Business

McDonald’s to buy Israel franchises as war continues between Israel and Hamas

McDonald’s Corporation announced Thursday an agreement to buy its Israel franchise that has 225 restaurants and more than 5,000 employees. This comes as the war between Israel and Hamas continues and other unrest in the Middle East upticks.

Alonyal Limited, which owns and operates McDonald’s restaurants in Israel, signed an agreement with McDonald’s Corporation for the sale.

“For more than 30 years, Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities,” Omri Padan, CEO and owner of Alonyal Limited said in a statement from McDonald’s. “We’ve grown the brand to be the leading and most successful restaurant chain in Israel and are grateful to our management, employees, suppliers, and customers who made this possible. We are encouraged by what the future holds.”

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Israelis eat at a kosher McDonald's restaurant

Israelis eat at a kosher McDonald’s restaurant March 2, 2006 in Tel Aviv. The McDonald’s Corporation is buying all of its restaurants in Israel during its ongoing war with Hamas. (Photo by David Silverman/Getty Images)

The McDonald’s Corporation said it will own Alonyal Limited’s restaurants and operations, and employees will be retained on equivalent terms.

“We thank Alonyal Limited for building the McDonald’s business and brand in Israel over the past 30 years. McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward,” said Jo Sempels, President of International Developmental Licensed Markets at McDonald’s Corporation.

A large percentage of McDonald’s restaurants around the world are owned by franchisees. Buying the Israeli franchises comes at a time as the corporation aims to increase its number of stores worldwide by about 8,800 to bring its total to 50,000 restaurants before 2028.

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McDonald’s, one of the world’s largest fast-food chains in the world, said its operations in the Middle East have taken a hit with the ongoing war and other regional conflicts, according to McDonald’s Chief Executive Officer Chris Kempczinski. 

Kempczinski said operations there are being affected due to “misinformation” about the fast-food chain’s position on the conflict. He wrote that “several markets in the Middle East and some outside the region are experiencing a meaningful business impact due to the war and associated misinformation that is affecting brands like McDonald’s.”

Indonesia protesters

Indonesia protesters demand the closure of McDonald’s, KFC, Burger King, Starbucks, and Pizza HUT outlets because they are considered to support Israel in attacking militant group Hamas in Palestine on October 17, 2023 in Surabaya, Indonesia. (Photo

Since Hamas attacked Israel on Oct. 7, 2023, McDonald’s said it would donate free meals to the Israeli military, according to Reuters. This sparked a regionwide boycott of the fast-food chain, as well as other American fast-food restaurants like Starbucks, Burger King, Pizza Hut and American products like Coca-Cola and 7-Up.

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The agreement is subject to certain conditions, with closing of the agreement anticipated in the coming months, the corporation stated in a press release.

Reuters contributed to this report.

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