McDonald’s to buy back all franchises in Israel

McDonald’s announced Thursday that Omri Padan, CEO and owner of Aronyaru Limited, will sell the Israeli franchise to the company.

Aronial started McDonald’s operations in Israel more than 30 years ago and has now “grown the business to 225 restaurants and more than 5,000 employees.” Employees and restaurant operations will continue on equal terms. McDonald’s said in a statement.

“For over 30 years, Aronyar Limited has brought the Golden Arches to Israel and is proud to serve our community. We have grown the brand into Israel’s most successful leading restaurant chain, I would like to thank our management team, employees, suppliers and customers for making this possible,” Padan said in a statement. “We are encouraged by what lies ahead.”

Joe Sempers, McDonald’s President of International Development and Licensing Markets, said in a statement that the company is grateful for Aronyaru’s business and brand in Israel over the past 30 years.

“McDonald’s remains focused on the Israeli market and remains committed to ensuring a positive employee and customer experience in the market,” Sempers said.

McDonald’s did not provide a timeline for the acquisition, but said the closing date is subject to certain conditions and would be completed within the next few months.

McDonald’s said in February that ongoing tensions in the Middle East were hurting its business. The company said in its fourth quarter and full year 2023 report that its License Markets business, which includes most of its Middle East locations, grew only 0.7% last quarter.

The company said the low numbers reflected the “effects of the war” between Israel and Hamas. The fast-food chain came under intense scrutiny after McDonald’s Israel distributed thousands of free meals to Israeli troops and citizens in the wake of the Hamas attack on October 7.

The move sparked a boycott of the company in protest of Israeli counterattacks and continued shelling of the Gaza Strip, which has killed more than 32,000 people.