Owning a franchise of a lucrative business can be financially positive for franchisees. However, this type of endeavor is not a sure thing, and in some cases, franchises may not do as well as hoped. Though certain details are out of their control, some franchisees may feel as if the company acted inappropriately and set them up to fail. In fact, some may consider it an act of discrimination.
Minnesota readers may be interested in a business dispute involving McDonald’s and 52 former franchisees. The former franchisees, who are all Black, claim that McDonald’s discriminated against them by placing their restaurant franchises in high-crime locations that faced economic difficulties, which made it challenging for the franchisees to earn a profit. Due to the questionable nature of the locations, owners had to pay higher operating costs and had lower sales.
In fact, the former franchisees claim that they earned $900,000 less in 2019 than the nationwide average for McDonald’s franchises. Additionally, the parties claim that McDonald’s took retaliatory action against franchisees who refused to have their restaurants in high-crime areas, though specific examples of such retaliation were not provided in the report. McDonald’s has denied all allegations and stated that the company is committed to diversity.
Facing litigation over claims of discrimination and other issues can lead to complications for any business. When such situations arise, as they often due, it is important for business owners to understand their options for defending against such claims. If Minnesota business owners are facing similar claims, they may want to look into their available legal options so that they can plan ahead.