{"id":4893,"date":"2023-10-24T05:05:32","date_gmt":"2023-10-24T05:05:32","guid":{"rendered":"https:\/\/infundpros.com\/business\/how-mcdonalds-middle-east-franchises-got-into-a-public-feud-over-israel\/"},"modified":"2023-10-24T05:05:32","modified_gmt":"2023-10-24T05:05:32","slug":"how-mcdonalds-middle-east-franchises-got-into-a-public-feud-over-israel","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=4893","title":{"rendered":"How McDonald\u2019s Middle East franchises got into a public feud over Israel"},"content":{"rendered":"
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\n Tensions are playing out at McDonald\u2019s locations across the Middle East as the Israel-Hamas war rages on.\n <\/p>\n

\n In Israel, a local McDonald\u2019s operator has been offering discounts to soldiers, security forces and others since Hamas\u2019 October 7 assault by militants that killed 1,400 people and captured over 220 hostages, according to Israeli authorities. A handful of hostages have since been released. McDonald\u2019s Israel has so far given out 100,000 free meals, according to posts on social media<\/a>.\n <\/p>\n

\n Many McDonald\u2019s operators in the region quickly distanced themselves from the Israeli operator\u2019s actions. Franchise groups in Kuwait, Pakistan and other countries issued statements saying they did not share ownership with the Israeli franchise. And some of those franchises noted they have made financial donations to aid those in Gaza, where more than 5,000 people have been killed since October 7, according to the Palestinian Ministry of Health in Gaza, an organization controlled by Hamas.\n <\/p>\n

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\n At issue is McDonald\u2019s franchise model, in which independently owned and operated restaurants make decisions separately from the company. Customers may be unaware of the distinction and believe an action one location takes is always officially sanctioned by the McDonald\u2019s corporation, or reflective of the positions of other locations.\n <\/p>\n

\n The vast majority of McDonald\u2019s locations are run by local franchise operators. These operators act in many ways as independent businesses: They set wages and prices and, when they feel appropriate, make statements or donations at their discretion. That approach has helped make McDonald\u2019s a global phenomenon, with over 40,000 locations globally, including nearly 27,000 outside of the United States, as of 2022. But it means the company can\u2019t dictate how each operator responds in a crisis, for better or worse.\n <\/p>\n

\n \u201cYou\u2019re seeing the risk play out right now of that business model,\u201d said Andrew Gilman, founder and CEO of CommCore, a consulting group with expertise in crisis communication. \u201cIt\u2019s less control.\u201d\n <\/p>\n

\n As the public feud plays out in the Middle East, McDonald\u2019s corporate hasn\u2019t said much about the war.\n <\/p>\n

\n The company told CNN that it is prioritizing the safety of its franchisees and offering them support, adding that it is making a $1 million donation to be split evenly between the Red Cross and the World Food Program to help those in the region.\n <\/p>\n

\n When American restaurants expand internationally, they typically rely on local franchise operators because regional business owners are better equipped to deal with local dynamics and appeal to local tastes. In doing so, they also cede some control over the business.\n <\/p>\n

\n In a franchise model, \u201cbrands have control over their brand standards, what they\u2019re serving and the quality of the service and all of that,\u201d said Michael Seid, managing director of MSA Worldwide which offers franchise advisory services.\n <\/p>\n

\n \u201cAll McDonald\u2019s has done is license a system,\u201d he said. \u201cThat system isn\u2019t going to say to a franchisee, \u2018By the way, we got a conflict in the United States, or there\u2019s a conflict in Israel, and we don\u2019t want you to do the following.\u2019 They don\u2019t have that control.\u201d\n <\/p>\n

\n But many customers might not be aware of, or care about, the distinction between local operators and the corporate brand. They might just see McDonald\u2019s as McDonald\u2019s.\n <\/p>\n

\n \u201cIn normal peaceful times, that brand recognition is what made them attractive,\u201d to customers across the globe, Seid said. But now, that uniformity could become a liability.\n <\/p>\n

\n Online, McDonald\u2019s operators have made clear that they are independent of each other.\n <\/p>\n

\n \u201cMcDonald\u2019s Pakistan is a wholly Pakistani entity owned and managed by SIZA foods,\u201d reads a statement posted by McDonald\u2019s Pakistan on X<\/a>, formerly Twitter.\n <\/p>\n

\n McDonald\u2019s Kuwait said in a statement, also posted on X<\/a>, that \u201cMcDonald\u2019s Kuwait is a 100% locally owned and operated Kuwaiti company, owned by Al Maousherji Catering Company,\u201d which stands \u201cwith our brothers and sisters in Palestine, especially in Gaza.\u201d The operator said that the local company has made a $250,000 donation to the Kuwait Red Crescent Society \u201cto help with relief efforts in Gaza.\u201d McDonald\u2019s Pakistan also said it has made a donation to help ease the \u201ctragic humanitarian crisis in Gaza.\u201d\n <\/p>\n

\n Other franchise operators have made similar statements and donations.\n <\/p>\n

\n Still, there have been calls for boycotts online, as well as reports of vandalism of McDonald\u2019s locations in the Arab world.\n <\/p>\n

\n No matter how clearly franchise operators state their position, \u201cif somebody incites a mob, their store is at risk,\u201d Gilman said.\n <\/p>\n

\n On a corporate level, McDonald\u2019s should \u201cwatch carefully\u201d how people are reacting to its brand locally and in other markets, to see if customers are drawing conclusions about where it stands. \u201cThey have to monitor that,\u201d he said.\n <\/p>\n

\n In some ways, that lack of control may work in McDonald\u2019s favor, said Evan Nierman, founder and CEO of Red Banyan, a global crisis communications agency.\n <\/p>\n

\n \u201cThey can credibly say they, as a corporate entity, haven\u2019t taken a position one way or another,\u201d Nierman said.\n <\/p>\n

\n Universities in particular are seeing the costs of saying the wrong thing. But not taking a position can also be seen as as making a statement in itself, experts warn.\n <\/p>\n

\n Nierman suspects that many McDonald\u2019s customers might not be paying too much attention either way.\n <\/p>\n

\n \u201cI think the average McDonald\u2019s customer wants to get their fries and McFlurries, and is far less worried about how the brand views a present conflict in the Middle East,\u201d he said.\n <\/p>\n<\/p><\/div>\n