Sebastian Lentini, 82, has been a McDonald’s franchisee for 50 years.
He operates six locations in northern New Jersey: Passaic, Paterson, Fair Lawn, Paramus, Jersey City and Bayonne. Three generations of the family are involved in the business, he said.
But McDonald’s wants him out, according to a lawsuit brought by Lentini in Hudson County Superior Court.
The suit alleges “a systematic pattern of discrimination targeting [Lentini] for no reason other than his age,” and claims that McDonald’s has “a broader policy aimed at pushing out older, long-term franchisees.”
The suit also claims McDonald’s overcharges franchisees by forcing them to purchase items related to rebuilds and renovations at inflated prices, worthy of RICO charges, the suit said.
McDonald’s said each allegation is “false and unfounded,” and it will “continue to vigorously defend itself in this matter.”
The company filed a motion to dismiss, which is still pending.
Inside the allegations
The suit alleges multiple instances of age discrimination and that McDonald’s arbitrarily decided Lentini was deemed “ineligible to expand,” which the suit said undermines his entire business.
It cites a 2016 meeting in which one corporate employee told Lentini’s son that his father “‘is an old man,’ that ‘he should step aside and pass along his P1 status,’ and that Lentini was no longer McDonald’s operator of choice for the region because of his age.”
Another employee “repeatedly stated Lentini `must be tired,’ an obvious reference to her, and McDonald’s, improper and discriminatory belief that Lentini’s age would cause him to be tired or otherwise unfit to run his franchises,” the suit said.
The suit also charges the company is “squeezing out” Lentini by intentionally opening and developing new restaurants in the immediate vicinity of Lentini’s stores.
“McDonald’s refused to provide Lentini with an opportunity to operate those locations in close vicinity to his location based solely on Lentini’s age – and not on his operational abilities or expertise,” the suit said.
The suit said McDonald’s is trying to force out older franchisees by requiring expensive upgrades that won’t translate into greater profit for the stores. It said younger, less experienced franchisees are more “naive” and unlikely to fight the corporation over costly remodels.
The RICO allegations
The two sides clashed about renovating and/or modernizing Lentini’s existing restaurants, the suit said, alleging the upgrades would have cost millions of dollars that would take significant time to recoup, if the costs could be recouped at all.
In one example, the suit said, McDonald’s wanted Lentini to make changes to his Bayonne store. The renovations would have cost nearly $3.5 million while reducing dining room seating from 150 to 46 seats and parking stalls from 34 to 13. It also would have eliminated a play area for children. Lentini was not included in the plans for his own restaurant, the suit said.
The suit also alleged the cost of construction was in excess of market prices, citing an Open Public Records Act (OPRA) request that showed the cost of construction, as evidenced on permits, was $832,000, yet Lentini was being charged more than four times that amount.
All that added up to several RICO charges in the lawsuit, claiming a “Fraudulent Scheme to Sell Essential Goods at Inflated Prices.”
McDonald’s motion to dismiss is still pending, and the case is expected to be heard in the spring of 2020.