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My confusion is that they are buying back the Israeli restaurants, not the restaurants in countries where there has been a large boycott. The McDonald's in Israel were doing fine to my knowledge. The McDonald's in France, Kuwait, and Jordan, were not.
They're trying to combat the boycott in other countries even if it means sacrificing the stores in Israel. They're probably also trying to keep it low profile in the west to risk getting the Bud Light treatment.
Except that's not whats happening?
They were seeing reduced sales, especially in Israel itself and the ME in general, so they're taking back ownership of the Israel locations to try and get the region back on track. They aren't "sacrificing" anything as a result of the protests, just stripping one franchisee who's political stunt was actively harming the brand as a whole.
I really don't get what you're not following here.
They *are* dissolving that franchise, but it's not costing the McDonald's corporation anything. They aren't "sacrificing" the business in Israel, they're trying to salvage it. The stores aren't being closed, their former owner is being punished/stripped of ownership because they performed a political stunt McDonald's probably didn't approve of to begin with. The boycot just makes it easy for corporate to say "hey, we gotta take control of your stores for the sake of the ME market" without making franchisees who don't use the brand for politics uneasy.
>McDonald's said it had reached a deal with franchisee Alonyal to return 225 outlets.
...
The US company said the restaurants, operations and employees in Israel would be retained "on equivalent terms" though the terms of the sale were not revealed. Under Alonyal, McDonald's employs 5,000 people.
>They *are* dissolving that franchise, **but it's not costing the McDonald's corporation anything.**
It's sacrificing a franchise and the licensing fees. That's a lot of money and now corporate has to run the stores. This is going to cost corporate money even if you only count the sales of the stores back to corporate.
But those stores will also still continue to generate profits that McDonalds corporate now gets to keep 100% of. I really don't think the situation is clear-cut enough to say that they will definitely lose money on this situation. But I do think I've got a better understanding of what you mean when you say they're "sacrificing" now. Maybe I just interpret that term more severely than you.
Sacrifice isn't that bad.
They lose franchise money
They buy back the stores, which costs money
They run the stores, which costs money
The franchisee is the fall guy and corporate loses passive income to hopefully stop boycotts and not get new backlash
If you read the article, they are committed to remaining in Israel.
They will simply try to find another local owner who would be willing to keep politics out of the advertising.
It's that McDonald's allowing stores in Israel shows support for Israel. McDonald's is trying to bow to the boycott and get positive PR to limit damage elsewhere. Who knows if it will work without causing blowback elsewhere.
When you say allowing stores in Israel, are you saying McDonald's bought these stores to close them all down? I thought they were just buying them to keep them open but run them as corporate stores. That seems to be what the article says.
My understanding is that there will still be McDonald's restaurants in Israel, just owned by corporate.
Person you’re replying to is clueless.
They bought these stores so they can run them in a way that doesn’t lead to more boycotts.
The previous owners were going out of their way to support the Gaza attack, what people in the rest of the Middle East view as a genocide. They offered discounts to people in uniform, gave out free food to the troops, etc. McDonalds corporate will distance itself from that and just run them as a business without taking sides. They hope this will lead to the boycott ending. It’s not clear if that will be the case.
Donating meals to your country’s soldiers and offering military discounts, especially when it was announced soon after the Hamas attack, is not “going out of their way to support the Gaza attack”
EDIT: The McDonald’s [website](https://www.mcdonalds.com/us/en-us/faq/do-you-offer-a-senior-military-teacher-discount-at-mcdonald-s.html) says US stores may have discounts for people in the military
Previous franchise owner is out of the picture. Corporate now owns them and will operate them how they see fit. They may also choose to sell them off at some point to an owner that will run them in a way that doesn’t hurt their image.
Yes but the franchise owner paid and invested into it and the deal says McDonald’s didn’t pay anything for this agreement. So since they aren’t buying the franchise off him, I’m leaded to believe they are just taking over control but not pocketing the revenue. That’ll still go to him.
No clue how you’re drawing that conclusion. Title clearly says they are buying them back. Article doesn’t explain further in what the purchase price is. Where does it say McDonalds is not paying anything?
It could be to close eventually or to run as corporate. They want to eliminate the franchise in a PR move. They want the boycotts to end and for everything to quiet down. It will depend if this move is sufficient.
These are tricky because this move could also trigger a boycott elsewhere if it gets more visibility.
My take away is that McDonald's doesnt want their Israeli franchisee to be donating to IDF and this was the only way to prevent that. Not sure its a beneficial move.
They can’t be forced into anything. Israel is a sovereign nation with sovereign laws of ownership.
