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5 Apr, 2024 16:54

McDonald’s to buy back its Israeli restaurants

The fast food chain has reported decreased sales amid boycotts in Muslim countries over the Gaza conflict
McDonald’s to buy back its Israeli restaurants

McDonald’s has announced that it will be buying back all of its restaurants in Israel after sales in the region plunged due to a boycott of the franchise over its perceived support for the Jewish State in the ongoing Gaza conflict.

The popular burger chain uses a franchise system under which individual operators are licensed to run outlets and employ staff. For over 30 years, all McDonald’s restaurants in Israel were run by the Alonyal company.

In a statement released on Thursday, McDonald’s said it remains “committed to the Israeli Market and to ensuring a positive employee and customer experience in the market going forward.” 

The company said it will be purchasing all 225 outlets from Alonyal and that all 5,000 of its employees, as well as its restaurants and operations in Israel, would be retained on “equivalent terms.” No other terms of the sale have been revealed.

McDonald’s faced widespread criticism after its Israeli restaurants were filmed giving away thousands of free meals to Israeli military personnel. The outcry resulted in spontaneous boycotts from consumers across the Middle East and other Muslim-majority countries such as Pakistan, Malaysia, and Saudi Arabia.

As a result, the company’s fourth-quarter revenues came in significantly below market expectations. McDonald’s CEO Chris Kempczinski said the company is witnessing a “meaningful business impact.” 

Others Western brands, such as KFC, Starbucks, and Unilever, have also faced backlash over their perceived position on the Israel-Palestine conflict and have reported financial losses in the fourth quarter of 2023. In Pakistan, anti-Israel protesters torched a KFC restaurant last week.

The boycotts against major Western brands come after Israel launched a military operation in Gaza following an incursion by Hamas militants into the southern part of the country last October. During the attack, over 1,200 people were killed and scores of hostages were taken. The Israeli campaign has left at least 33,000 Palestinians dead, and over 75,000 injured, according to the Palestinian Health Ministry. UN Human Rights Council rapporteur Francesca Albanese has accused Israel of committing “genocide” in the enclave.