McDonald’s to buy back Israeli restaurants after boycotts
McDonald’s, a prominent player in the fast-food industry, has announced plans to repurchase all of its establishments in Israel amid a backlash against the brand due to its association with the conflict in Israel-Hamas.
The corporation disclosed that it had finalized a deal with its franchisee, Alonyal, for the acquisition of 225 outlets situated across Israel, which currently employ approximately 5,000 individuals.
Criticism was directed at McDonald’s after reports emerged that Alonyal had been distributing free meals to Israeli soldiers, prompting scrutiny of the company’s involvement in the conflict. In January, McDonald’s acknowledged that the situation had significantly impacted its operations.
Alonyal, led and owned by CEO Omri Padan, has been operating McDonald’s branches in Israel for over three decades, operating under the franchise model, where individual operators are licensed to manage outlets and hire staff.
The boycott against McDonald’s gained momentum after several Muslim-majority nations, including Kuwait, Malaysia, and Pakistan, publicly distanced themselves from the brand due to perceived support for Israel. The movement expanded globally, with vocal protests staged worldwide. Beyond the Middle East, McDonald’s operations in countries such as France, Indonesia, and Malaysia were also affected.
In a statement released on Thursday, McDonald’s reiterated its dedication to the Israeli market and ensuring a positive experience for both employees and customers in the future. The company expressed gratitude to Alonyal for its role in establishing the McDonald’s brand in Israel.
Mr Padan said: “We are encouraged by what the future holds.”
The US company said the restaurants, operations and employees in Israel would be retained “on equivalent terms” though the terms of the sale were not revealed.
At the start of the year, McDonald’s chief executive Chris Kempczinski blamed the backlash on “misinformation” but it hit the bottom line nonetheless and the company missed its first quarterly sales target in nearly four years.
The boycott was described as “disheartening and ill-founded” by McDonald’s. The company relies on thousands of independent businesses to own and operate most of its more than 40,000 stores around the world. About 5% are located in the Middle East.
“In every country where we operate, including in Muslim countries, McDonald’s is proudly represented by local owner operators,” Mr Kempczinski said at the time.
“So long as this war is going on… we’re not expecting to see any significant improvement [in these markets],” the McDonald’s boss added.
The company will be hoping that by taking the Israeli business back “in house” it can restore its reputation in the Middle East and meet its key sales targets once more.
Much of the Gaza Strip has been devastated during the Israeli military operations that began after Hamas-led gunmen attacked southern Israel on 7 October, killing about 1,200 people and seizing 253 hostages. About 130 of the hostages remain in captivity, at least 34 of whom are presumed dead.
More than 33,000 people have been killed in Gaza since then, the territory’s Hamas-run health ministry said.
