McDonald’s (NYSE:MCD) is Suing the Italian City of Florence for $20 Million

The US hamburger and fast food restaurant chain McDonald’s (NYSE:MCD) has decided to sue the historic Italian city of Florence for blocking the business from opening a restaurant there. The lawsuit will be for €18 million or $20 million.

Authorities in the city had earlier prevented the Illinois-based business from opening a restaurant at one of the most historic plazas in Florence. McDonald’s wanted to start an outlet on the Piazza del Duomo, a famous cathedral, which draws thousands of tourists from around the world.

Florence City Council Turns Down McDonald’s Proposal

However, last June, the center-left mayor of Florence turned down their application, after changing the licensing laws in the city. That was in January 2016. Apparently, the city wants to protect its historic heritage and wants to do away with too much commercialization and outside influence. Then last July, a technical panel later ratified the new licensing laws.

Florence also wants to protect “traditional businesses”. The mayor says the city now wants to protect authentic Tuscan businesses and goods, at least in the historic square, while starting an initiative against backpacker-focused businesses, which has been proliferating in recent times. The mayor, however, says that we are not prejudiced against any business.

McDonald’s Can Apply, But We Can Say “No”

Mayor Dario Nardella said, “McDonald’s has the right to submit an application because this is permitted under the law, but we also have the right to say no”.

McDonald’s, of course, doesn’t like any of these, saying that there have been financial losses because the city council turned down their proposal. The fast-food chain points out that they had submitted a modified proposal that fits with the new city guidelines. But it has been turned down, even after this.

The chain is now claiming that they have been discriminated against. According to their estimates, McDonald’s (NYSE:MCD) is going to lose considerable money over the next 18 years, and so it wants to be compensated.

McDonald’s issued a statement, saying that, “We completely agree that the cultural and artistic heritage and the Italian historical town centers have to be protected and guaranteed, as well as the traditions and the historical small shops, but we cannot accept discriminatory regulations that damage the freedom of private initiative without being advantageous to anyone”.

Florence is among the most historic cities in the world, and the most visited destinations in Italy. There are many ancient buildings in the Cathedral Square that go back a long time.