(MENAFN) McDonald’s has revealed plans to repurchase all of its restaurants in Israel following a significant decline in sales attributed to a boycott of the franchise amid perceptions of its support for the Jewish State during the Gaza conflict. The decision comes after a period of strained relations with consumers across the Middle East and other Muslim-majority countries, leading to a notable impact on the company's fourth-quarter revenues.
For over three decades, McDonald’s outlets in Israel were operated by the Alonyal company under a franchise system. However, the franchise faced widespread criticism and boycotts after footage emerged showing Israeli restaurants providing free meals to military personnel. This backlash resulted in a downturn in sales and consumer sentiment, prompting the fast-food giant to take action.
In an official statement, McDonald’s expressed its commitment to the Israeli market and ensuring a positive experience for both employees and customers moving forward. The company announced its intention to acquire all 225 outlets from Alonyal, pledging to retain all 5,000 employees and maintain operations on equivalent terms. However, specific details regarding the sale terms have not been disclosed.
The decision to repurchase its Israeli restaurants underscores McDonald’s efforts to address the fallout from the Gaza conflict boycott and regain consumer trust in the region. The move comes amidst similar challenges faced by other Western brands, such as KFC, Starbucks, and Unilever, which have reported financial losses and backlash over their perceived stance on the Israel-Palestine conflict.
In Pakistan, anti-Israel sentiments culminated in the torching of a KFC restaurant, highlighting the volatile nature of the situation and the broader implications for multinational corporations operating in the region. McDonald’s CEO Chris Kempczinski acknowledged the significant business impact of the boycott and emphasized the company's commitment to navigating these challenges while reaffirming its dedication to its Israeli operations.
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