McDonald’s Corp. is the subject of a lawsuit by more than 50 Black former franchisees in the U.S. who say they were driven out of business after being pushed by the company to set up shop in crime-ridden areas and denied financial help extended to White franchisees, Bloomberg News reported. The Black franchisees were steered to inner-city and urban areas with low-volume sales and high security and insurance costs, and were refused favorable franchise terms because McDonald’s unfairly graded their performance, according to a copy of a complaint filed Tuesday in Chicago federal court. The complaint couldn’t immediately be verified in court records. The 52 franchisees are seeking as much as $5 million in damages for each of more than 200 stores they operated. McDonald’s said in a statement today that it categorically denies the allegations that the franchisees were unable to succeed because of any discrimination by the company. The Black franchisees’ average annual sales of $2 million was less than McDonald’s national average revenue of $2.7 million from 2011 to 2016 and $2.9 million in 2019, according to the Ferraro firm. A historic high of about 400 Black McDonald’s franchisees in 1998 has dropped to less than 200 today because of the revenue shortfall, the franchisees said in their complaint.
