McDonald’s has agreed to purchase all 225 of the restaurants in its Israel franchise following months of Pro-Palestinian boycott action amid the Hamas and Israel war which has led to much lower sales for the fast food chain.

McDonald’s has signed a deal with Israeli company Alonyal Limited, owned by Israeli businessman Omri Padan, which oversaw McDonald’s operations in the country in the 30 years since the brand was first introduced there.

Some consumers have boycotted McDonald’s over what they perceive to be its support for Israel. But the company denies this.

Alonyal, which owns and operates McDonald’s restaurants in Israel, started the McDonald’s brand journey in Israel more than three decades ago and has grown the business to 225 restaurants and more than 5,000 employees.

Upon completion of the transaction, McDonald’s Corporation will own Alonyal Limited’s restaurants and operations, and employees will be retained on equivalent terms, according to McDonald’s.

“Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities. We’ve grown the brand to be the leading and most successful restaurant chain in Israel and are grateful to our management, employees, suppliers, and customers who made this possible. We are encouraged by what the future holds,” says Padan, CEO of Alonyal Limited.

“We thank Alonyal Limited for building the McDonald’s business and brand in Israel over the past three decades. McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward,” adds Jo Sempels, president of International Developmental Licensed Markets at McDonald’s Corporation.

Turmoil in Middle East takes toll on sales
The agreement is subject to certain conditions, with closing anticipated in the coming months.

In February, McDonald’s reported mixed Q4 results amid a lag in some international markets, including

The company said at the time that the conflict in the Middle East had hit its sales in the region.

A furor erupted earlier when Padan offered free meals to Israeli forces around the start of the Israel-Gaza war in October 2023. This led to some Muslim-majority countries like Kuwait, Malaysia and Pakistan distancing themselves from what they saw as support of Israel.