Black franchisee suing McDonald's says "systemic racism" has prevailed at the company

The Black owner of more than a dozen McDonald's franchises accused the company of fostering an environment of "systemic racism" by not allowing him to buy additional locations of the fast-food chain in more affluent communities. 

Former professional baseball player Herbert Washington filed a federal civil rights lawsuit against McDonald's in Ohio on Tuesday. He alleged discrimination, claiming that the company steered Black owners into low-income neighborhoods that required more upkeep and were less profitable.

McDonald's denied the allegations, telling CBS MoneyWatch in a statement that Washington was "facing business challenges" and the company had "invested significantly in his organization" while granting him numerous chances over the years to address the issues. 

"This situation is the result of years of mismanagement by Mr. Washington, whose organization has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment," the company said. 

Washington told CBSN anchor Lana Zak on Thursday that the company's response did not address his claim of racism. 

"McDonald's did not address the two-tier system that they have, whereby Black owner-operators in the McDonald's system, our sales are lower than our white counterparts, our profits are lower than our white counterparts. We, over a period of time, were directed to lower-volume locations that were more difficult to address. The problem at McDonald's is systemic racism that has prevailed since the beginning."

"What became abundantly apparent is that Black owner-operators were directed and relegated to the inner cities where the cost of doing business was considerably higher than our white counterparts," Washington said. "As an example, in the inner cities oftentimes you have to have security. Security is a tremendous cost ... My white counterpart didn't have to spend $20 an hour for a security guard. In some cases, Black owners have had to have security from the time they open to the time that they close." 

The allegation against McDonald's is not a new one. In 1984, the chain was accused by another Black franchisee in Los Angeles of keeping Black owners from buying locations in white neighborhoods. 

More than 50 former Black franchise owners made similar allegations in an October lawsuit, claiming that they were forced to sell about 200 locations in the last decade. Washington said he was forced to sell seven stores to white owners in the past few years. At one point he owned 27 locations, he said; he now owns 14 — 12 in Ohio and two in Pennsylvania.