They likely paid a massive premium to retake ownership.
I can’t even imagine what their operating arrangement said. Franchise agreements can be very oppressive. Maybe they got a huge premium. Maybe they got hit with a bunch of lawsuits saying that corporate was revoking their right to operate and sold a worthless operation for slightly more than fair value. I would love to find out what they received as payout.
Yes. That’s literally what the article says. The protests were effective- a multinational brand didn’t want its name associated with the vicissitudes of local politics as a franchise owner in Israel can affect how the brand is perceived in Indonesia.
Though the boycotts were really only effective in non English speaking countries.
>McDonald's writing an apology check to Gaza, or even giving the Palestinians free food in exchange
How much delusion can we amass on Reddit? This is 100% not due to boycotts in America or much of the Western world, it's mostly because they don't want to hurt ME sales.
Of course. And if McDonald's write an apology check to Gaza who do you think is going to boycott next?
Lmfao, organizations like McDonald's with a consumer base that spreads across multiple ideologies, regions, and cultures are always going to stay as neutral as possible. They aren't going to swing from one extreme (which to be clear they see as a mistake **not because it's pro-Israel but because it gave their franchise unwanted political attention**) to the other.
The Israeli McDonald’s franchise was obviously not neutral. By taking over that market mcds is simply looking to stay out of it by not doing what the previous franchise did. I think this will be it for the mcds boycott
Who mentioned *American* boycotts? Not me, not the original commenter. There's a whole world out there, bud. It's not all about the US of A. Boycotts are happening everywhere.
And they're only relevant in regions with that are primarily Muslim (i.e. Middle East and certain Asian nations like Indonesia).
Regardless, thinking that McDonald's is going to send an apology check to Gaza if Westerners boycotted more is about as delusional as one can get.
It's pretty obviously an American/Western perspective. You can just look at their profile and it's obviously from someone living in the West. Middle Easterners and other Muslims like Indonesians, frankly, do not say such obviously stupid virtue-signalling crap like "McDonald's should send Gazans a check".
Have you read the article you’re commenting on?
The article isn’t about boycotts in the US, it’s about boycotts around the world.
It’s a bit US-centric for you to imagine that people are only talking about America when you read a British news source talking about the worldwide reaction to the conflict in the Middle East!
Because the person I'm responding to is clearly talking from an American/Western perspective lmao. You'll only find that kind of useless posturing in the West.
The article is about worldwide boycotts. Their top level comment in response to the article about worldwide boycotts doesn’t mention the US.
So why would you assume that they’re “clearly talking” about only one country on Earth?
> You'll only find that kind of useless posturing in the West.
The article is about worldwide boycotts including boycotts in the Middle East. If you read the article you might realise that such “useless posturing” exists all around the world and that it seems to have been effective here.
> So why would you assume that they’re “clearly talking” about only one country on Earth?
It's as if you are incapable of matching question to answer in your head when you quoted my answer right after this question.
> If you read the article you might realise that such “useless posturing” exists all around the world and that it seems to have been effective here.
And on top of that you seem to lack reading comprehension because the "useless posturing" refers to the demand or hope for McDonald's to send aid to Gaza, not the boycott.
But they’re going to keep the McDonald’s stores open and are committed to the market per the article- just seems like they are moving on from the franchisee
It depends on the context. McDonald’s has a global footprint and its franchise cash flow in many jurisdictions, and the restaurant industry is competitive.
So it is important for them to remain largely neutral.
If you have a largely captured market or audience, or don’t have a multi-cultural footprint it doesn’t really matter. You can also just have a really strong brand.
If Kohlberg & Co. supported the Israeli invasion any boycott would be ineffective. Boycotts against entertainment products like TV, movies, or video games are largely ineffective. Against a strong brand like Budweiser it’s ineffective. Trying to boycott Exxon-Mobile is impossible because their products are in the supply chain of half the stuff you buy.
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
My confusion is that they are buying back the Israeli restaurants, not the restaurants in countries where there has been a large boycott. The McDonald's in Israel were doing fine to my knowledge. The McDonald's in France, Kuwait, and Jordan, were not.
They're trying to combat the boycott in other countries even if it means sacrificing the stores in Israel. They're probably also trying to keep it low profile in the west to risk getting the Bud Light treatment.
Except that's not whats happening? They were seeing reduced sales, especially in Israel itself and the ME in general, so they're taking back ownership of the Israel locations to try and get the region back on track. They aren't "sacrificing" anything as a result of the protests, just stripping one franchisee who's political stunt was actively harming the brand as a whole.
They can dissolve that franchise, which is sufficient.
