Franchisee sues Islamic investment bank for racial discrimination

Daily Record, The (Baltimore), Apr 3, 2008 by Brendan Kearney

A Baltimore couple has filed a federal civil rights lawsuit against the Islamic investment bank that owns the Church's Chicken fast-food chain, alleging their franchise failed because the bank's strict adherence to the religious code of Shari'ah prohibited the couple from selling pork.

Marcus and Denise Beasley, who are black, claimed they were treated differently by the bank, now known as Atlanta-based Arcapita Inc., than non-black franchisees who were allowed to continue serving breakfast dishes containing pork after the chain was acquired by the bank in December 2004.

The couple did not benefit from the grandfather policy allowing the sale of pork even though their contract with the chain's former owners, AFC Enterprises Inc., to open a location in Baltimore/ Washington International Thurgood Marshall Airport's new terminal predated the takeover and policy change, according to the suit filed Tuesday in U.S. District Court in Baltimore.

In the lawsuit, which seeks $5 million in actual damages, $5 million in compensatory damages and $10 million in punitive damages, the Beasleys contend the bank's "stated reason" for disallowing the sale of pork in their case -- they had not yet opened for business - - was "pretextual."

"Arcapita permitted all of the other breakfast franchisees, which were approximately 30 Church's Chicken restaurants, to do so, all of which were owned by persons who are non-African American or Caucasian," the complaint states. "Of the Church's Chicken breakfast franchises that existed when Arcapita acquired the chain, plaintiffs are the only ones who are African American."

Calls to Arcapita were not returned Wednesday.

Shari'ah law

The Beasleys began negotiations with Atlanta-based AFC in May 2004 and inked a franchise agreement Dec. 17, 2004.

Church's Chicken, which serves American Southern comfort food, was founded in San Antonio in 1952 and has approximately 1,500 franchises worldwide, some of which trade as Texas Chicken, according to the company's Web site.

On Dec. 26, Crescent Capital Investments Inc., the U.S. affiliate of Bahrain-based First Islamic Investment Bank BSC, bought Church's, according to the suit. First Islamic changed its name to Arcapita in March 2005, the compliant states.

In April 2005, the Beasleys entered into a sublease with BAA Maryland Inc., the developer of retail and concession space in the airport, to operate their restaurant in the Pier A/B Core Food Court, according to the suit. The franchise's menu, which included pork items, had to be submitted for approval and became part of the sublease, the suit states.

According to the complaint, the Beasleys had been assured they would be receiving the same letter Arcapita had sent to other existing franchisees, which said the parent company would not be collecting royalties on pork products.

But "approximately one week before" the Beasleys' May 18 opening, the suit states, Arcapita informed them that, as new franchisees who had not yet opened, they may not serve pork, which Islam considers unclean.

The restaurant opened on schedule -- but never served pork -- and closed in late July 2006.

Substantial losses

Part of the "substantial economic losses" the Beasleys suffered was the loss of their house, according to their attorney, Paul M. Vettori of Kenny & Vettori LLP in Towson.

"As the result of the failure of their business at the BWI airport, they were unable to repay the bank for the loan they took out and the [home] was sold at foreclosure," Vettori said.

Vettori declined to comment on other aspects of the suit, including other potential reasons for the short tenure of the restaurant.

Vettori is also the latest attorney to represent the Beasleys in a separate breach of contract suit against AFC, Arcapita, BAA Maryland and the Maryland Aviation Administration. That suit, filed in February 2007, is working its way through the Anne Arundel County Circuit Court.

James C. Rubinger of Plave Koch PLC in Reston, Va., who represents Arcapita in the state case, did not immediately return a call seeking comment Wednesday.