LeRoy Walker, Jr. and a group of fellow black McDonald's franchisees accused McDonald's of giving them "subpar" stores and setting them up to fail in a federal lawsuit. The complaint charges operating a McDonald's franchise is a "financial suicide mission" for black franchisees. The charges were made in a lawsuit filed in U.S. District Court in Northern Illinois. The Wall Street Journal reported:
Several dozen former McDonald’s Corp. MCD -0.39% franchisees sued the burger giant, alleging it unfairly treated Black owners by selling them subpar stores and failing to support their businesses.
The lawsuit, filed Monday night in the U.S. District Court for the Northern District of Illinois, accused McDonald’s of steering Black franchisees to restaurants in undesirable locations in inner-cities for years. Those restaurants were destined to fail, and often had lower sales and higher operating costs, according to the lawsuit.
The Black former franchisees say their annual average sales of $2 million were $700,000 below the national average for U.S. McDonald’s owners between 2011 and 2016, according to the suit. Many of the 52 former owners from 18 states, including Georgia, Texas and New York, said they lost their businesses in the past four years. ...
According to the lawsuit, the number of Black operators in the U.S. fell to 186 this year from a high of 377 in 1998 because of what it described as the company’s racial discriminatory practices. “McDonald’s intentionally and covertly deprived plaintiffs of the same rights enjoyed by white franchisees,” according to the complaint. The suit seeks compensatory damages for owners of $4 million to $5 million per store for the more than 200 locations they once operated.
McDonald’s said the allegations that it evaluates Black franchisees differently were false. It said the total number of owners fell amid consolidation in the past several years, but that Black franchisees as a proportion of the roughly 2,000 U.S. restaurant owners remain largely unchanged. It added that the former franchisees who are suing the company operated restaurants in a variety of communities, and many retired after regularly making profits....
Jackson's own Leroy Walker, Jr. is a plaintiff in the lawsuit. The complaint states:
60. Plaintiff LeRoy Walker, Jr. is a Mississippi resident and a former Mississippi Region McDonald’s franchise owner/operator who became a franchisee in 1984 and was forced out in 2015. Between 2010 and 2015, Walker owned and lost one (1) store due to McDonald’s misconduct. He is Black.Mr. Walker and his fellow plaintiffs claim "Acquisition of a McDonald’s franchise under these conditions was nothing short of a “financial suicide mission.” (#87)
Kingfish note: The lawsuit engages in comparing some apples to oranges. It states the number of black franchisees fell (p.6) but then claims the number of restaurants doubled instead of comparing black franchisees to white or the total number of franchisees. Don't think McDonald's didn't notice that little discrepancy.
Oh well, maybe Leroy can set up a meeting for all of his fellow plaintiffs at the Jackson Convention Center, you know, the one he talked us into building.
67 comments:
Must have been the ice cream machine not working
Isn't there another black Mcdonald's franchisee in Jackson who owns like 20 McDonalds? I think he owns some radio stations too if I'm not mistaken. If I'm correct, he ostensibly was able to make a lot of money as a black mcdonalds franchisee and didn't partake in this lawsuit.
It would seem the local population would be to blame instead of Mcdonalds' Corporate. If I opened a restaurant in SW Jackson and it failed or cost more to run than in a place not openly hostile to business I'm not going to blame the franchising corporation.
Maybe if the ice cream machine worked, there would not have been such a big difference in gross sales.
Are the current local owners, who are also black, a party to this lawsuit? I believe thier last name is Joiner, and the company name is My Joy.
What? They were "sold" subpar stores? Instead, I would opine that they "bought" subpar stores...
Caveat emptor...
Shakedown time!
It is absolutely racist to try to refute their claims. Shut up and pay up.
Oh and this is never going to end because weakness has already been displayed.
He owned at least one franchise for 31 years. Long time if it wasn’t a good deal.
Let’s see. McDonald’s sold these people stores that they knew would fail. Banks loaned these owners money to establish shores designed to fail. I guess those law suits will come soon.
This and any other vague racial lawsuits will be quietly and quickly settled because no global megacorp wants to be called racist after making such a big deal about standing with BLM and supporting the fight against racial injustice. Every corporation has millions set aside for when their day comes.
The saddest part is whites who are still the majority are always paying for this in one away or another.
Yea, what is it with the ice cream machine on Lakeland. It's been broken for years. How hard is it to fix an ice cream machine.
could it be subpar stores due to poor service, wrong orders, lazy workers bad management and nasty stores????
I'm just saying
I don't eat at Micky Dee's.
