McDonald’s has been active in Israel for over thirty years and is successful by their own account. However, the ongoing conflict in the Middle East has led to increasing criticism of the fast-food chain. When McDonald’s first opened in Israel in 1993, they faced resistance from the government due to concerns from potato farmers. This led to a “French fry war” between Israel and McDonald’s, with local authorities denying their request to import frozen French fries.
Despite its success in the Israeli market, McDonald’s has faced criticism due to its positioning during the Gaza War. Each country’s branches operate independently, leading to protests and calls for boycotts from supporters of the Palestinian population worldwide. The Israeli licensee’s actions have caused distrust among franchisees in neighboring countries, who have donated to the Palestinian people in an effort to distance themselves from their support for Israel.
McDonald’s CEO Chris Kempczinski expressed disappointment over the situation and its impact on business. The company reported its first sales decline in four years, particularly in the Middle East region, as a result of the Gaza War. In response, Alonyal Limited, the franchisee in Israel, sold all 225 branches back to McDonald’s.
The fast-food chain has announced its commitment to restoring its reputation in the Middle East by buying back those branches and reopening them under new management. The deal is subject to certain conditions and is expected to be completed in the coming months, with all 5,000 employees retaining their jobs.