McDonald’s HQ to take control of Israeli branches after boycotts hit sales

McDonald’s headquarters is to take over ownership of its branches in Israel after global sales were hit by customer boycotts over the war in Gaza.

The US-based fast food giant said it would buy its 30-year-old Israel franchise from Alonyal Ltd, which has 225 outlets in the country.

It comes following outrage last year when McDonald’s Israel announced it was donating thousands of free meals to the country’s troops fighting in Gaza.

The giveaway prompted calls for customers worldwide to shun the fast food chain, with critics accusing the company of helping to support the mass killings of Palestinian civilians.

Israel denies allegations of genocide and other war crimes. It launched military action in Gaza against Hamas after the militant group killed around 1,200 people and took hundreds hostage in raids on 7 October last year.

This week, the Hamas-run health ministry in Gaza said the number of people killed in Israel’s response has now risen above 33,000.

Earlier this year McDonald’s chief executive Chris Kempczinski admitted there had been a “meaningful business impact” as a result of the boycotts, while figures in February revealed the company’s sales had been dented, particularly in Asia.

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McDonald’s said it “remains committed to the Israeli market” following the move and vowed to ensure there was “a positive employee and customer experience in the market going forward”.

Sources at the company’s US headquarters tried to distance themselves from the controversy earlier this year by saying it was keen not to take sides in the conflict.

Mr Kempczinski also said McDonald’s “abhor violence of any kind”, as he blamed both the war and “associated misinformation” for the impact on sales.

It is unclear why management has now decided to intervene in Israel and whether it will stop giving free food to Israeli soldiers as a result.

Alonyal chief executive Omri Padan said McDonald’s aimed to complete the transaction in the coming months and would keep on its 5,000 employees in the country.

The firms have not disclosed further details of the buyout.

Other global companies, including coffee chain Starbucks, have also been hit by boycotts related to the war in recent months.

It comes as part of the wider BDS (Boycott, Divestment, Sanctions) campaign, which aims to use economic power to put pressure on Israel to “comply with international law” and stop its assault on Gaza.

Activists say they are inspired by the boycott movement which helped end apartheid in South Africa. Israel strongly rejects such comparisons.