McDonald's CEO says 'misinformation' about Israel-Gaza stance has hurt business

McDonald's CEO said Thursday that the fast-food chain is seeing a "meaningful business impact" in relation to the Israel-Hamas war.

In a letter posted on LinkedIn, Chris Kempczinski said that “several markets” across the Middle East are “experiencing a meaningful business impact due to the war and associated misinformation” affecting the American fast food chain.

“This is disheartening and ill-founded,” he said.

Mr Kempczinski didn’t provide specifics, including how much sales are being negatively affected.

However, he added: “In every country where we operate, including in Muslim countries, McDonald’s is proudly represented by local owner operators who work tirelessly to serve and support their communities while employing thousands of their fellow citizens.”

His comments come a few months after a McDonald’s operator in Israel had been offering discounts to soldiers, security forces and others since the October 7 assault by Hamas militants in Israel.

Many McDonald’s operators in the region quickly distanced themselves from the Israeli operator’s actions.

Franchise groups in Kuwait, Pakistan and other countries issued statements saying they did not share ownership with the Israeli franchise, and some of those franchises noted they have made financial donations to aid those in Gaza.

At issue is McDonald’s franchise model, in which independently owned and operated restaurants make decisions separately from the company.

The vast majority of McDonald’s locations are run by local franchise operators.

These operators act in many ways as independent businesses: They set wages and prices and, when they feel it appropriate, make statements or donations at their discretion.

McDonald’s is expected to report earnings later this month, when it can reveal more about the issues mentioned by Mr Kempczinski.

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