Food is way to processed!
If the plaintiffs think McDonald's corporate attorneys are "woke," they've got another thing coming. On the other hand, maybe 10:09 is right about avoiding bad press.
If Mr. Walker had problems, it's more likely due to the crap service at his restaurants for years when he owned them. Forget CFA, gimme an Arby's employee over a local McDonald's employee any day of the week.
IMO both the Plaintiffs and McDonald’s Corp. are guilty (and incredibly stupid) of thinking building and operating a reputable chain restaurant in an urban warzone like Jackson would ever be profitable. Unless Ronald McDonald himself was holding a loaded gun at Walker and the other 51 dummies forcing them to sign their franchise agreements, I don’t see how McDonald’s is legally liable for their poor judgment. McDonald’s is not a non-profit; it is a (white-owned = EVIL) global corporation that is focused on maximizing profit. If any store isn’t profitable they are rightfully going to be dinged by corporate.
If I were the judge I would throw this out as a frivolous lawsuit. But in today’s climate, you know McDonald’s is going to bend over and agree to pay out a multi-million dollar settlement out of court just to get the racism charge out of the headlines, which is what Walker and his fellow shake down artists are counting on.
The ice cream machines aren't broken, McDonald's requires the machines to undergo a nightly cleaning cycle that can last four hours.
They either never do it and tell you its broken, or they do it during peak hours.
Where did Leroy really want to open a franchise all those years ago? Seriously, his participation is laughable.
@KF 10:25 Give me an employee of McD's or any other fast food chain where I live now over anyone in Metro Jackson, except the Madison and Clinton Chick fil A. The overall concept of customer Service left Jackson years ago. It's like a diamond in the rough now.
Mc D will settle. Claims are crap just like their service at these stores. And I thought banks redlined blacks for loans? Hmmm?
In the world of corporate law this is all in a day's work. Some business owners who happen to be black didn't make nearly the profits they hoped to make and would like to recoup if possible. Some slick lawyers who can find an angle in a laser beam know that this is prime time for a racial discrimination civil class-action. What's the angle? Black owners. Money might be on the table. Go get it. McDonald's lawyers who are no novices themselves will seek to minimize or erase the whole thing. Nothing personal, just business. Race isn't the real issue. Money is. All in a day's work.
Why aren't his claims barred by the statute of limitations?
They left out the part that one of the complaints about the "sub par" stores was that they were in black neighborhoods. Apparently crime, theft, arson and rioting drove up insurance costs. Maybe they can put a McDonalds where that Wendys was in Atlanta.
The upside here is the food can last up to a quarter of a century so they have time to work things out.
The franchise in Meridian is owned by a white guy. Meridian may be the biggest low income shithole in the state. Why is he not in on it?
Well said 10:25 Kingfish.
Love that Arby's put some much meat in their food. Service with a smile.
Maybe Leroy’s business problems stem from his restaurants sh*tty service and dirty environments.
This isn’t a race issue. It’s a shake-down.
This is absurd. McDonald's is in the business of making money. The lawsuit presupposes that McDonald's intentionally awarded franchises to the plaintiffs that they thought would lose money. Who does that?
The McDonalds in Collins Mississippi customer service/ wait time is slow and the drive thru walls are real nasty! However it’s in a prime location (hwy 49 south across from a red light) with a lot of local and out of town passerby! This place be jumping(busy).
Location, Location and Location!!!
If Leroy,Jr.'s 31-year ownership of a location is representative, then these owners are attempting to hold McDonald's responsible for the fact that NEIGHBORHOODS HAVE CHANGED, and profitable locations have become less profitable.
Neighborhoods change - generally for the worse - particularly in Jackson. Cynical assumptions generally prove correct. Ideologically-forbidden views frequently lead to wise investment strategies. McDonald's cannot, in any RATIONAL world, be held accountable for some investors' ability to see decades into the future, or for other investors' INABILITY to do so.
Next time, Leroy should look into franchising a McDowells instead, lol!
https://www.youtube.com/watch?v=djI_ret3S9g
Kingfish is an Arby's Guy? I knew I liked you. Give me a classic roast beef with lettuce, tomato, and horsey sauce any day. Ruben is pretty good too. And Tater Cakes? MMmmmmmmmm. Don't get me started. Haven't had a fried cherry pie in years, but I have so many find memories of them.
All McDonald's customers should switch to Arby's in Protest!
Mr.Walker ,like many Black businessmen,is a beneficiary of affirmative action.His success is due to racial preferences rather than merit or ability.
