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Dunkin' Donuts Accused Of Bias By Ex-Franchisees

This article is more than 10 years old.

Dunkin' Donuts steered a black couple away from lucrative franchise locations toward less profitable minority areas and discriminated against an Indian-American woman, ultimately contributing to the failures of their businesses, according to a lawsuit filed this week.

Reggie and Amy Pretto, a black couple from Montclair, claim that Dunkin' Donuts lied to them in 2004 when it told them there were no locations available in the New York metropolitan area. Instead, they claim, they were steered to less profitable minority areas in Maryland based on false company reports and inaccurate revenue projections.

The couple on Monday joined a lawsuit that was filed in state Superior Court in New Brunswick in May by Priti Shetty. Shetty, of Montville, claims she was repeatedly harassed as a woman of Indian descent by a Dunkin' Donuts district manager, says company officials prevented her from opening in northern New Jersey a third store that was later assigned to a white male franchisee and claims she was blocked from returning to the franchisee fold once she had sold her stores.

"As far as Indian American women and African-Americans, female or male, are concerned, Dunkin's slogan should be `Dunkin Runs on Discrimination' rather than `America Runs on Dunkin'," the lawsuit said.

A spokeswoman for Dunkin' Donuts said the company, which is based in Canton, Mass., and serves 52 varieties of doughnuts and more than a dozen coffee drinks, values the diversity of its franchisee ranks. The company, a subsidiary of Dunkin' Brands Inc., estimates that more than 90 percent of new store growth in the U.S. comes from existing franchisees, spokeswoman Michelle King said.

"Our franchisee diversity and our franchisee relationships are a source of pride for us and a strength within our system," King said.

Shetty and the Prettos, besides monetary damages, want Dunkin' Donuts to institute additional anti-discrimination policies, their attorney Louis Tambaro said.

"There's certainly no discrimination against green money, but there are discrimination issues against African-Americans and Indian women of color," Tambaro said.

The Prettos are seeking damages including the $750,000 they say they lost before declaring bankruptcy when their franchises failed. The lawsuit claims there are only 50 African-American owners among the company's nearly 7,000 franchisees and many of those 50 are in economically undesirable areas.

Indians own several of the largest Dunkin' Donuts franchises in the New York metropolitan area. Shetty's claim doesn't address how many Indian-American franchisees there are in Dunkin' Donuts, but it says as a woman her treatment differed from those of other franchisees. Shetty claims she was barred in bad faith by Dunkin' Donuts from regaining control of her New Jersey franchises after she had sold them to a franchisee who failed. Shetty, whose name was on both leases, is being sued by both landlords for rent arrears, according to court papers.

This program aired on August 22, 2012. The audio for this program is not available.


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