDonald’s said in a statement in response to the lawsuit. On tuesday. “We have not only explicitly denied allegations that the franchise was unable to succeed due to any discrimination by McDonald’s, we are confident that the facts will show how committed we are to diversifying the McDonald’s system and equal opportunity.” The statement continued.
CEO Chris Kempinski made the claim in a video sent to McDonald’s U.S. employees, suppliers and franchisees on Tuesday morning.
“We disagree with the lawsuits and we strongly intend to defend against them,” he said, noting that the company could continue to diversify its franchise operations. “Our franchise ranks should and must reflect more closely on the growing diversity of this country,” he said. “We are committed to being better collaborators, better sponsors and better leaders.”
McDonald’s said that while it could recommend locations, the franchise itself Finally decided where to buy. The franchisees have access to information about each location, the company added, adding that the black franchises operate in a variety of communities.
The lawsuit also alleges that McDonald’s asked black franchise operators to renovate or renovate their rest restaurant rent in a shorter window than their white counterparts and offered them less financial assistance. Citing data from McDonald’s and the National Black McDonald’s Operators Association, he said the number of black franchise operators has dropped from around 400 in 1998 to less than 200 today.
McDonald’s said it decides how to provide financial relief on a case-by-case basis and does not provide its financial franchise operators with various financial terms. He also says that, over the years, franchises of all races have gone out of the system and the representation of black franchises has largely remained the same.
The alleged discrimination between the Black and White franchises, according to the lawsuit, increases the cash flow gap between the Black and White franchises. Out of the nearly 200 stores mentioned in the complaint, an average of $ 4 million to 5 5 million in compensation is paid, the complaint said.
The company said cash flows to restaurants run by the Black franchise are getting better, adding that it is committed to making improvements to work with the franchisee.
McDonald’s then made a proposal to cancel the January claim, which is pending.
The allegations of racism come at a time when the company’s workplace culture is in the spotlight.
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