- Last year, whistleblowers went public with allegations that McDonald’s “pushed out” Black franchisees and discriminated against its own Black executives.
- This led me and 76 other Black franchisees to file a lawsuit claiming the company defaulted to put Black owners in unstable urban areas.
- Through our allegations, we aim to show how McDonald’s has treated its Black owners as second-class citizens.
- This is an opinion column. The thoughts expressed are those of the author.
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I played six seasons in the NFL and never took a hit as hard as the ones McDonald’s put on me during my 24 years as an operator of several franchises in Atlanta.
Becoming a McDonald’s franchisee in 1992 was a dream come true. Unfortunately, I entered a system that essentially quarantined Black operators into less-stable, less-profitable areas while White franchisees were given safe, lucrative locations where they could print money.
Early last year, internal corporate whistleblowers went public with allegations showing that McDonald’s “pushed out” Black franchisees and discriminated against its own Black executives. This disclosure was a moment of clarity for me and dozens of other former operators. We believe we faced discrimination that was not random, but systemic and occurring at the same time McDonald’s was publicly portraying itself as a friend of the Black entrepreneur and profiting greatly from millions of Black customers.
This whistleblower lawsuit was the reason I and 76 other former franchisees filed a federal lawsuit last year. Our suit claims that the company’s default position was to put Black owners into unstable urban centers where White operators would rarely if ever be asked to buy a store. If he or she had a choice, what operator – White or Black – would seek out a store in areas where drug deals, theft, gang violence and, sometimes, murder are regularly on the menu?
I know this firsthand. McDonald’s “offered” me four stores with a “take-it-or-leave-it” attitude. Three of the four stores were in what I charitably call economically distressed, high-crime areas. All needed major rebuilds or renovations.
While our lawsuit is complex, it clearly sets out its claim that Black operators – because of terrible locations – were forced to pay hundreds of thousands of dollars out of our own savings for security to protect employees, customers and property. It asserts that we were given misleading data to sway location decisions and when we finally took over a store, many – like mine – were in disrepair and in need of drastic modernization. And – adding insult to injury – that we were on the hook for the renovation costs. Perhaps its most troubling allegation is that Black franchisees were regularly given poor internal reviews that later could be used as justification for terminating franchise contracts.
I was one of those under the microscope. Inspectors would regularly arrive unannounced late on Friday nights with what seemed like a goal of documenting the smallest infraction. In a burst of candor, one of the officials suggested I, as a mere three-store operator, should just sell my stores and get off the stage.
This kind of treatment is symptomatic of the decline of the Black operator. In 1998, there was an all-time high of 377 Black franchisees; today only 186 remain. At the same time, the number of McDonald’s stores have gone from just over 15,000 to 36,000.
Our lawsuit claims the average annual sales for the Black-owned stores was about $2 million. This sounds like a big number, but it is $700,000 below the company’s national average per store of $2.7 million from 2011 to 2016 and $2.9 million last year.
McDonald’s has always had a tense relationship with Black Americans. It took a boycott in the late 1960s for the first Black franchise to open its doors. In the 1980s, American Civil Rights leaders like Rev. Jesse Jackson were warning McDonald’s that Black franchisees were being subjected to a double standard. In the 1990s, a top McDonald’s executive is quoted in the lawsuit’s complaint as saying the “company has placed many Black Franchisees in restaurants that have not allowed them to achieve the same level of economic success as their peers.”
McDonald’s is always coming up with new marketing ideas to curry favor with its Black customer base, but they may do little more than make those in the C-Suite feel a little better about themselves.
Undoubtedly, McDonald’s is one of the world’s great brands and it is shameful that it may take a federal lawsuit to make the company face the accusations that it has been treating its Black owners as second-class citizens.
[Editor’s note: McDonald’s has denied the claims made in the author’s lawsuit, calling the accusations “a conglomeration of incendiary and baseless allegations – with skewed ‘facts’ and cherry-picked information- that unsuccessfully seeks to assert a claim of intentional discrimination.” The company has also filed a motion to dismiss the lawsuit.]