Fast-food giant McDonald’s Corporation MCD has announced that it will be repurchasing all its franchises in Israel. This move comes amidst ongoing tensions in the Middle East, which have had a significant impact on the company’s business.
What Happened: McDonald’s revealed on Thursday that the CEO and owner of Alonyal Limited, Omri Padan, will be selling the company’s franchises in Israel back to the corporation,The Hill reported. Alonyal has been operating McDonald’s in Israel for over 30 years, expanding to 225 restaurants and employing more than 5,000 people.
The employees and restaurant operations will continue under McDonald’s ownership, with the company expressing its commitment to the Israeli market and ensuring a positive experience for both employees and customers.
McDonald’s did not specify the date of the purchase but stated that the closing is subject to certain conditions and will be finalized in the coming months.
The company’s licensed markets business, which includes most of its Middle East locations, only saw a 0.7% increase in the last quarter, a figure that was significantly impacted by the conflict.
Why It Matters: The decision to buy back all franchises in Israel comes after a series of challenges for McDonald’s in the region. The company faced controversy and backlash in 2023, which could potentially impact its brand image and stock performance. This was followed by a rare sales miss in February, attributed to the Israel-Hamas conflict.
On Thursday, the stock closed at $270.20, with a change percent of 0.04% from the previous close of $270.09. The stock’s 52-week high was $302.39, and the 52-week low was $245.73.
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