JOE TOWNS, JR. STATE REPRESENTATIVE
425 FIFTH AVENUE NORTH CORDELL HULL BUILDING, SUITE 416 NASHVILLE, TENNESSEE 37243-0184 (615) 741-2189
House of Representatives State of Tennessee
Nashville
COMMITTEE MEMBERSHIP
CONSUMER & HUMAN RESOURCES JUDICIARY TRANSPORTATION
4528 ST. HONORE MEMPHIS, TENNESSEE 38116 (901) 332-7009
October 22, 2020
Honorable David H. Lillard Tennessee State Treasurer 1st Floor State Capitol Nashville, Tennessee 37243
Dear Treasurer Lillard:
I am in receipt of an official lawsuit document, filed against the McDonald’s Corporation by the Ferraro Law Firm. The complaint was filed August 31st, 2020. In its filing, the action alleges a primary count of racial discrimination based on 42 U.S.C.,1981. It also catalogs that McDonald’s alleged horrendous actions have been occurring for several decades at the expense of Black franchise owners.
Personally, I have known several African American franchisees extending back to the 1980’s. And I would hear complaints then about the disparaging treatment of minority operators and it was as if McDonald was operating with impunity. Certainly, this is unfortunate for an international brand to conduct business in this manner, especially when hundred’s (100’s) of billions of dollars have been generated because of Black American patronage.
The federal lawsuit was filed by fifty-two (52) former Black franchisees of McDonald’s. After reading many of the accounts, I found them to be extremely troubling then I later discovered, that the Tennessee Treasury Department is currently holding approximately eighty (80) million of McDonald’s stock. Obviously, this gave me pause for great concern.
Certainly, I believe that the good people of Tennessee believe in fairness and doing good business as it relates to women and minorities. They would be appalled at the allegations against McDonald’s, a world renown brand.
SERVING THE 84TH LEGISLATIVE DISTRICT
Certainly, you would expect for them to have their corporate act together as to how to conduct fair and equitable business in all communities.
Since it appears this is not the case and fair business practices are not the order of the day, Tennesseans ought not be complicit, aligned with or financially support any company that discriminated against African Americans or anyone.
I believe that this is a moment where Tennessee needs to take a stand for racial justice and reconsider our state’s investment in the McDonald’s Corporation. We would like to see funds invested in McDonald’s, to be divested and smartly placed in other corporations that are practicing good corporate citizenship.
Of the fifty-two (52) plaintiffs at least two are from Tennessee. One is from Nashville and he owned a franchise until he was forced out by McDonald’s. Initially, all of the Black franchise owners thought their affiliation with the McDonald’s was a dream come true. However, the complaint reveals, their dreams quickly morphed into a nightmare.
The irony is that McDonald’s has endeavored to create an image of being a friend of the Black business man, yet the facts uncover a drastically different story. The lawsuit states that at one time McDonald’s boasted of having three hundred seventy-seven (377) Black franchise owners in 1998 out of fifteen thousand eighty-six total (15,086) stores. Currently this number has dwindled to one hundred eighty-six (186) Black franchise owners today, out of thirty-eight thousand, nine hundred ninety-nine (38,999) total stores. Under either scenario the Black ownership numbers are dismal at best and are nothing to rave about.
Per, National Black McDonald’s Operators Association 2020, 2nd Quarter Board Meeting Data Overview, as of March 31st, 2020, the Nashville Field Office has the highest cash flow gap of any store in the McDonald’s system and of course it is a minority store. With a one hundred thirty-four thousand (134,000) difference to be exact!
Black franchise owners were routinely assigned the worst stores, in the roughest neighborhoods, they were also forced to pay for security and renovations, out of their own pockets. Additionally, research has revealed that McDonald’s has created a two- track system, one for White Owners and a lessor one for Black Owners. This is blatantly unfair and wrong. Yet, this is a page from an old racial paradigm of conducting business with Black People.
SERVING THE 84TH LEGISLATIVE DISTRICT
Sadly, McDonald’s has a well-documented history of racial discrimination, therefore they have a tremendous amount of rectifying to do. As well, the State of Tennessee should not aid in any way as they discriminate against minority owners.
As this is an extremely serious matter, I would appreciate your timely response, of course after you’ve transacted your proper due diligence.
Thanks in advance for your indulgence. Respectfully,
Joe Towns, Jr. State Representative
cc: Tennessee Black Caucus Tennessee Governor Bill Lee Marc Morial, President & CEO National Urban League (NUL) Derrick Johnson, President & CEO NAACP Anthony Romero, Executive Director ACLU Rev. Jesse L. Jackson, Sr., Founder & President Rainbow PUSH Coalition Rev. Al Sharpton, Founder & President National Action Network (NAN)
SERVING THE 84TH LEGISLATIVE DISTRICT