McDonald’s Franchise Sale Announcement
McDonald's revealed on Thursday that Omri Padan, the CEO and owner of Alonyal Limited, is set to sell his McDonald's franchises in Israel back to the company.
Alonyal kicked off its McDonald’s venture in Israel over three decades ago and has since expanded to 225 outlets with a workforce exceeding 5,000. McDonald's stated that the current staff and operations of these restaurants will be maintained under similar conditions.
McDonald's to buy back all of its Israeli-owned franchise locations following boycotts of the brand in the Middle East and other key markets. The boycotts launched after some locations provided free meals and discounts to the IDF.#Gazahttps://t.co/6oFC9FRhAS
— Mr. Popalzai (@JournalismPopal) April 4, 2024
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"For over three decades, Alonyal Limited has proudly brought the iconic Golden Arches to Israel, serving our communities. We've built the brand into Israel's most successful and leading restaurant chain, and we owe our gratitude to our management team, employees, suppliers, and customers for making this achievement possible," stated Padan. "We look forward to what lies ahead with optimism."
Jo Sempels, McDonald’s President of International Developmental Licensed Markets, expressed appreciation for Alonyal's stewardship of the McDonald's brand in Israel over the past 30 years.
McDonald’s Commitment to the Israeli Market
"McDonald’s is dedicated to the Israeli market and will continue to focus on delivering a positive experience for our employees and customers moving forward," Sempels commented.
While McDonald's has not specified an exact date for the acquisition, it mentioned that the closing is dependent on certain conditions and is expected to be finalized in the upcoming months.
Impact of Middle East Conflict on McDonald’s Operations
In February, McDonald's reported that the ongoing conflict in the Middle East has impacted its operations. According to its fourth-quarter and full-year 2023 financial report, the company's licensed markets segment, which includes the majority of its Middle East outlets, saw a modest growth of only 0.7 percent in the last quarter.
This modest growth rate reflects the effects of the conflict between Israel and Hamas. McDonald's faced criticism when its Israeli franchise provided thousands of free meals to Israeli forces and citizens in response to a surprise attack by Hamas on October 7.
This action led to boycotts against McDonald's in protest of Israel's military response and the continued airstrikes on Gaza, which have resulted in over 32,000 deaths.
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