Omri Padan, CEO and owner of the McDonald's franchisee in Israel, Alonyal Ltd., announced on Thursday that he has signed an agreement to sell the company to McDonald's Global.
The agreement is subject to certain conditions, expected to be finalized in the coming months. It is not yet known when Alonyal will officially cease managing the fast food chain.
According to sources familiar with the details of the deal, McDonald's Global plans not to operate the branches directly but to engage in a new franchise agreement, following the business model prevalent in most parts of the world.
Alonyal, which holds and operates McDonald's restaurants in Israel, started its operations in Israel over 30 years ago and currently runs 225 branches, employing 5,000 workers.
"Upon completion of the deal, McDonald's Global will own the network in Israel, and the conditions of the employees will be preserved," Alonyal said in a statement.
Padan said in a press release, "For over 30 years, Alonyal Ltd. is proud to have operated McDonald's in Israel and to serve its millions of customers. McDonald's Israel is the leading and most successful restaurant chain in Israel, and we are deeply grateful to the management, employees, suppliers and customers who made this possible. We are confident in the company's future success."
The first McDonald's branch in Israel (and the Middle East) opened in Tel Aviv’s Ayalon Mall in October 1993 and continues to operate there to this day, alongside another branch that opened in the mall. Omri Padan has been the franchisee of the network in Israel since day one.
Since then, McDonald's has become the largest fast-food chain in Israel and, despite price increases, has enjoyed consistent success. Like IKEA and Zara, it has become a beloved brand among Israelis, who do not always warmly embrace international chains, especially in the fast-food sector.
Despite its junk food image and the industrial taste of its meals, discounts for McDonald's, particularly for McDonald's children's meals, are among the most sought-after in customer clubs and coupon applications.
The franchisee sparked considerable controversy over the years of its operation including refusal to open a branch in the West Bank and legal entanglements regarding the employment of minors and preventing worker unionization.
The issue of kashrut also caused controversy: unlike many other national chains, McDonald's is a non-kosher chain, although it does operate some kosher branches. The chain sells kosher-for-Passover hamburger buns in some of its branches while offering cheeseburgers at a low price in others.