McDonald’s Takes Over Israeli Franchise Amid Gaza Boycott, Known for Offering Free Meals to Soldiers

In a recent announcement, McDonald’s Corporation revealed its plans to acquire Alonyal, a company that operates 225 McDonald’s restaurants in Israel. These restaurants have been facing challenges due to calls for a boycott following the Israeli military’s actions in Gaza.

McDonald’s has chosen to keep the terms of the transaction under wraps. In a statement, the company mentioned that the deal is contingent upon certain conditions, although these were not specified.

For over three decades, Alonyal has been running McDonald’s restaurants in Israel, amassing a portfolio of 225 franchised properties. With a workforce exceeding 5,000 employees, rest assured they will all be retained following the sale.

In presenting its 2023 earnings report in February, McDonald’s said the war in Gaza that began in October with the Hamas attacks on Israel was weighing on its results.

McDonald’s was targeted with boycott calls after the franchised restaurants in Israel offered thousands of free meals to Israeli soldiers.

“We recognize that families in their communities in the region continue to be tragically impacted by the war and our thoughts are with them at this time,” Chief Executive Chris Kempczinski said in an analyst call.

He said the impact of the boycott was “meaningful,” without elaborating.

McDonald’s fourth quarter sales disappointed analysts. In franchised restaurants outside the United States, comparable sales fell 0.7 percent.

“Obviously the place that we’re seeing the most pronounced impact is in the Middle East. We are seeing some impact in other Muslim countries like Malaysia, Indonesia,” said Kempczinski.

This also happened in countries with large Muslim populations such as France, especially for restaurants in heavily Muslim neighbourhoods, he said.

McDonald’s shares were down nearly 2 percent in after-market trading Thursday.