Black Franchisees Say Chicken Chain Can’t Enforce Islamic Law

BALTIMORE (CN) - The Bahrain-based company that bought the Church's Chicken chain discriminated against a black couple by insisting that their franchise follow Shari'ah, Islamic law, and refrain from selling pork, but it allows 30 Baltimore-area Church's franchises owned by white people to sell pork, the new franchisees claim in Federal Court. Defendant Crescent Capital Investments, now known as Arcapita, a U.S. branch of Bahrain's First Islamic Bank, bought the Church's chain in December 2004.

This complaint is complicated by the timeline during which the plaintiffs, Marcus and Denise Beasley, applied for and received their franchise, and when the several corporate defendants bought and sold the Church's chain.

The defendants are Arcapita Inc., Cajun Holding Co., Cajun Operating Co., and Crescent Capital Investments.

Plaintiffs opened their restaurant at a new terminal at the airport in May 2005, a year after they began negotiations for the franchise.

The complaint states: "Effective Dec. 26, 2004, after Plaintiffs had acquired their franchise, Crescent Capital Investment, Inc., which is the U.S. affiliate of the Bahrain based First Islamic Investment Bank, B.S.C., acquired substantially all of the assets of the Church's Chicken business from AFC. Crescent Capital Investments, Inc., subsequently assigned the assets of Church's Chicken to Cajun Holding Company. Cajun Holding Company subsequently assigned the assets of Church's Chicken to Cajun Operating Company. Crescent Capital Investments, Inc., together with its parent company, First Islamic Investment Bank, B.S.C., changed its name to Arcapita, Inc. and Arcapita Bank, B.S.C., respectively, on March 15, 2005. ...

"Arcapita has stated that it does not permit the sale of pork products in Church's Chicken restaurants. It requires that Church's Chicken restaurants comply with the tenets of Shari'ah, the Islamic law that bans, among other things, alcohol, tobacco, gambling, pornography and the consumption of pork. After Plaintiffs entered into the Franchise Agreement, but before they signed their lease with BAAM (the airport authority), prior to the expenditure of substantial sums for the build out of their Restaurant, and prior to the closing of their business loan, Plaintiffs were told by Arcapita that existing business franchisees who sold pork products for breakfast were sent a letter telling them that they would not have to pay royalties to Arcapita on such products and that Plaintiffs would be receiving the same letter. Arcapita knew that Plaintiffs intended to offer a breakfast menu which included pork products and that Plaintiffs' lease negotiations were based on this.

"Approximately one week before Plaintiffs were to open their Restaurant, Arcapita refused to permit Plaintiffs to sell pork products at its Restaurant, despite the fact that (1) Plaintiffs had acquired their Restaurant prior to Arcapita acquisition of the franchise chain, (2) Plaintiffs had been told by Arcapita, before Plaintiffs signed their lease ... that they would be permitted to do so, (3) Plaintiffs had submitted their menu, obtained from Arcapita, to their landlord, which included breakfast pork products, and (4) the menu was incorporated and made a part of Plaintiffs' lease, and (5) Plaintiffs had expended substantial sums to open their Restaurant.

"Arcapita permitted those Church's Chicken breakfast franchisees that were selling pork products for breakfast prior to Arcapita's acquisition of the chain to continue to do so. Arcapita has stated that it could not permit Plaintiffs to do so because it could not permit new franchisees who had not previously offered to sell these products to begin to do so.

"Arcapita's stated reason for refusing to permit Plaintiffs to sell breakfast pork products is pretextual. Arcapita permitted all of the other breakfast franchisees, which were approximately 30 Church's Chicken restaurants, to do so, all of which are owned by person who are non-African American or Caucasian. Of the Church's Chicken breakfast franchises that existed when Arcapita acquired the chain, Plaintiffs are the only ones who are African American. Additionally, Plaintiffs were the only existing breakfast franchisee that were not permitted to sell breakfast pork products. Plaintiffs also believe that there is at least one Church's Chicken franchise which has been transferred subsequent to Arcapita's acquisition of the franchise chain which has been permitted to continue to sell breakfast pork products and which is owned by a person who is Caucasian."

Represented by Kenny & Vitori of Towson, Md., plaintiffs demand punitive damages.

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