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McDonald's said it was experiencing a “significant business impact” in the Middle East due to the war between Israel and Hamas, joining Starbucks in issuing public statements to clear up misunderstandings and boycotts affecting the brands.
In a letter posted on LinkedIn, McDonald's CEO Chris Kempczinski said that “several markets” in the Middle East “are experiencing a significant business impact on the American fast food chain as a result of the war and related misinformation.” “This is discouraging and unfounded,” he said.
Kempczinski did not provide any further information, including how much sales would be negatively affected. He stated: “In every country we operate in, including Muslim countries, McDonald's is proudly represented by local owners who work tirelessly to serve and support their communities while employing thousands of their fellow citizens.”
His comments come several months after a McDonald's operator in Israel offered discounts to soldiers, security forces and others since the Oct. 7 attack by Hamas militants in Israel.
Many McDonald's operators in the region quickly distanced themselves from the Israeli operator's actions. Franchise groups in Kuwait, Pakistan and other countries issued statements saying they had no ownership interests with the Israeli franchise. and some of these franchises said they have made financial donations to help the people of Gaza.
It's about McDonald's franchise model, in which independently owned restaurants make decisions separately from the company. Customers may not be aware of this distinction and believe that an action taken by one location is always officially approved by the McDonald's company or reflects the positions of other locations.
The vast majority of McDonald's locations are operated by local franchise operators. In many ways, these operators act as independent companies: they set wages and prices, and make billings or donations as they see fit. This approach has helped make McDonald's a global phenomenon, with over 40,000 locations worldwide, including nearly 27,000 outside the United States as of 2022. But that means the company can't dictate how every operator responds in a crisis, for better or worse.
McDonald's is expected to report its results later this month, when more could be revealed about the issues cited by Kempczinski.
In December 2023, Starbucks made comments about people protesting the company and disrupting its stores over the Israel-Hamas war.
“We see protesters being influenced by misrepresentations of what we stand for on social media,” Starbucks CEO Laxman Narasimhan said in a letter to employees and customers.
“Cities around the world – including here in North America – have seen escalating protests. There have been incidents of vandalism in many of our branches,” he said. “We have been working with local authorities to ensure the safety of our partners and customers.”
CNN's Danielle Wiener-Bronner contributed to this report.