McDonald's will buy all 225 restaurants from Israel franchise following pro-Palestinian boycott fallout

McDonald's signed a deal to purchase all 225 of the restaurants that comprise its Israel franchise, the American fast-food chain announced, following months of dramatically lower sales due to pro-Palestinian boycott action amid the Israel-Hamas war.

The restaurant outlets in Israel have been owned by local licensee Alonyal Ltd., which is owned by Israeli businessman Omri Padan, for more than 30 years.

"An agreement to sell Alonyal to McDonald's Corporation has been signed," the McDonald's statement said Thursday. "Upon completion of the transaction, McDonald's Corporation will own Alonyal Limited's restaurants and operations, and employees will be retained on equivalent terms." The company did not disclose the purchase amount.

McDonald's reported its first revenue miss in nearly four years in February, hit by weak sales growth in its division that includes the Middle East.

Consumers around the world but particularly in Arab and Muslim-majority countries have boycotted the brand over what they perceive to be its support for Israel — which the chain's management denies — following the move by Israel's franchise branch to provide free McDonald's meals to Israeli soldiers after the Hamas-led terror attacks of Oct. 7 that killed roughly 1,200 people in Israel and took a further 253 hostage.

The Israel-Hamas war has now killed at least 33,000 people in the blockaded Gaza Strip, according to the enclave's Health Ministry, and the conflict has triggered what the U.N. and World Health Organization warn is impending famine for more than half a million people.

In January, McDonald's CEO Chris Kempczinski described a "meaningful business impact" in the chain's Middle East market and some countries beyond the region, like Muslim-majority