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The long history behind allegations of racial discrimination against McDonald’s

African American franchisees have challenged fast food companies’ policies for decades.

Activists turn out at a McDonald's in Los Angeles during a Strike For Black Lives rally in July. (Frederic J. Brown/AFP/Getty Images)
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Television viewers of a certain age may remember the McDonald’s “Calvin” commercials from the early 1990s. The earnest ad series featured Calvin, an African American teenager who began work as a McDonald’s crew member and quickly gained a sense of purpose and respect from his community. Calvin’s hard work would get him promoted to the McDonald’s “management team,” and one of the later ads hinted that he might own his own franchise one day.

Had Calvin been a real person and gone on to acquire his own McDonald’s franchise, today he might be among the 52 former Black McDonald’s franchisees who are suing the Chicago-based company and accusing it of discrimination. The former franchise owners allege that McDonald’s misled them about costs associated with owning outlets and sought to confine them to less profitable restaurants in minority communities that also came with higher security and insurance outlays. According to the lawsuit, McDonald’s also pressured Black franchisees to renovate their restaurants more quickly and without the same financial support it provided White franchisees.

In an emailed statement, McDonald’s denied the allegations and said the company was “confident that the facts will show how committed we are to the diversity and equal opportunity of the McDonald’s System, including across our franchisees, suppliers and employees.” If true, however, the allegations are stunning, given that African American fast food franchisees and civil rights groups protested these precise forms of discrimination nearly four decades ago.

McDonald’s and other fast-food chains first recruited African American franchisees in the late 1960s and 1970s as suburban markets were becoming increasingly saturated and they sought to expand to inner-city locations, including those in African American neighborhoods. Notably, the federal government, through small-business loan guarantees, urban and rural economic revitalization initiatives, and minority entrepreneurship programs, contributed to the fast-food industry’s move into African American neighborhoods.

As fast-food chains expanded into African American neighborhoods, community and Black Power activists fought for McDonald’s franchises in their neighborhoods to be Black-owned. McDonald’s and other fast-food restaurants agreed to facilitate the sale of franchises to African Americans. While this was a significant development with the potential to boost African American entrepreneurship and keep more Black consumer dollars in African American communities, fast-food companies also outsourced the everyday risks of operating outlets in more challenging locations without offering adequate support, according to Black franchisees.

As Brady Keys, a former NFL defensive back who became the first African American Burger King and Kentucky Fried Chicken franchisee in the late 1960s and early 1970s related to Black Enterprise magazine in 1974: “[Fast-food companies] know that doing business in my area is hell. There’s cutting, shooting, killing. So they say, we really don’t want to do this ourselves, so why don’t we get this black cat over here and franchise him?”

Other African American fast-food franchisees described similar security challenges during an era when rates of violent crime in America’s cities were considerably higher than they are now. According to Max Boas and Steve Chain, authors of the 1976 book “Big Mac: The Unauthorized Story of McDonald’s,” African American franchisees kept firearms in their restaurants and employed security guards “dressed as managers and muscular ‘customers.’ ”

The precise extent to which Black-owned fast-food restaurants were more likely to be sites of criminal activity is not entirely clear, and crime rates in inner-city Black areas stemmed from decades of residential segregation and government-enabled discrimination in housing, education and policing. Nonetheless, African American franchisees seemed to accept extra security-related expenses as part of the costs of the fast-food business until the 1980s.

Ironically, these issues, as well as charges that McDonald’s limited African American franchisees’ expansion opportunities, first received widespread media attention after the company sued an African American franchisee in 1982.

The company alleged that Charles Griffis breached his contract by owning two franchises of competitor Popeyes. (Griffis insisted that the Popeyes franchises at issue belonged to his wife.)

Griffis responded by countersuing McDonald’s for restricting him to “ghetto” locations and barring him from purchasing franchises in White neighborhoods. In 1984, McDonald’s paid Griffis $4.7 million, which the company described as payment for buying back Griffis’s four McDonald’s franchises. Griffis and his lawyers pointed out that the sum far exceeded what the franchises were worth and maintained that McDonald’s paid the sum as a settlement for racial discrimination.

Civil rights organizations also protested what they called “redlining,” a term borrowed from the housing context and used to refer to fast-food companies’ alleged neglect of Black-owned franchises and attempts to keep minority franchisees from owning potentially more lucrative restaurants in White neighborhoods. In 1982, Jesse Jackson’s Operation PUSH, a civil rights organization focused on economic issues, protested that the outlets McDonald’s made available to African American franchisees were older and undesirable, requiring costly investments in maintenance and security. The Los Angeles and Chicago chapters of the NAACP made similar complaints, and even organized boycotts of the chain.

In the years since, charges of fast-food companies saddling African American franchisees with outlets associated with higher expenses and lower sales volume have never completely gone away, but the frustrations of McDonald’s’ Black franchisees now seem to have reached a point not seen since the 1980s. A series of Business Insider investigations published last year found that Black-owned McDonald’s restaurants netted $68,000 less per month than White-owned outlets and that this disparity had been growing since 2012, when the gap was $24,000.

A lawsuit filed in January indicates that at least some African American employees discerned changes in company culture after Steve Easterbrook, the company’s chief brand officer, replaced Don Thompson, McDonald’s’ first African American CEO, in 2015. The lawsuit, filed by two Dallas-based African American senior executives, described a “hostile and abusive work environment” for African American executives and franchisees, and that under Easterbrook, the company “purged” Black executives and diverted advertising dollars away from African American markets. In emailed comments, a company representative denied this claim, noting that the company reduced the number of senior positions overall and stating that African Americans were not targeted in this restructuring. (Easterbrook, who is White, was fired last year over a consensual relationship with an employee that violated company policy.)

Conflicts between African American franchisees and fast-food chains reflect the complicated history between the fast-food industry and African Americans. Fast-food companies have certainly reached out to African American consumers and have worked with Black-owned ad agencies like Burrell Communications (the creator of the “Calvin” campaign) since the 1970s in ways that other industries have not. Yet, their disproportionate advertising to African American and Latino children has also raised alarms among public health advocates concerned about fast-food consumption and health in African American communities. Fast-food workers, who are disproportionately Latino and African American, have also battled with fast-food companies over unionization and the minimum wage (though McDonald’s said last year that it would stop lobbying against minimum-wage efforts), sexual harassment and most recently, health and safety during the coronavirus pandemic.

As the country takes stock of corporations and their treatment of African Americans and other people of color, McDonald’s is not unlike other companies that have embraced Black culture in their marketing campaigns and touted their philanthropic initiatives intended to “uplift” African American communities. Yet, these companies simultaneously face accusations of discrimination from within.

After the killing of George Floyd in Minneapolis, the company expressed solidarity with Black Lives Matter. On June 3, the company tweeted the names of Trayvon Martin, Michael Brown, Alton Sterling, Botham Jean, Atatiana Jefferson, Ahmaud Arbery and Floyd. “They were all one of us,” the tweet continued. “We see them in our customers. We see them in our crew members. We see them in our franchisees.” How McDonald’s responds to its Black franchisees’ new lawsuit will reveal how much the company sees them.