McDonald's Is Being Sued For Redlining Black Franchisees

Racism can take many forms, and one of the most pernicious, lasting racist economic practices is "redlining," in which Black people (and other minority groups) are deliberately pushed into certain geographical areas, forced into certain kinds of housing, and denied the loans necessary to renovate their homes and businesses, all of which promotes racial segregation and harms their financial opportunities. The practice, which is illegal, nonetheless persists, and now McDonald's is being accused of redlining by 52 Black former franchisees.


The story, which comes to us via NPR, says that the former franchisees allege in an ongoing federal lawsuit that McDonald's deliberately steered them toward impoverished neighborhoods, where sales numbers are lower but the cost of insurance, and security, is higher. Per NPR:

"McDonald's knew or should have known that these differential revenue and operating costs of Black-operated franchises as compared to White-operated franchises are not random or due to poor management," the lawsuit said. "These differences are statistically significant and are the result of the historical racial bias and barriers built into the McDonald's franchise system."

The additional details alleged by the lawsuit are damning and extensive. The former franchisees say that they were subjected to more frequent inspections, which occurred late at night and at odd hours, were deliberately steered toward older, poorly maintained buildings with sales numbers that showed they were underperforming, and were prevented from purchasing more lucrative locations. That same underperformance also meant that the business owners were subject to more corporate scrutiny than they might have been otherwise.


As NPR points out, the company was also sued in January by two Black senior executives who alleged the company drove out Black leaders and franchisees. Even putting aside the rising influence of the Black Lives Matter movement, which has led to increased scrutiny of corporations, McDonald's racial equity track record looks particularly bad right now.