Herb Washington owned more than a dozen restaurants in Ohio and Pennsylvania when he filed a lawsuit in February alleging that the company treated white owners better and denied him the opportunity to buy restaurants in more affluent communities.
According to Cleveland.com, McDonald's explained Thursday in a statement that the amount it paid Washington for 13 franchises was "no more than what we consider a fair price for the value of the restaurants."
"While we were confident in the strength of our case," the company said, "this resolution aligns with McDonald's values and allows us to remain focused on our commitments to the communities we serve." "Discrimination has no place at McDonald's," the company added.
As part of the settlement agreement, Washington agreed to drop the lawsuit and no longer own franchises.
According to the lawsuit, which was filed in federal district court in Youngstown, McDonald's attempted to steer Washington toward stores in poorer neighborhoods and that "black owners average $700,000 less in annual sales per store than white owners."
The company announced last week that it would invest $250 million over five years to recruit and support minority franchise owners.
In September 2020, more than 50 former black franchise owners filed a similar lawsuit against the company. According to the lawsuit, black owners were offered deals to buy stores in low-income areas, with higher security and insurance costs, and were denied things like rental assistance during renovations that white owners were given.
Washington is a former track and field standout at Michigan State University who spent parts of two seasons with the Oakland Athletics in the mid-1970s.