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Black Connect
by on December 10, 2019
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Black McDonald’s franchisees are at a systematic disadvantage.Larry Tripplett, the head of McDonald's black franchisee group, the National Black McDonald's Owners Association (NBMOA), said in an internal letter earlier this year that "the trajectory of the treatment of African American Owners is moving backwards.”

 

Black franchisees make hundreds of thousands of dollars less a year, on average, than their white counterparts.  Surviving as a franchisee has become increasingly difficult for all but the ultrawealthy.

 

McDonald's black franchisees told Business Insider they're limited to owning stores in areas where sales are lower and costs are higher.

 

The cash flow gap is growing.  This disparity has been getting worse. Black franchisees say their stores now net $68,000 less a month, on average, than McDonald's overall franchisee average. That disparity has more than doubled in recent years.

 

As the disparity grows, black franchisees are cutting ties with McDonald's. At the end of 2008, there were 304 black McDonald's franchisees, according to NBMOA documents. By the end of 2017, NBMOA documents showed that number had dropped to 222. Today, two franchisees said, black franchisees make up fewer than 200 of the roughly 1,700 franchisees at McDonald’s.

 

This is not the first time McDonald’s has been called out for racial discrimination.  Back in 1984, Charles Griffis filed a racial-discrimination suit against the fast-food giant, alleging that he and other black franchisees were systematically kept from buying stores in white neighborhoods and were restricted to poor, predominantly black areas.

 

Ken Manning, a black former McDonald's franchisee, started working at a McDonald's location four decades ago, making $1.65 an hour. He became a franchisee in 2001, when, he said, more McDonald's locations were available for black franchisees to buy thanks to a handshake parity deal between McDonald's and the NBMOA in the late 1990s. Eventually, Manning owned 16 locations. Yet, he says, the disparity between black and white franchisees was a constant.  "The cash-flow numbers don't lie,” said Manning.

 

Some franchisees say they're concerned about the decline in the number of black people in corporate leadership.

 

While many factors played into the decline in black franchisees, it did not escape franchisees' notice that the change came after Don Thompson, McDonald's first black CEO, was replaced by Easterbrook in 2015.

 

"The current state of affairs for African American Owners can only be described as hostile," Tripplett wrote. "We are very concerned that we see no one that looks like us in senior management at McDonald’s.”

 

pastedGraphic.pngTripplett said in a statement. "Our goal is to ensure that McDonald's Corporation (McDonald's) is fully and authentically engaged in the African American experience — including African American communities, employees, vendors and franchisees.”

 

McDonald's gross profit for 2018 was $10.786B, a 1.56% increase from 2017

 

If you are a McDonald's employee or franchisee with a related story to share, reach out at oharden@blackconnect.com or on Black Connect @oharden   on the phone at (813) 405-5918 — no PR pitches, please.