McDonald’s will purchase back all of its Israeli outlets after sales dropped due to a boycott of the company over its perceived support for Israel.
The fast food conglomerate faced criticism after its Israeli franchise provided hundreds of complimentary lunches to Israeli soldiers.
McDonald’s claims it has struck an agreement with franchisee Alonyal to reopen 225 restaurants.
In January, it stated that the Israel-Hamas conflict had “meaningfully impacted” sales.
Protests erupted across the Middle East, Indonesia, and France, affecting sales.
Alonyal, which is directed and controlled by CEO Omri Padan, has been operating McDonald’s restaurants in Israel for over 30 years.
McDonald’s operates on a franchise structure, which means that individual operators are licensed to run locations and hire employees.
Muslim-majority nations such as Kuwait, Malaysia, and Pakistan published declarations distancing themselves from McDonald’s, sparking a boycott.
Days after the Hamas attacks on Israel last October and the retaliation by Israel Defense Forces (IDF), a McDonald’s franchisee said on social media that it had “donated and continues to donate tens of thousands of meals to IDF units, the police, hospitals, residents around the strip, and all rescue forces.”.
The grassroots boycott grew beyond the Middle East, prompting global demonstrations. In addition to restaurants in the region, McDonald’s operations in France, Indonesia, and Malaysia have been impacted.
On Thursday, the firm stated: “McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward.” It also congratulated Alonyal for expanding the brand in Israel.
Mr. Padan stated, “We are encouraged by what the future holds.”
The US firm stated that the restaurants, operations, and workers in Israel will be kept “on equivalent terms,” although the terms of the transaction were not disclosed. McDonald’s employs 5,000 workers via Alonyal.
McDonald’s CEO Chris Kempczinski blamed the criticism on “misinformation” at the start of the year, but it still had an impact on the company’s finances, as it missed its first quarterly sales target in over four years.
McDonald’s called the boycott “disheartening and ill-founded.”. The majority of the company’s more than 40,000 outlets worldwide are owned and operated by thousands of individual entrepreneurs. Approximately 5% are found in the Middle East.
“In every country where we operate, including Muslim countries, McDonald’s is proudly represented by local owner operators,” Mr. Kempczinski stated at the time.
“So long as this war is going on, we’re not expecting to see any significant improvement [in these markets],” the head of McDonald’s said.
The corporation will be hoping that by bringing the Israeli business back “in house,” it will be able to rebuild its image in the Middle East and fulfill its crucial sales objectives once again.
Much of the Gaza Strip has been damaged by Israeli military operations, which began when Hamas-led terrorists stormed southern Israel on October 7, killing around 1,200 people and taking 253 hostages. About 130 hostages remain in captivity, with at least 34 thought dead.
More than 33,000 people have been murdered in Gaza since then, according to the Hamas-run health ministry.
