Judge finds evidence Culver’s discriminated against franchisee

A federal judge has denied burger and frozen custard chain Culver’s motion to throw out a case brought by a franchisee, holding that there is sufficient evidence of intentional discrimination that the case should proceed to trial. Michael Wilbern, one of Culver’s first African-American franchisees, alleges in the lawsuit that the chain stopped him from opening stores in majority African-American neighborhoods and impeded his ability to operate the store Culver’s did let him open in a mostly white suburb.

Wilbern contends that from 2003 to 2012 he repeatedly tried to open a Culver’s on Chicago’s predominantly black South Side. Wilbern charges Culver’s “denied those locations every time” even though local officials offered him tax breaks to open there. Instead, Wilbern claims, Culver’s steered him to a site in suburban Franklin Park.

Wilbern charges that the “overwhelming majority” of Culver’s restaurants are located in areas where African Americans are in the minority.

The Chicago Tribune explains:

Wilbern, who previously managed a dozen KFC restaurants in Wisconsin, went along with that offer because he wanted to build a relationship with Culver’s, the suit says. But the location failed because he was encouraged by Culver’s to pay higher than market-rate rent for a lease on the restaurant, he says.

Culver’s also allowed two other franchisees to “cannibalize” Wilbern’s sales by opening Culver’s restaurants in [nearby] Rosemont and Lyons, and refusing him permission to increase prices to cover the lease, contrary to its usual practice. One of the franchisees — a white man — took over the Franklin Park restaurant when Wilbern was forced into bankruptcy, the suit says.

Franchisees face enough challenges staying in business. Do you believe your franchisor has discriminated against you or other franchisees in your system? Share your story.