Franchising

1 of 3 Black franchisee cases against McDonald's dismissed

Photo: iStock.

June 11, 2021

A case filed in U.S. District Court last October by two Black McDonald's franchisees was dismissed this week because the judge said the pair failed to provide the facts needed to back up their allegations against the Chicago-based QSR company, according to Insurance Journal.

Judge Harry D. Leinenweber, of U.S. District Court in Northern Illinois, said James Byrd Jr. and brother, Darrell Byrd also failed to file their suit within the two-year statute of limitations timeframe, relative to the incidents which last occurred in 2012. However, the Byrds have 30 days to file an amended complaint with the court that might comply with those stipulations.

The Byrds — who sought to convert their suit to a class action — have been franchisees of the QSR chain for decades. In their suit, the brothers contended that McDonald's has a "predatory" growth strategy that aims squarely at the Black community and that the company steers Black franchisees to Black neighborhoods, with higher overhead costs, where white franchisees won't own stores. The brothers alleged that strategy not only narrowed the pool of Black franchisees, but also increased the difference in the money being made by Black and white franchisees.

McDonald's contended the Byrds didn't show intentional discrimination and also failed the so-called "but for" or "sine qua non" rule, which considers whether the injury would not have occurred, "but for" the defendant's — in this case, McDonald's — negligent act. McDonald's also said the acts alleged all occurred after the statute of limitation had ended.

The Byrds did counter that defense, stating their complaint shows the allegations were part of an exception to the statute defense involving a "continuing violation."

The judge, however, disagreed, stating the U.S. Supreme Court has found otherwise. He also said that allegations that McDonald's sends Black franchisees to economically disadvantaged areas is "pre-contractual conduct and subject to the two-year statute of limitations."

Aside from the Byrds' suit, McDonalds's faces similar suits filed by more than 50 Black former franchisees, another current Black franchisee, Herb Washington and by Black media mogul, Byron Allen, who alleges the firm is discriminatory in its advertising channel choices.