Who’s taking the biggest hit in the global fast food boycott?
In the proxy war over fast food that’s now enveloping the Muslim world, it’s clear who took the first shot. But unlike the war that triggered it, who exactly is footing the bill is another matter.
In the early days of the War in Gaza, Israel’s McDonald’s franchisee, Alonyal Ltd, set off a tidal wave of controversy when it announced it would give free food to Israeli soldiers. In January, the Israeli franchisee behind Pizza Hut appeared to follow suit, when the Palestinian news source Quds News Network posted screenshots from Pizza Hut Israel’s Instagram account of smiling IDF soldiers holding stacks of pizza boxes which, according to the caption, Pizza Hut had given them for free.
Both Alonyal and Tabasco Holdings, the Israeli Pizza Hut franchisee, appear to have acted alone, without approval from the American companies that own their respective brands. But their decisions to give food to soldiers fighting perhaps the world’s most watched conflicts has led to serious global ramifications. As the news ricocheted around social media, regular McDonald’s, Pizza Hut, and KFC customers all over the world, but especially in predominantly Muslim countries, announced plans to boycott all three restaurants. (The KFC and Pizza Hut brands are both owned by the same company, Yum! Brands.)
Attempting to quell the outrage, McDonald’s Corporation, the US company that Alonyal paid to use the Golden Arches logo and menu, released statements insisting McDonald’s was politically neutral and had no ties to either side of the conflict. Soon after, McDonald’s franchisees from Turkey to Oman—all of them unrelated to Alonyal, except in their common relations to the McDonald’s brand—distanced themselves from Alonyal by issuing their own statements of support for the people of Gaza and pledging support for relief efforts in the region.
But for millions of customers, the presumed complicity of any business wearing the brand of a global fast food company was already a foregone conclusion. Either they did not grasp the fact that franchisees were independently owned, or they believed independent ownership did not absolve them from their Israeli counterpart’s choices. The fact that the United States government is the leading international sponsor of the IDF only added fuel to the flames: Regardless of ownership, customers still considered these brands to be inherently American. Franchisees in countries with large Muslim populations in the Middle East and Asia soon reported massive drops in sales. In February, the McDonald’s Corporation announced it had missed sales estimates for the first time since the early days of the Covid-19 pandemic.
Boycott promoters on social media took declining sales as a clear sign they were hitting the intended target. “Let this be a lesson to any company that wants to continue supporting the Zionist entity,” a PhD student in Canada, who goes by the handle @palfolkore, said in a TikTok with over 14 thousand likes, posted the day McDonald’s released its sales figures. “Your stocks will drop. Your earnings will be hit … There is no amount of rebranding you can do to dissuade us … We know what you are. We know what your politics are.” (@palfolkore did not respond to a request for comment.) Their post was one of countless others celebrating the apparent victory, and the boycott continues to this day.
The conceptual simplicity of a boycott, and a fast food boycott in particular, has made it especially easy for activists to get behind: Fast food companies are huge, global, and, unlike arms manufacturers, whose connection to the war is as direct as it is obvious, they depend on money from the general public to keep going. But fast food, like globalization itself, does not easily lend itself to such a straightforward line of attack. Before taking aim at fast food, it helps to understand who’s actually behind it.
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If you know something about how the fast food industry works, you’re probably familiar with the concept of franchising. It works like this: The fast food company, called the “franchisor,” gives a company or individual, the “franchisee,” the right to use its name, menu, and likeness in a given area. In exchange, the franchisee typically pays the franchisor an annual fee and gives it a cut of its revenue. During the industry’s early rise in the United States in the 1950s and 1960s, franchising gave companies like McDonald’s and Burger King a way to expand without staking their own capital. Instead of borrowing money themselves to build new restaurants, they could rely on people with their own savings and lines of credit to underwrite new operations. It would ultimately benefit customers, too: A person could walk into a McDonald’s in Portland, Maine and another three thousand miles away in San Diego, California and expect the same food and service, despite the fact that each was independently owned.
