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McDonald’s pledges $250M to new franchise owners to help increase diversity


McDonald’s pledges $250M to new franchise owners to help increase diversity

McDonald’s said Wednesday it is launching an initiative to recruit new franchise owners from underrepresented communities and will offer millions in financing to help those who struggle to get funding.

The fast-food giant says it will dedicate $250 million over five years to help potential franchisees in the U.S. who have difficulty getting funding from other sources to buy a McDonald’s restaurant.

McDonald’s, which has been accused of racial discrimination by dozens of Black former and current franchise owners in the last two years, says the global initiative is part of a broader effort to make its leadership and supplier network more inclusive and to ensure its franchisees reflect the communities in which they operate.

“Upfront entry costs are a barrier to entry for many entrepreneurs who may have limited access to capital,” Chris Kempczinski, McDonald’s President and CEO, said in a message to employees that was viewed by USA TODAY. “This barrier may be particularly felt by candidates from different backgrounds, including from historically underrepresented groups. To address the issue, we will seek to reduce upfront equity requirements for eligible franchisee candidates.”

The company says it will reach out to community-based organizations and other groups to identify potential restaurant owners and provide training and support for new franchisees.

“This will help new franchisees get off to a strong start, and give all franchisees an equal opportunity to grow,” Kempczinski said, adding that development programs will be expanded to all restaurant owners.

McDonald’s has announced various diversity goals and measures amid numerous allegations of racial discrimination by Black franchise owners and employees.

In September 2020, 52 Black former McDonald’s franchisees sued the fast-food giant, alleging they faced racial discrimination that included being steered to restaurants with lower profit potential and being denied the same financial support as their white peers.

And last fall, three current and former McDonald’s employees filed a…

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