New details were revealed on Monday, show that the sale of McDonald's franchise in Israel to the global corporate was negotiated and agreed within only two months.
In early February, the McDonald's Corporation offered to buy out the Israeli franchise Alonyal Limited owned by Omri Padan for over 30 years, and its 225 branches. The company hired a media consultant out of concern that the agreement would be viewed as an attempt to avoid the pro-Palestinian boycott on it after the local franchise was seen as supporting the IDF in the war in Gaza.
After the corporation's financial reports for its first quarterly sales were published, McDonald's admitted it had suffered financially and that global sales were down as a result of the boycott.
Sources close to McDonald's executive board said the search was on for a new owner for the franchise.
“McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward,” Jo Sempels, president of International Developmental Licensed Markets at McDonald’s Corporation, said in a statement.
As is common in agreements with international brands and local franchises, it is likely that the agreement Padan had with McDonald's prohibited involvement of the franchise or its owners, in political or security conflicts that may adversely impact the brand. According to sources close to the sales agreement, Padan who is highly valued by the corporation, may have taken liberties in his interpretation of such a clause and his public support for the IDF did not leave his American partners indifferent to the outcome.
The Israeli franchise is profitable and successful and according to latest reports, its sales exceeded 1.5 billion dollars in the past year. However, the loss globally and the potential damage to the brand, prompted the decision to remove the Israeli franchise owner. Should McDonald decide to close its Israeli franchise all together, the loss to its global revenue would be minimal, however that is not considered a likely move.