McDonald’s has announced its plan to purchase all 225 franchise restaurants in Israel on Thursday, just weeks after acknowledging the challenges posed by recent events on its business operations.
The renowned fast food chain revealed that it has reached an agreement with the Israeli franchise Alonyal to acquire the firm’s McDonald’s (MCD) franchise restaurants across the country.
Omri Padan, the CEO and owner of Alonyal, expressed in a statement, “For over 30 years, Alonyal Limited has taken pride in introducing the Golden Arches to Israel and serving our communities.” Alonyal currently employs over 5,000 individuals across its McDonald’s establishments in the country.
McDonald’s further emphasized in the statement its continued dedication to the Israeli market and ensuring a positive experience for both employees and customers in the market moving forward.
Details regarding the terms of the deal were not disclosed.
The majority of McDonald’s outlets globally are operated by local franchisees who function as independent entities, determining wages, prices, and occasionally making statements or donations at their discretion.
This decentralized model has contributed to McDonald’s becoming a worldwide phenomenon, boasting over 41,000 restaurants globally as of 2023. However, it also means that the US-based company cannot dictate how each operator should respond during times of crisis.
In the aftermath of attacks on October 7, in which Hamas militants killed more than 1,200 Israeli soldiers and civilians and kidnapped some 200 more, Alonyal offered discounts to local soldiers and security forces.
Several McDonald’s operators in the broader region swiftly distanced themselves from the actions of the Israeli firm. For instance, franchise groups in Kuwait and Pakistan released statements clarifying that they were not affiliated with the Israeli franchise.
Similar to other American brands, McDonald’s has faced boycotts in numerous markets within the region.
In January, CEO Chris Kempczinski acknowledged that the company was encountering a “significant business impact” in the Middle East because of the Israel-Hamas war. During its most recent earnings presentation in February, McDonald’s reiterated this sentiment and anticipated that the situation would continue to affect its operations.
In his January statement, Kempczinski seemed to underscore the company’s stance of neutrality, stating, “In every country where we operate, including in Muslim countries, McDonald’s is proudly represented by local owner-operators.”
