McDonald’s is set to repurchase all its Israeli outlets after facing a boycott spurred by criticism for providing thousands of complimentary meals to Israeli soldiers.
The global fast-food chain announced it had struck a deal with franchisee Alonyal to regain control of 225 restaurants throughout Israel, employing around 5,000 workers. The company acknowledged in January that the conflict had significantly affected its operations, with protests impacting sales not only in the Middle East but also in Indonesia and France.
Alonyal, led by CEO Omri Padan, has managed McDonald’s establishments in Israel for over three decades under the franchise system, where individual operators are licensed to operate outlets and manage staff.
The boycott originated in Muslim-majority nations such as Kuwait, Malaysia, and Pakistan, denouncing McDonald’s perceived support for Israel. This led to widespread protests globally, affecting not only restaurants in the Middle East but also businesses in France, Indonesia, and Malaysia.
In response to the developments, McDonald’s expressed its commitment to the Israeli market and ensuring a positive experience for both employees and customers going forward. CEO Omri Padan expressed optimism about the future.
While the specifics of the sale were not disclosed, McDonald’s assured that the Israeli restaurants, operations, and employees would be retained under comparable terms.
Earlier in the year, McDonald’s CEO Chris Kempczinski attributed the backlash to misinformation, but the financial impact was evident as the company missed its quarterly sales target for the first time in nearly four years.
McDonald’s denounced the boycott as unfounded and disheartening, emphasizing its reliance on independent businesses to own and operate the majority of its over 40,000 stores worldwide. Approximately 5% of these outlets are situated in the Middle East.
The company hopes that by reclaiming its Israeli operations, it can restore its reputation in the Middle East and achieve its sales objectives once again.
The ongoing conflict in the region has caused significant devastation, particularly in the Gaza Strip, following military operations initiated after Hamas-led gunmen attacked southern Israel. The toll includes casualties and hostages, with thousands of lives lost, according to Gaza’s health ministry.
