Operations

McDonald’s calls Black franchisees’ lawsuit ‘illogical’

The company, seeking to dismiss the lawsuit, says it doesn’t make sense that it would undermine owners to see them fail.
Photograph: Shutterstock

McDonald’s blasted as “illogical” discrimination allegations made over the summer by Black former franchisees, saying that it makes little sense that the company would seek to undermine any of its owner-operators, a group it relies upon to run its restaurants successfully.

The comment came in court filings on Friday seeking to dismiss the federal lawsuit, filed in August by more than 50 Black current and former franchisees—who described a systemic pattern of racial discrimination that prevented them from succeeding and drove them out of business.

“On its face, this claim is illogical as it suggests the company somehow has an interest in undermining its franchisees and seeing them fail,” company attorneys said in court documents.

McDonald’s also blasted the complaint as “grounded almost entirely on speculation, ‘information and belief,’ and conclusory assertions.”

“Plaintiffs point to no specific promises made or broken, or to any concrete facts that support their expansive claims of discrimination, as they must in order to prevail in this case,” McDonald’s said. “At its core, plaintiffs’ claim is that they should have been more successful. But success is promised to no one, and plaintiffs’ struggles—while regrettable—are simply not a basis for a claim against McDonald’s.”

The operators’ lawsuit against McDonald’s came amid a number of racial discrimination actions against McDonald’s, including one in January filed by a pair of executives who said the company abandoned the Black market and drove certain franchisees out of the system. The franchisees operated restaurants all around the country and had a wide range of experience, as much as 30 years.

The franchisees’ complaint suggested that relations between McDonald’s and its Black franchisees have soured since the departure of CEO Don Thompson, the first Black chief executive in company history, in 2015.

McDonald’s has fought these allegations hard, both in court and out of it. Out of court the company has been clearly targeting younger and non-white consumers with back-to-back marketing agreements with rapper Travis Scott and reggaeton artist J Balvin. The company also made a public vow to improve the diversity of its system, including its base of franchisees.

In court McDonald’s hired Loretta Lynch, who was attorney general under President Obama from 2015 to 2017 and was the first African American woman to hold the position, to defend itself in the franchisees’ lawsuit.

In its filing, McDonald’s argues that the franchisees’ “vague and conclusory allegations” are “insufficient to support a plausible inference that McDonald’s engaged in a nationwide conspiracy to discriminate against its Black franchisees.”

The filing says that some of franchisees’ claims are past the statute of limitations in Illinois, and that they didn’t make “an actionable claim for breach of contract.”

The company made some defense of its “legacy of opportunity for diverse members of its franchise system,” and said that if the lawsuit were to go to trial, “the facts would show that they are meritless.”

But most of its filing dealt with the legal issues of franchisees’ complaint and on the allegations of discrimination, which McDonald’s called “fatally flawed.”

“The essence of plaintiffs’ complaint is that McDonald’s—whose entire business model depends on a wide network of successful franchisees—had a secret strategy spanning decades to undermine Black owner-operators across the country,” the company said.

The filing noted that the franchisees “offer nothing in support of this extraordinary theory beyond vague and conclusory assertions, self-serving speculation on ‘information and belief,’ and a handful of personal anecdotes.”

The company called the claim “wholly implausible.”

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