Franchisees Accuse Dunkin' Donuts Of 'Systematic Racial Discrimination'

Dunkin' Donuts Systematic Racial Discrimination

All Reggie and Amy Pretto wanted was the opportunity to run their own Dunkin' Donuts franchise and be in business for themselves. Instead, the African-American couple claims in a new lawsuit, they were purposely "steered" to less desirable, economically challenged locations, hundreds of miles from their suburban New York City home -- because of their race.

In a complaint filed Monday in New Jersey state court, the Prettos accuse corporate parent Dunkin' Brands of lying and deceiving them into believing that there were no franchise opportunities in New York state or New Jersey, near their Westchester County home, and were instead "steered" to less favorable areas in Maryland, which ultimately failed, the New York Post reports.

And the move cost them dearly, the couple says. The failed Maryland stores cost the Prettos $750,000, and their home, which they sold in 2004 to finance the franchise purchase.

In the lawsuit, the Prettos allege that as they were being persuaded to invest in the Maryland stores, Dunkin' gave white investors the opportunity of multi-unit franchise agreements in the more lucrative New York/New Jersey region.

Reggie Pretto, a Dunkin' employee before he became a franchisee, told the Post that he walked into the business with eyes wide open but was still stunned by the company's actions.

"They can be very brutal," he told the tabloid.

More: Top 10 Soft Skills For Job Hunters

The suit also charges that Dunkin' has history of discriminating against minority franchisees, noting that Dunkin' has no units in New York, Connecticut or Rhode Island owned by African-Americans, despite the company having a significant presence there. The complaint also alleges that Dunkin' gives white franchise developers prime locations for doughnut shops, while minorities are left with "economically disadvantaged or marginal areas."

Of the nearly 7,000 stores that Dunkin' has nationwide, just 50 shops are owned by African-Americans -- and those establishments are primarily situated in poorer areas. The suit charges Dunkin' Donuts with "systematic racial discrimination," particularly against Indian women of color and African Americans.

Through a spokeswoman, Dunkin' Donuts declined an opportunity to respond, saying, "We are unable to comment due to pending litigation."

Another former franchisee, Priti Shetty, is also listed as plaintiff in the lawsuit. As AOL Jobs reported in May, Shetty alleges that Dunkin' Brands is biased against "Asian-Indian American women of color."

Shetty, who owned two Dunkin' Donuts stores in New Jersey, alleges that a Dunkin' Brands manager, Wayne Miller, forced her to keep her stores open 24 hours a day, despite concerns that Shetty had about safety and profitability, and denied her the ability to open a third store.

More: Top 10 Jobs Of The 21st Century

Further, she claims, Miller told her that she wasn't "servile enough" as an Indian woman and regularly made derogatory remarks, telling Shetty, for example: "This business is not for [you]."

The Prettos and Shetty aren't the first Dunkin' franchisees to allege that the Canton, Mass.-based company discriminates against franchisees of color.

In 2007, Mahendra and Nita Patel, husband-and-wife operators of four Orange County, N.Y., Dunkin' outlets, countersued the chain after the company alleged that the couple violated franchise agreements, and labor and tax laws.

The Patels, first-generation Americans of Indian descent, alleged in their suit that the company unfairly terminates minority franchisees or forces them to sell their stores at less-than-fair market value to white, multi-unit operators.

Dunkin' has a lengthy history of legal wrangling with its owner-operators. BusinessWeek reported in 2009 that Dunkin' was involved in about 350 lawsuits with its franchisees, noting that the company has been accused of aggressively targeting shop owners in an effort to terminate franchise agreements and, in the process, collect hefty fees and penalties for alleged contract violations.

Don't Miss: Companies Hiring Now

More From AOL Jobs

Looking for a job? Click here to get started.

Add a Comment

*0 / 3000 Character Maximum


Filter by:

I thought Obama was going to end all racism in America. . .

September 02 2012 at 2:58 PM Report abuse rate up rate down Reply

They even put the plain and chocolate donuts in separate bins!

August 21 2012 at 1:19 PM Report abuse +1 rate up rate down Reply

lame excuse

August 21 2012 at 11:29 AM Report abuse +2 rate up rate down Reply

Just get a job. Get off the racism crap. Haven't you people sucked that well dry yet?

Geez.. racism used to exist because of ignorance and hate... it know exists for profit and greed.

Take Sharpton and Jackson... neither who ever held a real job...made a good living off racism.

Neither could qualify with skills to cashier at a 7/11 in reality. It's stale and it smells.

August 21 2012 at 2:45 AM Report abuse +3 rate up rate down Reply

dunkin donuts discriminates against minorities? in new jersey practically every franchise is owned and staffed by
indians or pakistanis.

August 21 2012 at 2:22 AM Report abuse +3 rate up rate down Reply

I now why they think D.D is raceist.
what happened to me at D.D, the cashier said , what are you looking at!!! then said some other things. And after that it left me running out of D.D crying. And im only 11 thin aboutt how much tthat hurt my feelings.

August 21 2012 at 2:09 AM Report abuse rate up rate down Reply

For the cost of opening just one franchise under a corportate name I could open three independent doughnut shops and run them on my own terms according to what my local customers want.. not what some corporate home office thousands of miles away wants.. and would do just fine on my own. And have you ever seen how much royalty payment franchise owners have to send up to the mother ship before the local franchise profits even one cent? It would rattle your senses. These companies are not in business to make money for their local owners.. they are in business to make money for themselves.. and only themselves.

August 21 2012 at 1:55 AM Report abuse +1 rate up rate down Reply

I have seen many African-Americans working at Dunkin Donuts stores, but I couldn't tell you who the owners are. This is in Upstate NY, and Southwest Florida. I also believe I have seen only one store that had an Indian man for a manager; I don't know if he was the owner. These people may have a valid point.

August 21 2012 at 1:49 AM Report abuse rate up rate down Reply

Apparently they didn't look at the Atlanta Metro area, because there is significant diversity in the folks who operate stores here. Of course maybe they aren't owner/operators, but I suspect most are because the quickest way to run a business into the ground is if the owner believes in absentee management. If you own a business you need to be there most of the time with an active role in the operations and management of any business.

August 21 2012 at 12:26 AM Report abuse +2 rate up rate down Reply

Discriminating against Indian women of color too? Thats Preti Shetty.

August 21 2012 at 12:10 AM Report abuse +1 rate up rate down Reply

Search Articles

Picks From the Web