Black Operators Sue Burger King

Posted: October 19, 1988

The Burger King Corp. declined comment yesterday on a $500 million discrimination suit filed against the fast-food company by a dozen black franchise owners, but it defended its much publicized minority-improvement program.

A class-action suit filed Monday in U.S. District Court in Washington contends that black owners were charged up to twice the amount charged whites to purchase franchises and were deceived into accepting inferior locations for their restaurants.

The suit, filed by 10 current and two former Burger King franchise owners in cities that include Philadelphia, Baltimore, Washington, Fairfax, Va., and Fredericksburg, Va., also contends that Burger King forced some blacks out of business by acting "maliciously, deliberately and anti-competitively" over the last eight years.

Leroy Kelly and his sister Dorothy Allen, who operate two Burger King franchises in Philadelphia, are among the plaintiffs. Kelly, contacted at his restaurant at 619 N. Broad St., declined comment on the suit. Allen could not be reached for comment, but Russell Frisby of Baltimore, an attorney for the plaintiffs, said Allen's store is at 3130 W. Cheltenham Ave.

The lawsuit was filed by the Minority Business Enterprise Legal Defense and Education Fund of Washington.

Doug Timberlake, a spokesman for Burger King at its Miami headquarsaid yesterday that company officials had seen the lawsuit but had yet to ''digest" it and would have no comment now.

Burger King, owned by Pillsbury Corp. of Minneapolis, has been involved in a public effort to increase minority involvement in its operations, and Timberlake defended those efforts.

Five years ago, Burger King signed a voluntary agreement with Operation PUSH, the Chicago-based civil rights advocacy group headed by the Rev. Jesse Jackson, to increase minority participation in the company.

Burger King officials say the company's black-owned franchises have increased from 2.4 percent out of a total of 3,230 restaurants five years ago to 3.8 percent of 5,055 so far in 1988.

In addition, Burger King has placed more advertisements with black agencies and increased contracts with minority-owned suppliers, said Timberlake.

"By and large, it's been pretty successful," said Timberlake. "People on the PUSH side of the covenant are very pleased with it."

The Rev. Willie Barrow, national executive director for PUSH, told the Washington Post: "This is probably the best covenant we've had."

The plaintiffs allege that Burger King denied them better restaurant locations and charged them more than twice as much as whites paid for franchises and equipment.

For example, William and Melinda Stephens, who are black, bought a Burger King outlet in Media for $500,000 in 1985, only to discover that the purchase price of the store for a white owner would have been $200,000, according to the lawsuit.

Further, after the purchase was completed, Burger King opened two new outlets within two miles of the Stephenses' franchise, the lawsuit said. The new outlets hired away the Stephenses' white workers, in violation of company policy, according to the suit.

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