Fast food giant McDonald’s has declared its intention to repurchase its Israeli franchise despite the ongoing conflict in the Middle East. The decision, announced on April 4th, entails the sale of the license owned by Omri Padan, CEO and proprietor of Israeli company Alonyal Limited, back to McDonald’s.
“For over three decades, Alonyal Limited has taken pride in bringing the iconic Golden Arches to Israel, fostering a thriving brand presence in our communities,” stated Mr. Padan. “Our steadfast commitment has established McDonald’s as the premier and most prosperous restaurant chain in Israel.
We extend our gratitude to our management, employees, suppliers, and loyal customers who have been instrumental in this journey. We look ahead with optimism towards what the future holds.”
McDonald’s buys all of its Israeli franchise restaurants (Credits: NDTV)
Alonyal currently operates 225 McDonald’s outlets with a workforce of over 5,000 individuals.
Upon finalization of the transaction, McDonald’s Corporation will assume ownership of Alonyal Limited’s restaurants and operations, with existing employees retaining their positions under equivalent terms, as per the statement released.
Jo Sempels, President of International Developmental Licensed Markets at McDonald’s, expressed gratitude to Alonyal for their longstanding dedication to the business and brand in Israel.
“McDonald’s reaffirms its commitment to the Israeli market and pledges to uphold a positive employee and customer experience moving forward,” stated Mr. Sempels. The decision comes in the wake of McDonald’s earlier announcement in February, citing the regional unrest’s impact on its business.
According to the company’s 2023 financial report, the final quarter witnessed a marginal 0.7 percent increase in the licensed markets business, encompassing most Middle Eastern locations. McDonald’s attributes this minimal growth to the repercussions of the conflict between Israel and Hamas.
CEO Chris Kempczinski (Credits: Business Insider)
Following a surprise terror attack by Hamas on October 7, McDonald’s Israel distributed thousands of complimentary meals to Israeli forces and citizens, prompting calls for a boycott of the company in Muslim-majority nations. Despite its global presence, McDonald’s operates franchises that function independently under local ownership.
CEO Chris Kempczinski previously acknowledged the conflict’s adverse effects on several other Middle Eastern markets earlier this year. Pro-Palestinian groups have criticized major Western fast-food chains, including Starbucks, over alleged financial ties to Israel.
As of now, McDonald’s has not disclosed the finalized purchase date. However, the company has indicated that the closing is contingent upon certain conditions and is expected to conclude in the ensuing months.
