McDonald's Buys Israeli Restaurants After Costly Boycotts

Their previous owner sparked controversy by offering free meals for Israeli soldiers.

Exterior of a McDonald's restaurant, Jerusalem, Aug. 16, 2002.
Exterior of a McDonald's restaurant, Jerusalem, Aug. 16, 2002.
AP Photo/David Guttenfelder, File

McDonald's is buying its restaurants in Israel from a longtime franchisee, hoping to reset sales that have slumped due to boycotts in the region.

The Chicago-based burger giant said Friday it will buy Alonyal Limited, which owns and operates 225 restaurants in Israel. Financial terms weren't disclosed. The deal is expected to close in the next few months.

McDonald's said it would operate the restaurants and retain more than 5,000 employees.

"McDonald's remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward," Jo Sempels, McDonald's president of international developmental licensed markets, said in a statement,

Alonyal has operated McDonald's in Israel for more than 30 years. In a statement Friday, Alonyal CEO Omri Padan said the chain is one of the country's most successful.

But Alonyal also sparked controversy in October when it announced on social media that McDonald's was providing free meals for Israeli soldiers. The announcement sparked boycotts in the Middle East and in Muslim-majority countries like Malaysia and Indonesia. McDonald's says sales also were impacted in countries with large Muslim populations, like France.

"So long as this conflict, this war, is going on ... we're not expecting to see any significant improvement in this," McDonald's CEO Chris Kempczinski said in February. "It's a human tragedy, what's going on, and I think that does weigh on brands like ours."

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