McDonald's to buy Israeli branches, seeks new franchisee after controversy

McDonald's Corp has decided to purchase its Israeli branches from Alonyal Ltd, taking direct control of the operations several months after the franchise became a focal issue during the early stages of the war in Gaza, Bloomberg reported.

“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, who leads the McDonald’s segment that oversees international markets with licensed restaurants.

According to Calcalist, an Israeli financial news website, the chain intends to search for a new franchisee for its Israeli operations a few months after finalising the acquisition. McDonald's announced that the deal with Alonyal hinges on specific prerequisites, expecting the transaction to conclude in the next few months.

Over 30 years ago, Alonyal introduced the McDonald's brand to Israel, expanding the business to include 225 locations and over 5,000 staff members, Bloomberg reported.

Following the attacks on 7 October, the franchise faced backlash when images and videos on Instagram revealed its Israeli stores providing meals to soldiers. This prompted franchise operators in Saudi Arabia, Malaysia, and Pakistan to publicly criticise the actions.

In a statement a few days later, Chris Kempczinski, the CEO of McDonald’s, said that the company “firmly condemns violence and hate speech” and feels “deeply disturbed by the acts of antisemitism and Islamophobia," Bloomberg reported.