McDonald’s forced to buy back Israeli franchises amidst boycott
An international boycott has forced fast-food giant McDonald’s to buy back its Israeli franchise, with the chain reporting a loss in profits over the Israel-Hamas war, reports The New Arab and agencies on April 5.
McDonald’s Corporation announced on April 4th its intention to take over Alonyal, the company that currently owns 225 McDonald’s restaurants in Israel. This comes amidst a slump in sales over the brand’s alleged support for Israel, which has sparked a wide-spread boycott in support of Gaza.
While the transaction’s conditions were not outlined in McDonald’s statement, it is understood that the employees will remain following the transaction.
McDonald’s move comes in the wake of other corporations struggling to appease consumers over fall-out from the Israel-Hamas war.
Starbucks franchises in the Middle East and North Africa have undergone significant workforce reductions over alleged support for Israel. Retail franchise Alshaya, which operates Starbucks in the Middle East, announced the redundancy of 2,000 employees – 4 percent of its total employees.
READ: Starbucks Middle East undergoes massive cull of jobs
According to the McDonald’s quarterly earnings report, released in February, the beginning of the Israel-Hamas war in October impacted its earnings.
“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,” said Chief Executive Chris Kempczinski.
The CEO previously blamed boycotts over “false news”, writing a social media post on January 4 saying, “This is disheartening and ill-founded. In every country where we operate, including Muslim countries, McDonald’s is proudly represented by local owner operators who work tirelessly to serve and support their communities while employing thousands of their fellow citizens.
“We abhor violence of any kind and firmly stand against hate speech, and we will always proudly open our doors to everyone”, Kempczinski added.
However, the chain was found to have provided thousands of free meals to Israeli soldiers.
Outside the US, the total sales of McDonald’s franchises dropped 0.7 percent. According to CEO Kempczinski the boycott has had a “meaningful impact”, particularly in the Middle East and in majority Muslim countries including Malaysia and Indonesia. French franchises have also taken a hit owing to France’s large Muslim community.
Overall, McDonald’s has experienced the first sales reduction in nearly four years, with its share price falling by approximately 2 percent.
The New Arab / Agencies
