Restaurants

McDonald's seeks dismissal of racial discrimination lawsuit by former franchisees

Key Points
  • McDonald's is asking a judge to dismiss a racial discrimination lawsuit filed by 52 former franchisees.
  • The fast-food chain said that it wants every operator in its system to thrive.
  • In September, the plaintiffs filed their complaint, alleging that the company denied them the same opportunities as White operators.
A customer pulls into a McDonald's restaurant.
Luke Sharrett | Bloomberg | Getty Images

McDonald's on Friday asked a judge to dismiss the racial discrimination lawsuit filed by former franchisees, arguing that it wants every operator in its system to thrive.

The company also said that the complaint from 52 Black plaintiffs relies on "vague and conclusory allegations" and fails to provide viable claims of intentional race discrimination, breach of contract and fraud.

McDonald's also said that the statutes of limitations for such claims has expired, based on when the operators exited the franchise. The statute of limitations in Illinois, where the suit was filed, for discrimination during a contract is only four years.

"Plaintiffs' case is based on the illogical theory that McDonald's went into business with Black franchisees for the sole purpose of seeing them fail, despite the company's obvious interest in franchisees maintaining successful and profitable restaurants," Loretta Lynch, the former attorney general and current legal counsel for McDonald's on the case, said in a statement.

In September, the former franchisees alleged that the fast-food giant denied them the same opportunities as White operators and steered Black franchisees to low-income neighborhoods, where they had higher security and insurance expenses and lower sales.

The plaintiffs say their losses are $4 million to $5 million per location on average, after subtracting restaurants' costs from missed revenue over the years active.

McDonald's said in a statement that it takes the allegations in the case very seriously.

"We will defend against this lawsuit even as we move forward with the actions needed to foster an environment where equitable opportunity is part of the lived experience for McDonald's franchisees, suppliers and employees," the company said.

A representative for the plaintiffs did not immediately respond to a request for comment from CNBC.

The lawsuit is at least the fourth filed against McDonald's this year claiming racial discrimination. In January, two senior McDonald's executives, Vicki Guster-Hines and Domineca Neal, filed a lawsuit against the company, alleging racial discrimination. The lawsuit includes claims that the chain fired African-American leadership and pushed Black franchisees out. McDonald's has argued that the court should strike some allegations from the suit, including those regarding Black operators.

Restaurant workers in Illinois and Florida have filed two separate cases alleging harassment and retaliation tied to their race.

VIDEO2:5502:55
Attorney representing 52 Black former franchise owners explains why they're suing McDonald's