McDonald's defeats Black franchisees’ bias lawsuit, for now

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(Reuters) – McDonald’s Corp. has temporarily beat back a lawsuit by 52 Black former franchise owners who claim the fast-food giant set them up for failure by steering them toward crime-ridden, low-income neighborhoods.

A federal judge in Chicago dismissed the 2020 lawsuit in a written order last week but gave the plaintiffs until Oct. 21 to file an amended complaint. The judge did not explain why he dismissed the case.

The plaintiffs claim McDonald’s has not offered profitable restaurant locations and growth opportunities to Black franchisees that were on the same terms as white franchisees, despite its public commitment to diversity and Black entrepreneurship. They are seeking up to $1 billion in damages.

McDonald’s has denied wrongdoing and has said that while it may recommend store locations, franchisees make the final decisions.