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Tuesday, June 18, 2024

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Our view of McDonald’s troubled racial history in Tennessee

by James F. Byrd Jr. and Darrell Byrd —

Black History Month reminds us that we all must do our best to address lingering racial inequities. One organization that has a lot of soul searching to do is the McDonald’s Corporation. The burger giant has a checkered history with its Black restaurant operators and nowhere is the problem more pronounced than throughout Tennessee.

The company loves to position itself as an advocate of the Black entrepreneur, but as longtime McDonald’s franchisees, we know it operates a two-tiered system: one for Whites, one for Blacks.

McDonald’s is now paying the price in the form of several major lawsuits filed by Black employees, senior executives and current and former franchisees. We are the lead plaintiffs for the current franchisees having filed a federal class action discrimination lawsuit on October 29, 2020. 

Together, as brothers, we own and operate four restaurants throughout the state, down from a high of more than a dozen (14). The McDonald’s Nashville Region has the unfortunate distinction of having the nation’s highest cash flow disparity ($134,000 per store) between White and Black franchisees. I, James F. Byrd Jr., am the only one remaining Black franchisee in all of Memphis, a town nearly 65 percent Black. 

In 1998, there were nearly four hundred Black franchisees in the United States. Now only 186 remain. 

Although we risk retaliation and perhaps any chance of saving our remaining restaurants by bringing forth this lawsuit, we believe we cannot remain on the sidelines while McDonald’s continues to marginalize its remaining Black operators.

To outsiders, owning a McDonald’s might seem like a ticket to the upper class. For the White operators, this is generally true, but for most Black current and former franchisees the lure of the Golden Arches was – and is – an illusion.

For years, we believed that each owner, Black and White, succeeded or failed according to their effort and commitment. We were disabused of this pollyannish notion in January 2020 when two McDonald’s senior executives came forward with troubling details about how McDonald’s routinely pushes Black franchisees out of the system.  

All of this occurred as McDonald’s did its best to position itself as a friend of the Black consumer, signing on rappers to endorse specialty meals and cutting checks to Black charitable organizations.  

By forcing us in predominantly Black neighborhoods, low volume suburban, gas-station-alliances and Walmarts, McDonald’s increased its footprint through the acquisition of real estate in areas with lower prices and boosted sales to Black consumers resulting in higher company profits. These are locations where White franchisees refused to do business. 

At no time did the company consider our profit margin. If we were paying our rent, fees and were current with our vendors, McDonald’s could care less if we were making a dollar profit.   

We don’t own the stores, but we are responsible for all related occupancy costs including renovations, real estate taxes and/or rebuilds despite the fact these locations historically underperformed. And when Black franchisees are inevitably unable to pay McDonald’s exorbitant rent and fees, they lose all power. If McDonald’s decides it wants them out, the company retains the property with all improvements paid for by the franchisee.

America is once again facing a moment of racial reckoning and perhaps the current environment will inspire McDonald’s to look in the mirror and make things right. This may be too much to ask because the company has refused to change. Twenty-plus years ago, a top McDonald’s executive admitted the “company has placed many Black Franchisees in restaurants that have not allowed them to achieve the same level of economic success as their peers.”

The two of us know this to be true. Black History Month is the right time for McDonald’s to join the rest of the nation in reconciling its racist past.

(James Byrd has been a McDonald’s franchisee for 31 years and currently operates two stores from a high of ten. His brother, Darrell Byrd, has been a McDonald’s franchisee for 22 years and currently operates two stores, down from a high of four.)

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