August 21, 2012 / 8:07 PM / 5 years ago

Dunkin' accused of racial bias by ex-franchise owners

(Reuters) - Shares of Dunkin’ Brands Group Inc (DNKN.O) fell as much as 5 percent a day after three former franchisees filed a lawsuit against the company, accusing the doughnut and coffee seller of “systematic racial discrimination” against African Americans and Asian Indian women.

Plaintiffs Amy Pretto and Reggie Pretto, who are African American, filed suit in New Jersey Superior Court Monday, claiming they were “steered” by Dunkin away from their home in the New York/New Jersey area to open stores in less economically favorable areas in Maryland, where stores ultimately failed financially.

The other plaintiff, an Indian-American named Priti Shetty, faced harassment by Dunkin’s operations managers because of her gender and was prevented from opening a third store in Stockholm, New Jersey, the complaint said.

The suit seeks an unspecified amount of monetary damages, and asks a judge to stop Dunkin’ Donuts from discriminating against African Americans and other minority franchise owners and to put in place incentives for minority franchisees.

“While we cannot comment on pending litigation, our franchisee diversity and our franchisee relationships are a source of pride for us and a strength within our system,” Dunkin’ spokesperson Michelle King wrote in an email to Reuters.

Shares of the Canton, Massachusetts-based company, which also owns the Baskin-Robbins ice cream brand, ended regular trading down 2.6 percent at $29.54, after falling as low as $28.71.

Reporting by Nivedita Bhattacharjee in Chicago; Editing by Steve Orlofsky

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