Mikkel Rosenvold
7 weeks ago

McDonald's Buys Back Israeli Restuarants amid Hamas War

McDonald's takes a significant step by acquiring all 225 of its franchise restaurants in Israel from Alonyal Limited, amidst the ongoing Israel-Hamas conflict.

In an impactful business maneuver, McDonald's has announced its acquisition of all its franchise outlets in Israel. This decision comes in the wake of the company revealing how the Israel-Hamas war adversely affected its operations.

The fast-food behemoth finalized a deal with Alonyal Limited, taking over the latter’s McDonald's franchise restaurants across Israel. Omri Padan, Alonyal's CEO, voiced his pride in contributing to McDonald's growth in Israel for over three decades, highlighting the employment of more than 5,000 individuals across these outlets.

McDonald's statement reiterates its dedication to the Israeli market, emphasizing the importance of a positive experience for both employees and customers. However, the financial terms of the acquisition remain under wraps.

Globally, McDonald's operates through local franchises, granting them autonomy over various operational aspects such as pricing and wages. This model has propelled McDonald's to international success, boasting over 41,000 restaurants worldwide.

However, this operational independence limits McDonald's ability to dictate franchise actions during crises. The October 7 attacks by Hamas militants, which resulted in the loss of over 1,200 Israeli lives, saw Alonyal offering discounts to local soldiers, prompting distancing by McDonald’s franchises in Kuwait and Pakistan.

The regional unrest has led to boycotts against McDonald's in several Middle Eastern markets. CEO Chris Kempczinski admitted the significant impact of the conflict on business operations, a sentiment echoed in McDonald’s latest earnings report. Despite these challenges, Kempczinski highlighted the company's neutral stance, emphasizing its representation by local operators in every market, including those with a Muslim majority.

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