As the industry became larger and richer, the capital advantage of franchising became less important. Many companies backed off the practice, electing the more profitable route of opening their own restaurants. But overseas, franchising still proved critical to the industry’s expansion. First, franchisees knew their own regions more intimately than a large corporation, headquartered on another continent, ever could. Secondly, local ownership allowed the industry to blur the lines around its own national identity. Depending on the mood of its customers, McDonald’s or KFC could be an American brand, a local one, or some indistinct fusion of the two.
But almost as long as global fast food companies have maintained a presence outside the US, they’ve been the subject of political protest, and even political violence, as was the case in a series of attacks and bombings in Latin American countries, such as El Salvador and Peru, from the late 1970s through the 1980s, and in majority Muslim countries, such as Pakistan, Egypt, Indonesia, and Lebanon in the 2000s and the 2010s. In many cases, it was clear the activists, rebels, or terrorists who targeted a particular fast food outlet intended to make it a proxy for something bigger. Often, the United States was the primary target. Other times, it was globalization itself. In his book-length account of his travels in India, The Age of Kali, William Dalrymple recounts how, on the 51st anniversary of Mahatma Gandhi’s assassination in 1999, members of a farmers’ union in Bangalore trashed a KFC in the name of a “second freedom struggle” to stop “the invasion of India by multinationals.”
Drawing a line from India’s independence struggle to KFC may have been a stretch. But it made striking at a locally-owned fast food outlet easier to justify. After all, if multinational corporations were colonial powers, what were franchisees if not their collaborators?
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A similar question hovers over the current wave of consumer action sweeping the Muslim world. If symbolism is the point, does it matter who among the multitude of people and institutions behind various international fast food brands takes the biggest hit during a boycott? Fast food corporations may be nebulous, but franchised restaurants are their real-world manifestations. They may be independently owned, but they are nothing if not closely affiliated with the corporations whose names they carry. Why not go after them?
We might see the current wave of boycotts as an attempt to apply that same logic on a massive scale. But the result has been that people are going after franchisees with no business in Israel at all. In August, Americana Group, a franchisee that owns more than 2,000 KFCs and other restaurants across the Middle East and Kazakhstan, reported a 40 percent loss in the second quarter of this year compared to the same period in 2023. QSR Group, the leading KFC and Pizza Hut franchisee in Southeast Asia, temporarily closed over one hundred KFCs in Muslim-majority areas.
“Let’s give it up for Malaysia, everybody,” another TikToker going by the handle @anti__mia said of the news. “The Malaysians really know how to boycott.”
Yet the people most affected by these boycotts may not actually be protesters’ intended target: Neither Americana nor QSR Group has any business in Israel. In fact, the largest backers of both franchisees are agencies of governments that have taken positions against Israel. Americana Group’s largest investor is the Public Investment Fund, the sovereign wealth fund of Saudi Arabia—a country which has never recognized Israel and has called Israel’s actions in Gaza a genocide. The controlling shareholder of QSR Brands is an investment company owned by the Malaysian state of Johor, and one of its largest minority shareholders is another government entity, a pension fund controlled by the Malaysian Ministry of Finance. The Malaysian government is so at odds with Israel that, last year, it adopted a boycott of its own, banning all Israeli ships from entering its ports.
Fast food ownership might be fuzzy by nature, but the effects of the current boycotts are quite vivid. Earlier this year, QSR Brands intended to put itself up on the local stock exchange, attracting more investors and likely bringing in additional money for the state-owned agencies that control it. But after closing stores and watching profits tumble, those plans are indefinitely on hold. Despite the avowedly pro-Palestinian position of the Malaysian government, to activists and Gaza-watchers on TikTok, the KFC name—and its American ties—speaks louder.
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Back in Israel, McDonald’s has gone through an even more dramatic transition. In April, McDonald’s Corporation made the drastic choice to buy back all 225 of Alonyal’s restaurants for an undisclosed sum. Owning Israeli McDonald’s outright will expose the company to more risk, but it will also give the company more control, and the local stores more stability during a period of political upheaval. Boycott or not, the fast food industry finds a way.
Ownership also means McDonald’s Corporation gets to capture the profits for itself instead of sharing them with a local partner. Ironically, a boycott of Israeli stores now would do more harm to the US company’s bottom line than it did when the boycott began. Despite the protestations of its corporate masters, the fast food industry—like any global industry—is enmeshed in world politics, after all.