McDonald’s Wins First Round in $1 Billion Discrimination Lawsuit by Former Black Franchise Owners

McDonald's Corp. has temporarily resisted a lawsuit filed by 52 Black former franchise owners who claim the fast-food company set them up for failure by directing them to crime-ridden, low-income areas.

Source: Reuters | Published on October 4, 2022

McDonalds lawsuit

In a written order last week, a federal judge in Chicago dismissed the 2020 lawsuit, but gave the plaintiffs until Oct. 21 to file an amended complaint. The judge did not explain why the case was dismissed.

Despite its public commitment to diversity and Black entrepreneurship, the plaintiffs claim McDonald's has not provided profitable restaurant locations and growth opportunities to Black franchisees on the same terms as white franchisees. They are seeking damages of up to $1 billion.

McDonald's has denied wrongdoing and stated that, while it may make recommendations for store locations, franchisees make the final decisions.

According to a company spokesperson, the case was dismissed "because the plaintiffs had no facts to support their arguments."

"Discrimination has no place at McDonald's, and we remain committed to taking action to attract and support franchisees who reflect the diverse communities we serve," the company stated.