McDonald’s has announced its decision to repurchase its 30-year-old franchise in Israel from Alonyal, effectively taking back control of 225 outlets that employ over 5,000 individuals, as reported by AlJazeera News on Friday.
Omri Padan, the CEO and owner of Alonyal, expressed pride in bringing the Golden Arches to Israel and serving local communities for more than three decades, according to a statement released on Thursday.
McDonald’s stated its ongoing commitment to the Israeli market and its dedication to ensuring a positive experience for both employees and customers in the future.
Following the completion of the transaction in the upcoming months, McDonald’s will assume ownership of Alonyal’s outlets and operations while retaining its workforce. However, specific details regarding the terms of the transaction remain undisclosed.
The decision to repurchase the franchise comes amid a series of boycotts and protests directed at McDonald’s after Alonyal announced plans to provide complimentary meals to the Israeli military shortly after the October 7 attack by the Palestinian group Hamas.
Despite being a global entity, McDonald’s franchises are often locally owned and operated autonomously. McDonald’s CEO Chris Kempczinski previously acknowledged a significant impact on business in several markets in the Middle East and beyond due to the Israel-Hamas conflict.
Kempczinski highlighted the adverse effects on sales in Middle Eastern countries and other Muslim-majority nations like Malaysia and Indonesia, stating that the ongoing conflict hindered any substantial improvements.
Sales growth for McDonald’s division in the Middle East, China, and India during October-December only reached 0.7%, falling far below market expectations of 5.5%.
The decline in sales followed calls for a boycott of McDonald’s by customers in Muslim-majority countries in response to Alonyal’s announcement. In response, franchisees in countries such as Egypt, Jordan, and Saudi Arabia distanced themselves from the donations and collectively pledged millions of dollars in aid to Palestinians in Gaza.
