*McDonald’s is settling a lawsuit with former MLB player Herb Washington, a franchisee who accused the company of racial discrimination after they had him operate restaurants in urban neighborhoods.
The global fast-food giant is by buying the remainder of Washington’s shops for $33.5 million, Cleveland.com reports. Per Complex, the suit was filed in the U.S. District Court in Youngstown, and claimed that “Black owners average around $700,000 less in annual sales per store than white owners.”
Washington owned 23 restaurants in 2017 before downsizing to 14 at the time of the suit, per the report.
“The court did not find that the company violated any laws,” McDonald’s said in a statement. “Discrimination has no place at McDonald’s. While we were confident in the strength of our case, this resolution aligns with McDonald’s values and enables us to continue focusing on our commitments to the communities that we serve.”
READ MORE: McDonald’s Launching $250M Initiative to Attract Diverse Franchisees
The settlement comes amid a slew of lawsuits from former Black McDonald’s franchisees accusing McDonald’s of engaging in systemic discrimination.
“During a period of record performance, we must challenge ourselves — even more — to invest in the future,” McDonald’s President and CEO Chris Kempczinski said in a news release, as reported by The Chicago Tribune. “Today’s announcement to attract franchisees who represent the diverse communities we serve is fundamental to that goal and builds on McDonald’s rich history and pride in reflecting those we serve.”
The lawsuit was originally filed by 52 Black former franchisees on Sept. 1, 2020. The claims now include nearly 300 stores with compensatory damages that average between $4 million and $5 million per store, exclusive of punitive damages.
The plaintiffs allege McDonald’s sold itself as a recruiter and developer of Black talent, profited from its Black consumer base and maintained a two-tier system that pigeonholed unsuspecting Black owners and assigned them horrible locations guaranteed to fail.
Washington said when he “stood up for myself and other Black franchisees, McDonald’s began dismantling my life’s work, forcing me to sell one store after another to white operators.”
Meanwhile, amid the slew of discrimination lawsuits, McDonald’s is launching a $250 million, five-year initiative to attract more minority franchisees in the U.S.
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