If I were McD's council, I would ask for the tax returns and balance sheets during discovery. Show just how much money they did make and just how greedy these plaintiffs are. I bet you would see a pattern of money made and not re-invested into the franchise for upgrades.
First the background: I worked at the Mcdonalds in South Jackson and at the (then) brand new one they opened in the garage at the Holiday Inn downtown on Amite in the 1970's. At the time they were owned by a white guy who lived in Clinton (I believe it was Clinton). Different era - we had an army of teenagers working there. Boys did food prep, girls worked the cash register and drink fountain. Boys washed equipment and mopped, girls broke down the drink machines and cleaned counters and tables. Food was made and, if not served within an hour, thrown out. And Mickey D's did huge business - especially the one on I-55 frontage road and Northside Drive. Even as a cynical teen, I thought it was a well-run operation. Made around $2.20/hour.
I guess the profit margins were better then, because today you have, what, 2-4 people working an entire shift. Service is terrible, and quality control on the food is worse.
My take on the lawsuit is that the fast food business changed and not for the better. There is only so much people will pay for a Big Mac and the fact that they have to pay today's minimum wage and still have a "Dollar Menu" means something has to give somewhere. That applies whether you are a black or white owner.
Sue someone else because you do not have the ability to run a company.
Sounds like Mississippi. Seems like I remember a car dealership owner doing the same thing when he couldn't do the job. What is it with Mississippi putting the blame for their failures on others?
@1:16 that Arby's rueben is a very good sandwich for fast food.
They are just piling on. If there was ever a good time to bring such a lawsuit, this is it. And its not just about BLM. McDonalds has all sorts of well-publicized internal issues with executive management.
11:14 Perfect summary of what's actually going on here! It's just a shakedown by the plaintiffs, because they know McD's will have a fear of bad publicity. Pure and simple.
Plus, these plaintiffs were never seeking assured opportunity, they were seeking assured outcome.
"Broken Ice Cream Machines" that is just code for they are always broken. Someone did a Facebook post and it turned out in one day machines all over the U.S. were down. Yeah the cleaning reason is always used, it may be true. A lot of former workers say it is because ice cream is labor intensive so it is easier to focus on higher profits items.
Today what is the two items most all stores are not selling? Yogurt with fruit and ICE CREAM. Why? It is labor intensive. They need to focus on more profitable stuff that is less labor intensive.
Yes Sonic and Chic Fl A have problems with their machines too, but at a rate that is tiny and almost non existent when compared to Mickey D's.
Gawd this is so typical in today's "culture".
Have a shitty McDonalds franchise ? . . . blame it on whitey.
Lazy, nonchalant and actually a few belligerent employees would NEVER EVER affect an owner's profit margin.
One question...are ANY of the commentators current or former owners of a McDonald’s franchise?
Give me a Fing break. McDonalds sure as hell does not want businesses with the big golden M to fail regardless of who runs them.
Can you tell me what constitutes a "Sub Par" store? Does that mean bad location?
The women owners will be right behind. Just google "McDonald's HR investigation" OR McDonald's CEO investigation. Plaintiff's attorney's dream. Highly profitable corporation with deep pockets with documented cultural problems during a time of "me too" and BLM.
That sausage biscuit ain't gonna be just a dollar soon.
" brand new one they opened in the garage at the Holiday Inn downtown on Amite in the 1970's."
That was actually a good McDonalds.
I used to grab a Big Mac and fries from that location a couple of times each week during that era.
However, the fries haven't been the same since (at any McDonalds) since they caved in to the PETA crap about using beef fat.
But I digress.
Why doesn't he sue the city of Jackson for allowing the neighborhood to change. That would have as much merit as what he's doing. Regardless, if there is enough traffic and a McDonald's can't succeed then the first person you should look at is the person in the mirror.
This doesn’t compute. I would think a fast food joint owned by blacks, run by blacks and catering to blacks (especially after the 365black.com employee website launched) that you’d get absolute top notch service.
Which is why, 4:36, McDonalds will fight this. Corporate reparations via a claim of minority discrimination is not a good precedent for thwarting future litigation from "roll the dice" trial lawyers.
This type of shit is why some folks want to keep the old flag regardless how defiant and insensitive.
Interesting thoughts here. I have read many books on McDonalds and one thing that always got my attention is that McDonalds Corporate does not consider themselves a fast food company. Rather they are a real estate investor. Corporate looks for good locations for stores, buys the land, then builds a store (therefore they own the land and the building). A franchisee is then selected to run the store for corporate in exchange for rent and a percentage of profits. With McDs an individual franchisee is not important to McD's corporate -- a franchisee is given a set of standards and a yearly review determines if the franchisee gets to keep it for another year. That's why you never see a McDs closed because corporate just gets another franchisee to take over the store(s). These plantiffs are all complaining because of their own business failures.
