McDonalds buys its 225 Israel franchises as Gaza war has 'significant business impact'

McDonald’s is set to buy back the 225 restaurant franchises it has in Israel, the company announced on Thursday.

The fast food giant said it had reached an agreement with Israeli franchisee Alonyal to acquire its franchised McDonald's in the country.

Following the deal, Omri Padan, CEO and owner of Alonyal, said: "For more than 30 years, Alonyal Limited has been proud to bring the brand to Israel and serve our communities."

McDonald's added in the statement that it "remains committed to the Israeli market and to ensuring a positive experience for employees and customers in the market in the future."

It comes after Alonyal offered discounts to Israeli soldiers and security forces following the October 7 attacks, in which Hamas fighters killed more than 1,200 Israeli soldiers and civilians and kidnapped about 200 more, ITV News' US partner CNN reports.

As a franchisee, Alonyal acts as an independent company, setting wages and prices and making statements or donations at their discretion.

Most McDonald's stores around the world are managed by local franchise operators.

Many McDonald's operators in the region quickly distanced themselves from the Israeli branch's actions, CNN says.

Franchise groups in Kuwait and Pakistan, issued statements saying they did not share ownership with the Israeli franchise.

McDonald's has also been hit by customer boycotts in the region.

In January, CEO Chris Kempczinski said the company was experiencing a “significant business impact” in the Middle East due to the war between Israel and Hamas.

During its last earnings report in February, McDonald's doubled down and said the conflict would likely continue to weigh on its business.

In his January statement, Mr Kempczinski said: "In every country where we operate, including Muslim countries, McDonald's is proud to be represented by local owner-operators."

Following Hamas' incursion on Israel, the country's launched a military offensive on Gaza, the number of people killed in the territory during the conflict has now surpassed 33,000.

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