McDonald's has agreed to a $33.5 million settlement to end a lawsuit brought forward by former MLB player and McDonald's franchise owner, Herb Washington.

Washington sued the fast-food giant in February alleging that the company favored white franchise owners over Black owners. His complaint alleges that because of these discriminatory practices, there was at least a $700,000 pay gap between the white owners and the Black owners.

As part of the settlement, Washington will no longer be a franchise owner, and McDonald's agreed that it would pay Washington for the 13 stores he owned throughout Ohio and Pennsylvania “no more than what we deem a fair price for the value of the restaurants.” At the height of his business dealings with McDonald's, Washington owned 23 stores throughout Ohio and Pennsylvania.

Following the settlement, McDonald's released a statement detailing that it had not violated any laws. “While we were confident in the strength of our case, this resolution aligns with McDonald’s values and enables us to continue focusing on our commitments to the communities that we serve.” The company insisted that “discrimination has no place at McDonald’s.”

Washington’s lawsuit, which was filed in U.S. District Court in Youngstown, detailed claims that McDonald's gave White owners store locations that were in affluent areas where the cost of operation and maintenance was significantly lower than poor urban areas where Black owners were directed.

​​“By relegating Black owners to the oldest stores in the toughest neighborhoods, McDonald’s ensured that Black franchisees would never achieve the levels of success that White franchisees could expect,” the lawsuit read. “Black franchisees must spend more to operate their stores while White franchisees get to realize the full benefit of their labors.”

His suit details that over the past twenty years, franchise ownership by Black operators has been on the decline by at least 50%. In 1998, there were 377 Black franchise owners. Today, there are a little over 180. As the number of Black owners decreases, the number of franchised restaurants has doubled.

Washington’s lawsuit also painted claims that the company was targeting him because of the awareness he was bringing to the discrimination against Black owners. In a video press conference he did after announcing the lawsuit, Washington explained, “McDonald’s has targeted me for extinction. The arches are in full-scale retaliation mode against me.”

McDonald’s vehemently pushed back against Washington's claims of racial discrimination.

“These allegations fly in the face of everything we stand for as an organization and as a partner to communities and small business owners around the world. Not only do we categorically deny the allegations that these franchisees were unable to succeed because of any form of discrimination by McDonald’s, we are confident that the facts will show how committed we are to the diversity and equal opportunity of the McDonald’s System, including across our franchisees, suppliers and employees,” McDonald's defended. Instead, the company insisted that Washington's low-performing stores were due to poor management.

Washington's claims are similar to other lawsuits brought by 52 other Black McDonald's franchise owners in September 2020. The Black owners who brought forward litigation against the company own roughly around 200 stores throughout the nation. Their allegations blame the company for forcing them to sell their stores by showing them misleading financial information or requiring them to make quick decisions about different store availability that were often located in poor, urban cities. Through the company’s practices, these Black franchise owners allege that they were steered toward inner-city neighborhoods that had higher costs yet saw lower volume of sales.

This latest settlement comes one week after McDonald's settled a similar complaint brought forward by two Black franchise operators in Tennessee, brothers James and Daryl Byrd. The brothers detailed claims that McDonald's gave preferential treatment to white operators. The pair were seeking $5 million per store, and McDonald's agreed to purchase their four locations for $6.5 million. Much like Washington, the Byrds agreed to leave the company as well.

The string of racial discrimination allegations has prompted McDonald's to announce its commitment to recruiting and training more diverse operators throughout the globe. The company also said that it would commit $250 million over the course of five years to help underrepresented groups secure financial loans.