African American Franchisees Sue Dunkin Donuts For Discrimination

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America’s favorite doughnut and coffee shop, Dunkin Donuts, is currently under fire with its African American franchise owners. The mega doughnut and coffee chain was served lawsuit papers by its African American and other ethnic franchisees this week. The lawsuit alleges that the franchise has been trying to keep black franchisees pushed into areas of the country that are poor and less desirable, which generates less profit. Despite having 7,000 locations, only 50 are owned by African Americans.

Franchising the Dunkin Donuts brand is not cheap. The investment ranges from half a million dollars to over a million dollars, based on location. On the franchise’s website there’s a picture of an African American woman laughing with a young African American boy. Next to the photo is a testimony from the woman, named Dorothy, of Baltimore, MD. “Dunkin Donuts is a place my entire family can enjoy together,” it reads.

The website also lists the requirements that prospective franchisees must meet prior to being approved to open a Dunkin Donuts. The requirements are: 1. Nurtures a passion for, and dedication to, operational excellence, 2. Maintains adequate resources and capitalization to purchase a development opportunity for one or more Dunkin’ Donuts restaurants, 3. The minimum resource requirements for a single unit development commitment include liquid assets of $250K and a net worth of $500K – Development minimums vary by market, 4. Cultivates an understanding and a drive for local store marketing and community involvement, 5. Possesses a clear understanding of the real estate development process -particularly as it relates to local markets, 6. Has prior management level experience in food service and/or restaurant operations  (Other relevant will be considered), and 7. Demonstrates the ability to build a high performing team and organization.

The chair and associate professor at Langston University, Matthew Lynch, Ed.D., encourages prospective African American franchisees to adhere to the following steps when considering a franchise investment:

• Do a lot of research first. Check out the area for yourself. Stop in other businesses and speak to the owner to see what their thoughts are on the area’s business climate.
• Get some hard fast figures on what you can expect the store to earn, and try to speak with some other minority franchisees, so you can get some first-hand feedback on how things are going for them.
• Don’t just settle for what you are handed either if you feel pushed into a particular area, question why that is. There’s usually a reason why someone would be pushed into an area, because opening in profitable areas doesn’t usually need any convincing.
• Reach out to groups that can help if you feel you need it. There are small business groups, as well as black franchise ones, that can also take a look to see if you are headed in the right direction.