Elham Asaad Buaras
McDonald’s regained ownership of its 30-year-old Israel franchise from Alonyal on April 4, reclaiming control over 225 outlets. Following Alonyal’s announcement of offering free meals to the Israeli military shortly after the October 7 attack by Hamas, the US fast-food chain has encountered mass boycotts and protests.
McDonald’s is a global enterprise, yet its franchises are frequently locally owned and run autonomously. According to CEO Chris Kempczinski, the Israel-Hamas war has had a severe impact on the company’s business in various Middle Eastern and international markets.
“For more than 30 years, Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities,” said Omri Padan, CEO and owner of Alonyal.
McDonald’s added that it “remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward”.
Following the transaction’s completion in the upcoming months, McDonald’s will assume ownership of Alonyal’s outlets and operations while keeping its 5,000 employees. However, the terms of the transaction were not disclosed by the companies.
In February, Kempczinski said that the war had had a “disheartening” effect on sales in Middle Eastern countries and other Muslim-majority nations such as Malaysia and Indonesia.
“So long as this conflict, this war, is going on … we’re not expecting to see any significant improvement in this,” said Kempczinski. It’s a human tragedy, what’s going on, and I think that does weigh on brands like ours.”
McDonald’s fast-food division in the Middle East, China, and India saw a mere 0.7 percent sales uptick from October to December, significantly below the market’s projected 5.5 percent growth.
The decline in sales followed calls for a boycott of McDonald’s by customers in Muslim-majority nations in response to Alonyal’s announcement. This prompted franchisees in countries such as Egypt, Jordan, and Saudi Arabia to distance themselves from the donations and jointly commit millions of dollars in aid to Palestinians in Gaza.
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