McDonald's to buy back all its Israeli restaurants

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Canada is one of the countries that has seen anti-chain protests

Fast food giant McDonald's is to buy back all of its Israeli restaurants after the brand was boycotted in response to the Israel-Hamas war.

The company said it has signed an agreement with franchisee Aloniel to take back 225 outlets across the country, employing 5,000 people.

McDonald's came under fire after Alonyal began handing out thousands of free meals to Israeli soldiers.

Sales in the region have fallen since the conflict began in October.

On Thursday, McDonald's signed an agreement with Aloniel, which has operated a chain of Golden Arches in Israel for more than 30 years.

The US company said restaurants, operations and staff would be retained on “equal terms” and that it would remain “committed to the Israeli market”. Terms of sale were not disclosed.

The boycott was prompted after Muslim-majority countries such as Kuwait, Malaysia and Pakistan issued statements distancing themselves from the organization, which is seen as pro-Israel.

As the grassroots boycott spread beyond the Middle East, vocal protests were held around the world.

The global food chain admitted in January that it had “significantly impacted” its performance with business in France, Indonesia and Malaysia, despite its business in the Middle East being badly hit.

Chief Executive Chris Kempczynski blamed the setback on “misinformation,” but it bottomed out and the company missed its first quarterly sales target in nearly four years.

The boycott was described by McDonald's as “disgruntled and ill-founded”. The company relies on thousands of independent businesses to own and operate most of its more than 40,000 stores worldwide. About 5% are located in the Middle East.

“McDonald's is proudly represented by local franchise operators in every country we operate in, including Muslim countries,” Mr Kempczynski said.

“As long as this war is going on… we don't expect any significant progress [in these markets],” the McDonald's boss added.

The company believes that by bringing the Israeli business back “in-house” it can restore its reputation in the Middle East and once again meet its key sales targets.

Much of the Gaza Strip was destroyed during Israeli military operations that began on October 7 after Hamas-led gunmen attacked southern Israel, killing about 1,200 people and taking 253 hostages.

About 130 hostages are being held captive, at least 34 of whom are presumed dead.

More than 33,000 people have been killed in Gaza so far, according to the territory's Hamas-run health ministry.

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