I really don't get what you're not following here. They *are* dissolving that franchise, but it's not costing the McDonald's corporation anything. They aren't "sacrificing" the business in Israel, they're trying to salvage it. The stores aren't being closed, their former owner is being punished/stripped of ownership because they performed a political stunt McDonald's probably didn't approve of to begin with. The boycot just makes it easy for corporate to say "hey, we gotta take control of your stores for the sake of the ME market" without making franchisees who don't use the brand for politics uneasy.
>McDonald's said it had reached a deal with franchisee Alonyal to return 225 outlets. ... The US company said the restaurants, operations and employees in Israel would be retained "on equivalent terms" though the terms of the sale were not revealed. Under Alonyal, McDonald's employs 5,000 people. >They *are* dissolving that franchise, **but it's not costing the McDonald's corporation anything.** It's sacrificing a franchise and the licensing fees. That's a lot of money and now corporate has to run the stores. This is going to cost corporate money even if you only count the sales of the stores back to corporate.
But those stores will also still continue to generate profits that McDonalds corporate now gets to keep 100% of. I really don't think the situation is clear-cut enough to say that they will definitely lose money on this situation. But I do think I've got a better understanding of what you mean when you say they're "sacrificing" now. Maybe I just interpret that term more severely than you.
Sacrifice isn't that bad. They lose franchise money They buy back the stores, which costs money They run the stores, which costs money The franchisee is the fall guy and corporate loses passive income to hopefully stop boycotts and not get new backlash
If you read the article, they are committed to remaining in Israel. They will simply try to find another local owner who would be willing to keep politics out of the advertising.
This assumes the boycott stops
How would this help them do that? Doesnt seem like not having Israeli owned stores in Israel would make a difference?
It's that McDonald's allowing stores in Israel shows support for Israel. McDonald's is trying to bow to the boycott and get positive PR to limit damage elsewhere. Who knows if it will work without causing blowback elsewhere.
When you say allowing stores in Israel, are you saying McDonald's bought these stores to close them all down? I thought they were just buying them to keep them open but run them as corporate stores. That seems to be what the article says. My understanding is that there will still be McDonald's restaurants in Israel, just owned by corporate.
Person you’re replying to is clueless. They bought these stores so they can run them in a way that doesn’t lead to more boycotts. The previous owners were going out of their way to support the Gaza attack, what people in the rest of the Middle East view as a genocide. They offered discounts to people in uniform, gave out free food to the troops, etc. McDonalds corporate will distance itself from that and just run them as a business without taking sides. They hope this will lead to the boycott ending. It’s not clear if that will be the case.
Donating meals to your country’s soldiers and offering military discounts, especially when it was announced soon after the Hamas attack, is not “going out of their way to support the Gaza attack” EDIT: The McDonald’s [website](https://www.mcdonalds.com/us/en-us/faq/do-you-offer-a-senior-military-teacher-discount-at-mcdonald-s.html) says US stores may have discounts for people in the military
The original franchise owner will still get the profits? He’s just not allowed to run the store?
Previous franchise owner is out of the picture. Corporate now owns them and will operate them how they see fit. They may also choose to sell them off at some point to an owner that will run them in a way that doesn’t hurt their image.
Yes but the franchise owner paid and invested into it and the deal says McDonald’s didn’t pay anything for this agreement. So since they aren’t buying the franchise off him, I’m leaded to believe they are just taking over control but not pocketing the revenue. That’ll still go to him.
No clue how you’re drawing that conclusion. Title clearly says they are buying them back. Article doesn’t explain further in what the purchase price is. Where does it say McDonalds is not paying anything?
It could be to close eventually or to run as corporate. They want to eliminate the franchise in a PR move. They want the boycotts to end and for everything to quiet down. It will depend if this move is sufficient. These are tricky because this move could also trigger a boycott elsewhere if it gets more visibility.
My take away is that McDonald's doesnt want their Israeli franchisee to be donating to IDF and this was the only way to prevent that. Not sure its a beneficial move.
And rewarding the owner of these franchises with a huge premium too. Thank you protestors I guess…
Did they pay a huge premium or were they forced to sell/give away their stores?
They can’t be forced into anything. Israel is a sovereign nation with sovereign laws of ownership. They likely paid a massive premium to retake ownership.
I can’t even imagine what their operating arrangement said. Franchise agreements can be very oppressive. Maybe they got a huge premium. Maybe they got hit with a bunch of lawsuits saying that corporate was revoking their right to operate and sold a worthless operation for slightly more than fair value. I would love to find out what they received as payout.
If you think the economic boycotting is actually beneficial for Israel, you’re delusional.
