Fast food giant McDonald’s has made the decision to repurchase all of its Israeli restaurants in response to a boycott of the brand during the Israel-Hamas war. The company has reached an agreement with franchisee Alonyal for the return of 225 outlets across the country, which currently employ 5,000 people.
McDonald’s faced criticism after Alonyal began giving away thousands of free meals to Israeli soldiers, and in January, the company admitted that the conflict had significantly impacted its business. Alonyal, led and owned by chief executive Omri Padan, has operated McDonald’s restaurants in Israel for over 30 years, as part of McDonald’s franchise system where individual operators are licensed to run outlets and employ staff.
The boycott of McDonald’s spread beyond the Middle East as Muslim-majority countries such as Kuwait, Malaysia, and Pakistan issued statements distancing themselves from the firm for its perceived support of Israel. Protests were staged worldwide, affecting McDonald’s businesses in France, Indonesia, and Malaysia.
Despite the backlash, McDonald’s remains committed to the Israeli market and ensuring a positive experience for employees and customers. The company thanked Alonyal for building the brand in Israel, and the restaurants, operations, and employees in Israel will be retained “on equivalent terms” following the buyback.
At the start of the year, McDonald’s chief executive Chris Kempczinski attributed the backlash to “misinformation,” but the company missed its first quarterly sales target in nearly four years. McDonald’s described the boycott as “disheartening and ill-founded,” noting that the company relies on thousands of independent businesses to own and operate most of its more than 40,000 stores worldwide. About 5% of these stores are located in the Middle East.
Taking the Israeli business back “in house” may help McDonald’s restore its reputation in the Middle East and meet key sales targets once more. The decision comes amidst devastating Israeli military operations in the Gaza Strip that began after Hamas-led gunmen attacked southern Israel, resulting in casualties and hostages. More than 33,000 people have been killed in Gaza since then, according to the territory’s Hamas-run health ministry.
