• McDonald’s CEO, Chris Kempczinski, acknowledges a “meaningful business impact” in the Middle Eastern market
• Kempczinski, maintaining impartiality, allows franchisees to operate independently, but protesters anticipate a more pronounced stance against Israeli aggression.
McDonald’s CEO, Chris Kempczinski, announced that the company is facing a “meaningful business impact” in the Middle East due to the ongoing Israeli onslaught in Gaza and associated the losses to “misinformation.” In a LinkedIn post, he expressed disappointment by stating it’s “disheartening and ill-founded,” and clarified that McDonald’s in each country, including Muslim nations, are “represented by local owner operators.” However, he did not provide specific details on the negative effects it has had on sales.
The statement comes after McDonald’s Israel offered discounts and nearly 100,000 free meals to the Israeli Defense Forces. While this was the case in Israel, many McDonald’s operators in the region distanced themselves from this action, emphasizing that each franchise operates independently. Franchise groups in Kuwait, Pakistan, and other countries clarified that they did not share ownership with the Israeli franchise, and some mentioned making financial donations to aid those in Gaza.
The franchise model allows independently owned and operated McDonald’s restaurants to make decisions separately from the company, creating challenges in controlling responses during crises. Unlike Starbucks, McDonald’s corporate has not made any public statements of support or financial contributions to the state of Israel. While Kempczinski has remained impartial allowing franchisees to operate independently, protesters are expecting McDonald’s to take a more hardline stance against Israeli aggression.
McDonalds is expected to report earnings later this month, potentially shedding more light on how the boycott has affected the brand.
In addition, McDonalds has issued the subsequent statement:
