The renowned American fast food company, McDonald’s, is set to repurchase all its branches in Israel as a result of a boycott triggered by the conflict between Israel and Hamas.
An agreement has been finalized with the local franchise holder, Alonyal, allowing for the reacquisition of 225 locations across Israel that provide employment to 5,000 individuals.
The brand faced backlash after Alonyal began distributing thousands of complimentary meals to Israeli soldiers, leading to a significant drop in sales since the conflict erupted in October.
McDonald’s announced on Thursday that a purchase agreement was signed with Alonyal, which has managed the iconic fast food chain in Israel for over three decades.
The transition will see the continuation of restaurant operations and employee contracts under similar conditions, with McDonald’s reaffirming its dedication to its operations in Israel. The specifics of the transaction were not disclosed.
The boycott commenced when countries with predominantly Muslim populations, including Kuwait, Malaysia, and Pakistan, publicly withdrew their support for the company due to its perceived backing of Israel.
As the boycott gained momentum globally, protests emerged in various locations outside the Middle East.
In January, the international chain acknowledged the significant impact of the conflict on its performance, with notable declines in business across France, Indonesia, and Malaysia, and the most severe impact observed in the Middle East.
CEO Chris Kempczinski attributed the financial downturn to “misinformation,” although it still affected the company’s revenues, leading to the first miss in quarterly sales targets in almost four years.
McDonald’s described the boycott as “disheartening and baseless,” emphasizing the company’s reliance on numerous independent entrepreneurs for the operation of its over 40,000 global stores, with around 5% 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.
“As long as this war is going on… we’re not expecting to see any significant improvement [in these markets],” he added.
By reintegrating the Israeli operations, McDonald’s aims to rebuild its standing in the Middle East and achieve its critical sales goals.
Following the onset of Israeli military actions triggered by a Hamas-led assault on southern Israel on October 7, which resulted in around 1,200 deaths and the capture of 253 hostages, the Gaza Strip has suffered extensive damage.
Out of the hostages, 130 remain captive, with at least 34 presumed dead.
Since the conflict’s start, over 33,000 fatalities have been reported in Gaza, according to the region’s Hamas-led health ministry.
