“CLEVELAND, Ohio — A Black businessman who owns McDonald’s restaurants in Cleveland sued the fast-food chain Tuesday, claiming it steered him to underperforming, inner-city markets while his white colleagues thrived in the suburbs.
Attorneys for Herbert Washington, a former player with the Oakland A’s, filed the lawsuit in U.S. District Court in Youngstown, alleging that he was a victim of longstanding racial discrimination. Washington, 69, has been affiliated with McDonald’s for 40 years.
“I will no longer give up my seat on the bus,” Washington said, mirroring the words of civil-rights icon Rosa Parks.
Washington runs 14 restaurants, including three in Cleveland. That’s down from the 23 he had in 2017, when the lawsuit alleges McDonald’s pushed to drive him from its system.
“By relegating Black owners to the oldest stores in the toughest neighborhoods, McDonald’s ensured that Black franchisees would never achieve the levels of success that white franchisees could expect,” the lawsuit says. “Black franchisees must spend more to operate their stores while white franchisees get to realize the full benefit of their labors.”
McDonald’s fired back, saying Washington’s issues stem from poorly run businesses. The corporation stressed that it does not choose where operators seek to run businesses. It only makes recommendations.
“This situation is the result of years of mismanagement by Mr. Washington, whose organization has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment,” the company said in a statement.
“His restaurants have a public record of these issues, including past health and sanitation concerns and some of the highest volumes of customer complaints in the country.”
The corporation said that nearly 30 percent of its franchisees “are ethnically diverse.” It said cash flow at Black-operated restaurants “continues to improve, and McDonald’s is committed to working with franchisees to make improvements.”
Washington’s 50-page lawsuit echoes the same issues of a lawsuit filed in U.S. District Court in Chicago by Black operators of McDonald’s restaurants. The suit, brought in October, is pending.
Washington alleges that the chain discriminated against Black franchisees by steering them to inner-city stores. He claims that he once attempted to buy a site on Cleveland’s West Side, which would have had higher volume and sales, but the corporation refused, according to the lawsuit.
In 1998, McDonald’s had 377 Black franchisees in the United States; today, there are 186, according to the lawsuit. Most of them own several restaurants. During that time frame, the corporation’s U.S. restaurant locations increased from 12,472 to about 14,000.
“These numbers are not a coincidence,” the lawsuit says. “They are the result of McDonald’s intentionally racist policies and practices toward Black franchisees.”
The suit says Black owners average about $700,000 less in annual sales per store than white owners.
“This, too, is not a coincidence,” the lawsuit alleges. “Nor is it because Black franchisees are comparatively worse at running businesses. The precipitous decline in Black franchisees and persistent disparity in cash flow are the direct and proximate result of McDonald’s intentional racist conduct.”
While McDonald’s owns and operates some of its restaurants, the suit says, individual franchisees own most of its stores. The filing Tuesday says McDonald’s charges the franchisees fees for the right to operate the restaurant. The corporation provides the menu and other items, but it is up to the owner to run it.
The lawsuit says Washington has been “a victim of McDonald’s predatory, racially biased steering practices and other disparate treatment, as well as retaliation for his opposition to the discrimination Black franchisees have long endured in the McDonald’s system.”
Washington told reporters after the filing that McDonald’s recently offered to bridge the earnings gap between his restaurants and those of his colleagues by offering him $6 a day at each of his restaurants.
“I can’t even buy a Happy Meal for that,” he said.
McDonald’s stressed that the number of franchisees has declined across all demographic groups. It has said that the issues involving Washington stem from poor management, which included personnel and customer satisfaction. It also pointed out health and safety concerns.
Washington’s attorneys said they were expecting the remark, continuing the corporation’s bias against Washington.
“Over 40 years, you are going to hit some speed bumps,” Washington said.”
Cleveland.com | John Caniglia | February 16, 2021
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