Have you been to Leroy’s stores? Madison McD’s sucks. How does Mary even allow them to stay open? They are horrid. Dirty. Employees are poorly trained. Managers work themselves to death because the employees don’t show up. If I had a McD franchise I would hire a Chika-lica-Fil-la manager, give them a profit incentive, and tell them to run it just like the Jesus Chicken stores. How hard is that?
What was the name of that goofy club that started this same shit about five years ago ?
"Respect Jackson's black dollars" . . . or something like that ???
(But that's not racist).
Don’t know who owned it, but the McDonalds on Hwy 51 in Ridgeland had awful awful service. I’m talking 10-15 years ago.
Re 2 to 4 working at any given time.
Theyve automated so much now to streamline every aspect to cut payroll and waste and maximize efficiency or so I read in an article in recent yrs.
Reservoir location gets lots of complaints as well.
Never hear much from Kane Ditto's fave location at River Hills
Black franchisees? More like black disenfranchisees...
8:57, I've never seen a "black" dollar, is this some sort or alternative currency? I've only seen the green ones...and at my place of business I'll accept them from anyone regardless (or irregardless for those of you in Niknar) of race!
Free market capitalism is an economic competition and they got their asses handed to them.
McDonalds as a whole has the most piss poor customer service of any fast food establishment. I quit going. Where it not for kids wanting happy meals, I suspect they would have failed year ago.
WOW, more than 50 c0mments and 50 is the JJ gold standard. alot of people here professing first hand knowledge of mcdonalds food. thats be cause they probably eat it 10 times per week. one of the most compelling sights you will ever see is the huge line of cars around the rankin county spillway macdonalds at supper time on sunday night. thats right folks, mcdonalds for sunday dinner. its no wonder that mississippi is the runaway leader it not just obesity, but morbid obesity.
fat, grease, processed, no food value, million calories, sugar and starch . hey.........mcdonalds!!!........its what's for dinner..........even on sunday night.
Lemme get this skraight - I can sue and claim racism because I'm a crappy businessperson and I didn't do my own due diligence regarding store locations, etc?
Hmmmm
@ 8:54PM, Leroy has not owned a McDonald's Restaurant in Jackson for more than 10 years. He did own the one in Canton even after he was rid or stripped of his Jackson locations.
Is Leroy still on the Board of Directors of Trustmark? At one time he had numerous stores that were obviously profitable or he wouldn't have been added to the Trustmark Board. Sounds like he is jumping on a law suit because he thinks he will get a settlement. What an opportunist.
I don't own one, but from what I've read & heard...A Mickey Ds restaurant will only average around 200-250k in profit...if run efficiently...you really have to baby it to get it's profits up, not something that you can put on cruise control...the ones who make money are owners who have lengthy experience and multiple stores with good management.
This kinda reminds me of the FORD ownership plan quite a few years ago. One of our one term ex-politicians owned a dealership in Canton. He said he really didn't want to sell when FORD approached them, so he threw out a number they would balk at....and they took it. Then financed it for another buyer...If anyone remembers, FORD had to take it over because the new owner had sold a lot of vehicles and hadn't paid FORD for them.
Amid the lunacy there was a story about a customer at a McDonald's in England going through the drive through & the restaurant refused to serve them...because they were on horseback...she went inside, bringing the horse...the Police showed up and issued a fine, but not before her horse turned the lobby into a restroom...
https://www.bbc.com/news/uk-england-manchester-23403935
none of the RANKIN COUNTY family values republicans wants to touch that comment at 10:23
with a 10 foot french fry. come on all you pine lake baptist hypocrites, WHERE ARE YOU?
Leroy Walker owned and ran McDonald's restaurants when we moved here thirty years ago. He became a rich man running those burger-doodles. Why is he bitching now?
Jackson Area McDonalds are the shining example of bad customer service, poor employee moral, and flat out rude employees. Maybe Leroy should look in the mirror first.
McDonalds has a special program in the 70s and 80s with special plans to help minority owners buy locations. They bent o we backwards to train and help and offer reduced financing and now they want to whine?
" pine lake baptist hypocrites"
Now religion is bing interjected into this current McDonald's fiasco discussion ?
Gawd, that's like trying to have an intelligent conversation with a baby Marxist
or a creative in "The Fondren'.
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