McDonald’s to buy all 225 Israel franchise restaurants after boycott fallout

McDonald’s signed a deal to purchase all 225 of the restaurants that comprise its Israel franchise, the American fast-food chain announced, following months of dramatically lower sales due to pro-Palestinian boycott action amid the Israel-Hamas war.

The restaurant outlets have been owned by Israeli company Alonyal Limited for more than 30 years.

“An agreement to sell Alonyal to McDonald’s Corporation has been signed,” the McDonald’s statement said Thursday. “Upon completion of the transaction, McDonald’s Corporation will own Alonyal Limited’s restaurants and operations, and employees will be retained on equivalent terms.”

McDonald’s reported its first revenue miss in nearly four years in February, hit by weak sales growth in its division that includes the Middle East. Consumers around the world but particularly in Arab and Muslim-majority countries have boycotted the brand over what they perceive to be its support for Israel, following the move by Israel’s franchise branch to provide free McDonald’s meals to Israeli soldiers deploying to Gaza following the Hamas-led terror attacks of Oct. 7.

In January, McDonald’s CEO Chris Kempczinski described a “meaningful business impact” in the chain’s Middle East market and some areas beyond the region as a result of the war and what he called “associated misinformation” about the company.