McDonald’s buys back all Israeli restaurants after they gave free food to IDF soldiers

McDonald’s will buy back all 225 of its restaurants in Israel, the Israeli franchisee owner announced on Thursday.

The fast-food franchisee was criticised after it provided thousands of free meals to IDF soldiers in the days after October 7, leading to consumer boycotts of McDonald’s by pro-Palestinians in the Middle East and other regions. The boycotts caused a “meaningful business impact” in the ensuing months, according to a statement by McDonald’s CEO Chris Kempczinski in January.

Omri Padan, CEO and owner of franchisee Alonyal Limited, announced on Thursday that he had signed an agreement to sell the Israeli outposts back to McDonald’s Corporation.

“For more than 30 years, Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities,” Padan said in a statement published by McDonald’s. “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. We are encouraged by what the future holds.”

Jo Sempels, President of International Developmental Licensed Markets at McDonald’s Corporation, added: “We thank Alonyal Limited for building the McDonald’s business and brand in Israel over 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.”

The conditions of the transaction, due to be completed in the coming months, are unclear at this time, though the statement by McDonald’s stipulated that the US chain “will own Alonyal Limited’s restaurants and operations, and employees will be retained on equivalent terms.”

Padan received the McDonald's franchise in 1992 and opened the first branch in Israel in 1993. The statement by McDonald’s Corporation said that, over the 30 years of McDonald’s brand journey in Israel, Alonyal Limited grew the business to include 225 restaurants and over 5,000 employees.

McDonald’s relies on thousands of independent businesses to own and operate most of its over 40,000 stores worldwide, about 5 per cent of which are located in the Middle East.

Other major Western chains have been victims of grassroots boycott campaigns over their alleged ties to Israel and endorsement of its war in Gaza. Starbucks, Pizza Hut, Burger King and Papa John’s have all been named by pro-Palestine groups as franchises to boycott.