Summary
Introduction
In recent times, McDonald’s, the global fast-food giant, has found itself at the centre of controversy due to its perceived complicity in the Israel-Palestine conflict. This article aims to shed light on the issue, focusing on the actions of McDonald’s Israel and the subsequent reactions from McDonald’s franchises in the Middle East. It also explores the complexities of the franchise model that McDonald’s operates under.
McDonald’s Israel and the Israel-Palestine Conflict
In the wake of the war between Israel and Palestine, McDonald’s Israel began offering discounts to Israeli soldiers, security forces, and others. According to social media posts, McDonald’s Israel has given out 100,000 free meals. This move sparked outrage and calls for a boycott of the brand.
The Response from McDonald’s Franchises in the Middle East
The actions of McDonald’s Israel were met with swift condemnation from McDonald’s franchises in the Middle East. Franchise groups in Kuwait, Pakistan, and other countries issued statements distancing themselves from the Israeli operator’s actions. Many of these franchises noted that they have made financial donations to aid those in Gaza.
The Complexity of the McDonald’s Franchise Model
McDonald’s operates under a heavily franchised business model. As of 2022, over 60% of the total revenues came from franchised restaurants. The company’s long-term goal is to transition toward 95% of franchised restaurants. This model allows local franchise operators to make decisions separately from the company.
However, this independence comes with a cost. The monthly fees payable by 80% of restaurants franchised between May 2018 and June 2019 ranged between 12.25% and 21% of that restaurant’s net sales. There is an additional monthly royalty of 5% of the net sales for the use of the McDonald’s system. Furthermore, there is a contribution to the marketing fund which is currently set at 4.3% of net sales.
McDonald’s Statement
McDonald’s Corporation has issued a statement stating that they are “dismayed by the disinformation and inaccurate reports regarding our position in response to the conflict in the Middle East. McDonald’s Corporation is not funding or supporting any governments involved in this conflict, and any actions from our local Developmental Licensee business partners were made independently without McDonald’s consent or approval. Our hearts are with all of the communities and families impacted by this crisis. We abhor violence of any kind and firmly stand against hate speech, and we will always proudly open our doors to everyone. We are doing everything we can to ensure the safety of our people in the region while supporting the communities where we operate.”
However, it’s important to note that while McDonald’s Corporation may not directly support any governments involved in the conflict, the actions of their franchisees can have significant impacts. As mentioned earlier, McDonald’s operates under a heavily franchised business model, which allows local franchise operators to make decisions independently from the company. This means that actions taken by one franchise, such as McDonald’s Israel, can impact the brand globally, even if these actions were made without the corporation’s consent or approval. This complexity adds another layer to the controversy and is something to consider when discussing the call for a boycott.
Conclusion
The controversy surrounding McDonald’s involvement in the Israel-Palestine conflict highlights the complexities of operating a global franchise. While McDonald’s Israel’s actions have sparked outrage and calls for boycotts, it’s important to remember that McDonald’s franchises around the world operate independently and have their own policies. Boycotting a global brand like McDonald’s may seem like a powerful statement, but it’s essential to understand the nuances of the situation and consider the broader implications of such actions.
References
(1) How McDonald’s Middle East franchises got into a public feud over Israel. https://www.cnn.com/2023/10/23/business/mcdonalds-israel-middle-east/index.html.
(2) The McDonald’s Global Empire Is Tearing Itself Apart Over Israel-Palestine. https://www.vice.com/en/article/xgw7da/the-mcdonalds-global-empire-is-tearing-itself-apart-over-israel-palestine.
(3) McDonald’s caught up in Israel-Hamas war as franchisees in the Middle …. https://www.msn.com/en-us/news/world/mcdonalds-caught-up-in-israel-hamas-war-as-franchisees-in-the-middle-east-pledge-aid-to-different-sides/ar-AA1ijqst.
(4) McDonald’s Heavy Franchised Business Model In A Nutshell. https://fourweekmba.com/mcdonalds-business-model/.
(5) McDonald’s Business Model and Marketing Strategies Explained – JungleWorks. https://jungleworks.com/mcdonalds-business-model-and-marketing-strategies-explained/.
(6) Business Model of McDonald’s and How it Makes Money. https://www.marketing91.com/business-model-of-mcdonalds/.
(7) Insight into McDonald’s Business Model | IIDE. https://iide.co/case-studies/mcdonalds-business-model/.
(8) McDonald’s Faces Boycott for Giving Israeli Soldiers Free Food – Newsweek. https://www.newsweek.com/mcdonalds-faces-boycott-giving-israeli-soldiers-free-food-1834506.