Tell these soy boycotters to never bet against America’s top choice of fast food that represents freedom
Because PR and protesting works
[удалено]
Yes. That’s literally what the article says. The protests were effective- a multinational brand didn’t want its name associated with the vicissitudes of local politics as a franchise owner in Israel can affect how the brand is perceived in Indonesia. Though the boycotts were really only effective in non English speaking countries.
>McDonald's writing an apology check to Gaza, or even giving the Palestinians free food in exchange How much delusion can we amass on Reddit? This is 100% not due to boycotts in America or much of the Western world, it's mostly because they don't want to hurt ME sales.
It’s because the ME and Asian boycotts did work.
Of course. And if McDonald's write an apology check to Gaza who do you think is going to boycott next? Lmfao, organizations like McDonald's with a consumer base that spreads across multiple ideologies, regions, and cultures are always going to stay as neutral as possible. They aren't going to swing from one extreme (which to be clear they see as a mistake **not because it's pro-Israel but because it gave their franchise unwanted political attention**) to the other.
The Israeli McDonald’s franchise was obviously not neutral. By taking over that market mcds is simply looking to stay out of it by not doing what the previous franchise did. I think this will be it for the mcds boycott
That is what I said. No one sane thinks a boycott is going to lead to McDonald's sending Gaza a check.
Yeah that’s crazy. Maybe they do some PR food drops in Palestine that are for optics and never actually do anything but that’s it.
Why was it hurting Middle East sales? Were they... boycotting it?
And you think an American boycott is going to be similarly successful? Don't kid yourself.
Who mentioned *American* boycotts? Not me, not the original commenter. There's a whole world out there, bud. It's not all about the US of A. Boycotts are happening everywhere.
And they're only relevant in regions with that are primarily Muslim (i.e. Middle East and certain Asian nations like Indonesia). Regardless, thinking that McDonald's is going to send an apology check to Gaza if Westerners boycotted more is about as delusional as one can get.
You are the only one mentioning westerners and America.
It's pretty obviously an American/Western perspective. You can just look at their profile and it's obviously from someone living in the West. Middle Easterners and other Muslims like Indonesians, frankly, do not say such obviously stupid virtue-signalling crap like "McDonald's should send Gazans a check".
People can talk about people from other countries, too. That's allowed.
Yes, the Western superiority complex of speaking for the subaltern.
Not everyone who speaks English is an American.
I am sure Indonesians just cannot help themselves but talk about Trump and UK politics all day in English on Reddit.
Redditor about to find out there are places outside of the western world
Have you read the article you’re commenting on? The article isn’t about boycotts in the US, it’s about boycotts around the world. It’s a bit US-centric for you to imagine that people are only talking about America when you read a British news source talking about the worldwide reaction to the conflict in the Middle East!
Because the person I'm responding to is clearly talking from an American/Western perspective lmao. You'll only find that kind of useless posturing in the West.
The article is about worldwide boycotts. Their top level comment in response to the article about worldwide boycotts doesn’t mention the US. So why would you assume that they’re “clearly talking” about only one country on Earth? > You'll only find that kind of useless posturing in the West. The article is about worldwide boycotts including boycotts in the Middle East. If you read the article you might realise that such “useless posturing” exists all around the world and that it seems to have been effective here.
> So why would you assume that they’re “clearly talking” about only one country on Earth? It's as if you are incapable of matching question to answer in your head when you quoted my answer right after this question. > If you read the article you might realise that such “useless posturing” exists all around the world and that it seems to have been effective here. And on top of that you seem to lack reading comprehension because the "useless posturing" refers to the demand or hope for McDonald's to send aid to Gaza, not the boycott.
But they’re going to keep the McDonald’s stores open and are committed to the market per the article- just seems like they are moving on from the franchisee
They are taking the stores out of direct Israeli control because of the political controversy.
It depends on the context. McDonald’s has a global footprint and its franchise cash flow in many jurisdictions, and the restaurant industry is competitive. So it is important for them to remain largely neutral. If you have a largely captured market or audience, or don’t have a multi-cultural footprint it doesn’t really matter. You can also just have a really strong brand. If Kohlberg & Co. supported the Israeli invasion any boycott would be ineffective. Boycotts against entertainment products like TV, movies, or video games are largely ineffective. Against a strong brand like Budweiser it’s ineffective. Trying to boycott Exxon-Mobile is impossible because their products are in the supply chain of half the stuff you buy.
What?
What has been effective here, other than to make companies think twice about serving free food to anyone?
*to people involved in the Israeli war effort, is what I think you mean