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McDonald’s has been served with another federal class action lawsuit — this one seeking billions in damages — that accuses the fast food giant of racial discrimination against Black franchisees.
Brothers James Byrd Jr. and Darrell Byrd have operated McDonald’s restaurants for decades in and around Nashville, Tennessee, and say they have consistently been subjected to racial discrimination in being denied growth opportunities and saddled with unfairly high overhead, among other things.
They claim the McDonald’s corporation’s practices limit Black franchisees to restaurants in the least desirable locations and with the highest operational costs; penalize them with greater scrutiny and inspections; and deny them the same support white franchisees get to help them succeed.
“Although the Byrds risk retaliation (and potentially any chance at saving their only remaining restaurants) in bringing forth this action, they cannot allow other Black McDonald’s franchisees to be misled and injured by the same pipeline of discrimination that has plagued Black franchisees for decades,” the class action lawsuit states.
The brothers filed their class action lawsuit against McDonald’s USA LLC and McDonald’s Corp. on Oct. 29 in the U.S. District Court for the Northern District of Illinois. They say they are suing on behalf of themselves and 186 other Black franchisees “seeking racial justice and economic equality by holding McDonald’s accountable for its company-wide and decades-long violations of federal and state laws in denying [them] equal rights under their franchise agreements.”
The Byrds are asking the court to order McDonald’s to pay compensatory damages for the financial losses they’ve suffered, which they claim are as much as $5 million in damages per franchise, which could total upward of $3 billion, Reuters reported.
According to the class action lawsuit, by relegating Black franchisees to ownership of restaurants in the most difficult locations, the company has created a significant disparity, or “cash flow gap” between what Black owners make and what white owners do. The National Black McDonald’s Operators Association reports the earnings gap more than tripled between 2010 and 2019.
The Byrds’ class action also points to the fact that, while the total number of McDonald’s restaurants has more than doubled since 1998, the number of Black owners decreased by more than 50%.
James Byrd, a McDonald’s franchisee for 31 years, once had 10 restaurants but is down to only “two underperforming restaurants,” the class action says. Darrell Byrd, a franchisee for 22 years, once had four McDonald’s eateries but now has two.
Both men say their businesses have suffered from the increasingly high rent charged to them by McDonald’s, higher insurance costs due to their locations, denial of corporate support afforded to other, white franchise owners and a refusal to allow them to acquire restaurants in more desirable areas.
“McDonald’s has perpetuated a decades-long fraud by selling itself as a friend of Black America, yielding billions in profits to the company, at the expense of its own Black franchisees,” the class action lawsuit says. “McDonald’s led aspiring Black entrepreneurs to believe franchise ownership was a ‘Golden Opportunity,’ their ticket to the American dream. The reality was the opposite. Black franchisees signed up for financial suicide missions.”
The Byrd lawsuit is at least the second in recent months filed against McDonald’s over claims of racial discrimination against franchisees. A group of 52 former franchise owners filed their own class action Aug. 31 in federal court in Chicago.
In it, they accused the company of “systematic and covert racial discrimination” that denied them equal opportunities to succeed in the business and cost them money.
Those plaintiffs are making many of the same arguments as the Byrd brothers — that they were steered toward locations with the lowest earning potential and highest overhead costs in high-crime areas and given little if any support to help them succeed, among other things.
Franchisees aren’t the only ones accusing McDonald’s of racial bias.
Earlier this month, three Black employees at a McDonald’s in Rock Island, Illinois, filed a civil rights lawsuit against the company and the owner of their restaurant over claims that they were treated unjustly and discriminated against.
In July, three McDonald’s workers in Lakeland, Florida, filed a similar lawsuit claiming Black employees were discriminated against on the job and Black customers were subjected to racist remarks from the general manager.
In both cases, the plaintiffs said they were also subjected to and fearful of retaliation for reporting the racial discrimination.
On the corporate side, two McDonald’s executives filed a racial discrimination lawsuit in January claiming the company regularly fired Black executives and pushed Black franchisees out of business. The high-level employees said they were subjected to racial discrimination and a hostile work environment and were retaliated against when they fought back.
Are you a person of color who owns or has owned a McDonald’s franchise? Do you think the company treated you in an equal manner with white franchisees? Tell us about it in the comment section below.
Lead plaintiffs James Byrd Jr. and Darrell Byrd and the proposed Class Members are represented by James L. Ferraro, Janpaul Portal and Natalia Salas of The Ferraro Law Firm PA and William R. Fahey of Cooney & Conway PC.
The McDonald’s Racial Bias Class Action Lawsuit is James Byrd Jr., et al. v. McDonald’s USA LLC, et al., Case No. 1:20-cv-6447, in the U.S. District Court for the Northern District of Illinois, Eastern Division.
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3 thoughts onMcDonald’s Black Franchisees File Class Action Lawsuit Claiming Racial Discrimination
Add me please
I certainly agree that most Mc Donald’s that are located in certain areas is not the same in other areas. This is exclusion .
Thats all Mcdonalds is a bunch of Negro’s. No wonder when they eventually f ‘up they want to blame Y-TEE