McDonald's Reacquires Ownership of 225 Restaurants in Israel by Purchasing Its 30-Year-Old Franchise from Alonyal Ltd

The Paper Break Apr 05, 2024
McDonald's Reacquires Ownership of 225 Restaurants in Israel by Purchasing Its 30-Year-Old Franchise from Alonyal Ltd

McDonald's is in the process of acquiring its 30-year-old franchise in Israel from Alonyal Ltd, reclaiming ownership of 225 restaurants across the country.

The specifics of the transaction have not been disclosed, but McDonald's has indicated that the deal is contingent upon undisclosed conditions. Alonyal has been managing McDonald's outlets in Israel for over three decades, currently overseeing 225 franchised establishments with more than 5,000 employees, who will remain onboard following the sale. The finalization of the deal is anticipated in the upcoming months.

Following the offer of thousands of complimentary meals to Israeli soldiers at its Israeli locations, McDonald's faced boycott calls. CEO Chris Kempczinski acknowledged the impact of the boycott on the company's earnings, without providing further details.

McDonald's reported disappointing sales figures for the fourth quarter of the year, particularly noting a 0.7% decline in comparable sales in franchised restaurants outside the United States. Kempczinski highlighted the most significant impact in the Middle East, with effects also observed in other Muslim-majority countries such as Malaysia, Indonesia, and France, particularly in neighborhoods with significant Muslim populations.

On Thursday, McDonald's shares experienced a nearly 2% decrease in after-market trading. Despite this setback, McDonald’s global presence remains strong, with over 40,000 locations worldwide, 90% of which are operated independently by franchisees. These franchisees have the authority to establish pricing, develop promotional campaigns, and manage staffing.

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