McDonald’s to acquire all 225 franchised restaurants in Israel | Wilnesh News

McDonald’s The American fast-food chain announced that it has signed an agreement to acquire all 225 restaurants in its Israeli franchise. It comes after sales fell sharply due to a boycott in support of Palestine during the Israel-Hamas war.

The Israeli restaurant is owned by local licensee Alonyal Ltd., which has been owned by Israeli businessman Omri Padan for more than 30 years.

“Agreement to sell Alonyal to McDonald’s Corporation has been signed,” McDonald’s issued a statement Thursday.. “Upon completion of the transaction, McDonald’s Corporation will own Alonyal Limited’s restaurants and operations, and employees will remain on equal terms.” The company did not disclose the purchase amount.

McDonald’s reported its first revenue decline in nearly four years in February as sales growth weakened in its divisions, which include the Middle East.

Consumers around the world, especially in Arab and Muslim-majority countries, are boycotting the brand because they believe it supports Israel – something the chain’s management denies – Following action by Israel Franchise Branch The company provided free McDonald’s meals to Israeli soldiers after a Hamas-led terror attack on Oct. 7 killed about 1,200 people in Israel and took another 253 hostage.

Israel’s war with Hamas has now killed at least 33,000 people in the blockaded Gaza corridor, according to the enclave’s health ministry, with the conflict sparking United Nations and World Health Organization warn More than half a million people are facing imminent famine.

In January, McDonald’s CEO Chris Kempczinski described “Meaningful business impactThe chain’s Middle Eastern markets and some countries outside the region, such as Muslim-majority Malaysia and Indonesia, have suffered due to the war and what he called “related misinformation” about the company.

“We are disappointed by false information and inaccurate reporting about our stance on conflicts in the Middle East,” McDonald’s said in a statement in November.

“McDonald’s Corporation is not funding or supporting any government involved in this conflict and any actions by our local development licensee business partners are taken independently and without McDonald’s consent or approval.”

McDonald’s wrote in a regulatory filing in February that it was “monitoring the evolving situation and expects that the situation will continue to negatively impact sales and revenue systemwide as long as the war continues.”

The burger giant’s franchises in several Muslim countries, including Saudi Arabia, Turkey, Oman, the United Arab Emirates, Kuwait and Jordan, issued statements seeking to distance themselves from Israeli franchises while also pledging to provide supplies to Gaza. Funding and assistance.

However, this doesn’t help much. According to two people familiar with the matter, sales at McDonald’s franchise stores in several Arab countries fell by 50% to 90% month-on-month after the boycott.

In Lebanon, protesters attacked and vandalized local McDonald’s restaurants, and pro-Palestinian protesters in London surrounded some branches of the chain, shouting “Shame on you.”

“Regarding the news about McDonald’s in Israel donating meals. We confirm this is their personal decision,” the McDonald’s franchisee in Saudi Arabia said in a statement in October. “Neither McDonald’s Global, nor us, nor any other country had anything to do with this decision, directly or indirectly.”

The company’s shares are down 10% year to date and down 5.5% from the same period last year.

Monica Marks, a professor of Middle Eastern politics at NYU Abu Dhabi, wrote in a post on More control”.

She thinks McDonald’s story could influence future brand-franchise relationships.

“One lesson I expect McDonald’s and other global brands will learn from the Israeli-Palestinian boycott and controversy is that they may seek to exert greater control over the actions of local franchisees, which may be interpreted as part of the initial franchise contract. A lightning rod for politicization.”

In the six months since the Oct. 7 attacks and Israel’s assault on Gaza, many McDonald’s restaurants around the Arab world that usually have strong customer traffic have been largely empty. In Dubai, restaurants that once saw late-night queues and swarms of delivery drivers are now seeing empty parking lots.

“I’m sure the local Arabic McDonald’s franchisees are breathing a sigh of relief today,” Marks said. “Their business had nothing to do with Alonyal’s decision in October to provide free meals to the Israel Defense Forces, but was hit hard by the boycott in the MENA region.”

McDonald’s boycott triggers Further boycotts of major Western brands include Starbucks, Revenue from the Middle East also fell sharply after the Seattle-based coffee chain sued a union of workers over pro-Palestinian messages it posted online. In a statement on its website, Starbucks called the suggestion that it supports the Israeli government in any way “patently false.”