October 15, 2007 / 7:08 PM / 12 years ago

Dunkin' Donuts sued for discrimination

CHICAGO (Reuters) - An India-born husband and wife whose U.S. franchise agreement with Dunkin’ Donuts is being terminated has accused the restaurant company of racial discrimination, their attorney said on Monday.

The allegations were made in a counterclaim against Dunkin’ Donuts Franchise Restaurants LLC, Baskin-Robbins LLC and related entities, attorney Gerald Marks said in a statement. The counterclaim was filed on behalf of Mahendra Patel and his wife, Nita, their lawyer said. Both are U.S. citizens born in India, the lawyer said, and own four shops in New York state.

The counterclaim charges that Dunkin’ manufactures false and baseless reasons to terminate contracts with primarily “brown skin, first generation American” franchisees or to force them to sell the franchise back to Dunkin’ or a Caucasian multiunit operator for less than the fair market value.

A Dunkin’ Brands spokeswoman said the legal action the company took against the franchisee “is appropriate, and we are confident the court will find in favor of Dunkin’ Donuts.”

“Dunkin’ Donuts restaurants are owned and operated by more than 1,200 independent business men and women, who represent a variety of racial, religious and ethnic backgrounds,” she added. “Dunkin’ Donuts only pursues legal action with respect to franchisees who do not adhere to federal and state laws or fail to meet the obligations as required by their franchise contract.”

She declined to comment further about specifics of the litigation.

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