McDonald’s has announced it will reacquire all its outlets in Israel, following a boycott that swept across Muslim-majority nations due to the conflict between Israel and Hamas.
The fast-food behemoth confirmed it had sealed a deal with its franchise holder Alonyal to take back control of 225 locations, securing jobs for approximately 5,000 workers. This step comes in the wake of criticism McDonald’s faced after its franchisee provided thousands of complimentary meals to Israeli military personnel, which contributed to a considerable dip in regional sales since the hostilities commenced in October.
On Thursday, the announcement was made that an agreement with Alonyal, which has helmed the McDonald’s franchise in Israel for over three decades, was finalized. McDonald’s assured that the restaurants, including their operations and staff, would continue under similar conditions, underlining its dedication to the Israeli market.
The boycott gained momentum after countries like Kuwait, Malaysia, and Pakistan expressed their disapproval of McDonald’s perceived endorsement of Israel, leading to widespread protests and a growing boycott beyond the Middle East’s boundaries.
In January, the global chain acknowledged the significant adverse effects of the conflict on its business activities, particularly in nations like France, Indonesia, and Malaysia, with the Middle East experiencing the most severe impact.
McDonald’s CEO, Chris Kempczinski, attributed the financial downturn to “misinformation,” despite acknowledging the palpable hit to the company’s profits, marking the first missed quarterly sales target in almost four years. He cited the boycott as “disheartening and poorly grounded,” stressing that McDonald’s globally operates through numerous local business owners, including in Muslim-majority countries.
Kempczinski voiced concern over the ongoing conflict’s impact on the market, indicating no anticipated recovery while the situation persists.
By reinstating its Israeli operations directly under corporate management, McDonald’s aims to rejuvenate its image in the Middle East and achieve its critical sales objectives.
The conflict has left a trail of destruction in the Gaza Strip, following Israeli military operations sparked by Hamas-led assaults on southern Israel on October 7, resulting in about 1,200 deaths and the taking of 253 hostages. With around 130 hostages still detained, at least 34 presumed deceased, the toll in Gaza has exceeded 33,000 fatalities, as reported by the Hamas-controlled health ministry.