McDonald’s wants to replace older, longer-term franchisees with younger operators more willing to pump money into the business and is using remodel requirements and other means to accomplish the goal, a New Jersey lawsuit claims.
An 80-year-old franchisee, Sebastian Lentini, filed the lawsuit, claiming that the Oak Brook, Ill.-based giant refused to let the operator expand and made “unreasonable” remodel requests, all in a bid to push him out of the business.
The lawsuit accuses McDonald’s of age discrimination. A New Jersey judge denied the franchisor’s motion to dismiss the lawsuit earlier this week, allowing the action to proceed.
In its motion to dismiss, McDonald’s called the lawsuit “a largely vague and conclusatory hodgepodge of factual allegations” and called some of the claims “groundless.”
In a statement on Friday, a McDonald’s spokesperson said, “McDonald’s believes that each of these allegations is false and unfounded, and will vigorously defend itself in the matter.”
Lentini operates six locations in northern New Jersey and has been a franchisee for nearly 50 years, according to the lawsuit, which says he has three generations of family members who are involved in the business.
The lawsuit says that McDonald’s is “targeting him for no reason other than his age.” It also says that it’s part of “a broader policy aimed at pushing out older, long-term franchisees.”
The lawsuit said that McDonald’s wants to replace older operators with “newer, younger franchisees who are willing to spend considerable resources remodeling locations without regard for the economic impact on the profitability of such remodels.”
The lawsuit claims that a trio of corporate employees, Ingrid Rodriguez, Mwaffak Kanjee and Matthew Ajayi, who were named in the original suit, made statements indicating that they felt Lentini was too old to operate a location.
At one meeting, the lawsuit says, Ajayi told Lentini that his age “was an impediment to his continued involvement in the McDonald’s system and was a key factor in McDonald’s decision to prohibit his expansion.”
McDonald’s labeled Lentini “ineligible to expand,” and the company wouldn’t give him the opportunity to own new units built near his restaurants.
In one instance, according to the lawsuit, McDonald’s allowed the construction of one location less than 2 miles from one of Lentini’s units, without giving him the opportunity to build that restaurant.
But McDonald’s argued that Lentini gave up the rights to those claims because McDonald’s paid him an “impact payout” based on the opening of the store near that location. McDonald’s argued that it had “no legal obligation” to make the payment.
The lawsuit also says that the franchisor put financial pressure on Lentini by requiring that he completely rebuild one of his locations and adhere to the guidelines of its Experience of the Future program that includes self-ordering kiosks.
The lawsuit argues that McDonald’s “has failed to demonstrate or establish why” the remodel is necessary at one of Lentini’s locations.
The lawsuit says that the Experience of the Future guidelines “will functionally eliminate many older, long-term operators” who cannot pay for the remodels.
McDonald’s, however, argues that the Experience of the Future program is required of all operators, and that there is no claim that it made the requirement based on Lentini’s age.