Fast food giant McDonald's said Thursday it would buy back all of its 225 restaurants in Israel after an agreement with franchise Alonyal Limited, which has operated the business for 30 years following a widespread boycott of the brand due to Israel's war on Gaza.
The U.S. fast-food chain faced calls for a boycott and was criticized online since Alonyal gave away thousands of free meals to Israeli forces following Israeli attacks on the Gaza Strip after Oct. 7.
The Israeli attacks have killed more than 33,000 people so far, mostly women and children, according to health authorities in Gaza.
The fast food giant in a statement said Alonyal employs 5,000 people across the country, all of whom will be retained after the completion of the transaction in the coming months.
"Upon completion of the transaction, McDonald’s Corporation will own Alonyal Limited’s restaurants and operations, and employees will be retained on equivalent terms," it said in a press release.
"McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward," said Jo Sempels, president of International Developmental Licensed Markets at McDonald’s Corporation.
The agreement is subject to certain conditions, with closing anticipated in the coming months.
McDonald’s franchises are often owned and operated locally. Its CEO Chris Kempczinski earlier said the conflict in Gaza was hurting its business.
Earlier this year, the company announced its first quarterly sales target miss in nearly four years, drowned on weak sales growth at its international business division and partly due to the conflict in the Middle East and boycott campaigns toward some Western goods.
Other brands such as Seattle-based coffee chain Starbucks were among others whose businesses were impacted following the start of the now six-month military campaign on Gaza.
AlShaya Group, a Gulf retail giant that owns the rights to operate the Middle East business of Starbucks was reportedly planning to lay off over 2,000 people in the Middle East and North Africa (MENA), as the operations take a hit from consumer boycotts tied to the war on Gaza, according to a Reuters report last month, citing people familiar with the matter.
Israel has pounded the Gaza Strip since a cross-border attack by Hamas, which Tel Aviv says killed nearly 1,200 people.
The Israeli war on Gaza has pushed 85% of the territory's population into internal displacement amid acute shortages of food, clean water, and medicine, while 60% of the enclave's infrastructure has been damaged or destroyed, according to the U.N.
Israel stands accused of genocide at the International Court of Justice (ICJ). An interim ruling in January ordered Tel Aviv to stop genocidal acts and take measures to guarantee that humanitarian assistance is provided to civilians in Gaza.
Hostilities have continued unabated, however, and aid deliveries remain woefully insufficient to address the humanitarian catastrophe although Israel said Friday it would be taking steps to increase the flow of humanitarian aid into the Gaza Strip as it faces deepening isolation from the international community that escalated even further after the death of seven aid workers in Gaza earlier this week.