McDonald’s CEO addresses impact of Israel-Hamas conflict on Middle East business
Chris Kempczinski, CEO of McDonald’s, has spoken out about the impact of the ongoing conflict between Israel and Hamas on the fast food chain’s business in the Middle East. In a letter posted on LinkedIn, Kempczinski stated that “several markets” in the region are experiencing a “meaningful business impact due to the war and associated misinformation.”
While Kempczinski did not provide specific details about the negative impact on sales, he emphasized the disheartening and ill-founded nature of the situation. He also highlighted the local ownership and operation of McDonald’s franchise locations in the region, stating that the brand is proudly represented by local owner operators who serve and support their communities.
The CEO’s comments come in the wake of a controversy involving a McDonald’s operator in Israel, who had been offering discounts to soldiers and security forces since the October 7 assault by Hamas militants. Many McDonald’s operators in the region quickly distanced themselves from the actions of the Israeli franchise, with franchise groups in Kuwait, Pakistan, and other countries issuing statements to clarify their independence from the controversial operator.
The situation has shed light on McDonald’s franchise model, in which independently owned and operated restaurants make decisions separately from the company. While this approach has helped make McDonald’s a global phenomenon, it also means that the company can’t dictate how each operator responds in a crisis.
McDonald’s is expected to report earnings later this month, which may provide further insight into the impact of the Israel-Hamas conflict on the brand’s business in the Middle East.
This is not the first time a major American brand has addressed the impact of the conflict on its operations. In December 2023, Starbucks CEO Laxman Narasimhan made comments about protests and disruptions affecting the coffee chain’s stores over the Israel-Hamas war. Narasimhan stated that protests were influenced by misrepresentation on social media and confirmed that many stores had experienced incidents of vandalism.
The ongoing conflict has not only taken a toll on the region’s residents but has also had a tangible impact on businesses operating in the area. With major brands like McDonald’s and Starbucks speaking out, the broader implications of the conflict on global business are becoming increasingly apparent.
CNN’s Danielle Wiener-Bronner contributed to this report.