McDonald’s to buy back all franchises in Israel

McDonald’s announced Thursday that Omri Padan, the CEO and owner of Alonyal Limited, would be selling its franchises in Israel back to the corporation.

Alonyal began its McDonald’s operations in Israel more than 30 years ago and now has “grown the business to 225 restaurants and more than 5,000 employees.” The employees and restaurant operations will be retained on equivalent terms, McDonald’s said in a statement.

“For more than 30 years, Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities. We’ve grown the brand to be the leading and most successful restaurant chain in Israel and are grateful to our management, employees, suppliers, and customers who made this possible,” Padan said in a statement. “We are encouraged by what the future holds.”

Jo Sempels, the McDonald’s President of International Developmental Licensed Markets, said in a statement that they were grateful for Alonyal’s business and brand in Israel for the past 30 years.

“McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward,” Sempels said.

McDonald’s did not give a date for the purchase but said the closing date is subject to certain conditions and will be completed in the coming months.

In February, McDonald’s said the ongoing tensions in the Middle East are putting a dent in its business. The company said in its fourth quarter and full-year 2023 report, its licensed markets business, which includes most of its Middle East locations, increased by only 0.7 percent in the last quarter.

The company said the low number is a reflection of the “impact of the war” between Israel and Hamas. The fast-food chain came under scrutiny after McDonald’s Israel gave away thousands of free meals to Israeli forces and citizens following Hamas’s surprise attack on Oct. 7.

The move prompted boycotts to the company in protest of Israel’s counteroffensive and continued bombardment of Gaza, which has killed more than 32,000 people.