McDonald’s has called on a judge to throw out a lawsuit from a group of black former franchisees who have accused the fast-food group of putting them out of business by setting them up to fail.
About 50 former franchisees claimed in the suit that there had been an “exodus” of black franchisees from the McDonald’s system over several years as the company located them in depressed districts with out-of-date facilities. They are seeking damages averaging between $4m and $5m an outlet.
McDonald’s said at the time that the allegations were meritless, and on Friday the company — whose legal team includes Loretta Lynch, former US attorney-general — provided a fuller defence as it hit back with a court filing.
“The plaintiffs’ accusations are grounded almost entirely on speculation, ‘information and belief’ and conclusory assertions,” McDonald’s said in its filing with the US district court for the Northern District of Illinois.
McDonald’s accused the plaintiffs of relying on “vague anecdotes that fail to specify who did what to them and when”.
In their lawsuit, filed at the end of August, the former black franchisees claimed that McDonald’s had “steered” them to high-crime areas with high operating costs and failed to assist when they — unlike their white counterparts — ran into financial problems. They also alleged that the company subjected them to higher standards through tougher inspections.
As a result of such treatment, according to the lawsuit, the number of black franchisees in the system declined from about 400 in 1998 to fewer than 200. Restaurants run by black franchisees had lower average annual sales than the rest of the system, it alleged.
On Friday McDonald’s said the plaintiffs’ case lacked “concrete facts that support their expansive claims”.
“At its core, [the] plaintiffs’ claim is that they should have been more successful,” the company said. “But success is promised to no one, and plaintiffs’ struggles — while regrettable — are simply not a basis for a claim against McDonald’s.”
McDonald’s further argued that the former franchisees’ claim was “illogical, as it suggests the company somehow has an interest in undermining its franchisees and seeing them fail”.
In a media statement, McDonald’s added that it was defending against the lawsuit “even as we move forward with the actions needed to foster an environment where equitable opportunity is part of the lived experience” at the company.
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