Shortly after the outbreak of the Israel-Hamas War and the beginning of the widescale destruction of Gaza in October 2023, McDonald’s executives in Chicago found themselves inadvertently entangled in the conflict. Local owners of McDonald’s restaurants are given significant autonomy over profits and operations, and franchisees had begun taking sides. Social media posts by McDonald’s in Israel highlighted the provision of free meals to Israeli soldiers, causing McDonald’s franchises across the Middle East to collectively pledge millions of dollars to support Palestinians in Gaza.
McDonald’s has since attempted to minimize commenting on the franchisees and navigate its way through the controversy. In April 2024, McDonald’s Corporation announced it would buy back 225 of its restaurants from Alonyal Limited, the Israeli company that manages McDonald’s in the country, for an undisclosed amount. Expected to be finalized over the next few months, the deal will keep McDonald’s busy as the company tries to reverse the decline in regional sales and stock price caused by the affair.
The incident demonstrates how multinational corporations with global footprints and decentralized operations can rapidly find themselves fueling opposing sides of conflicts. While McDonald’s top executives did not plan to show support for either Israel or Palestine, profit incentives have occasionally driven companies to support multiple sides in conflicts, often in more meaningful ways. The Iran-Iraq War from 1980 to 1988 saw Western weapons manufacturers directly and indirectly supply both sides with arms, capitalizing on the shifting Western government support for Iraq and Iran throughout the conflict.
However, as multinational companies have expanded their international operations amid increasing globalization and strains on the U.S.-led global order, they are now challenged with maintaining business dealings with both the U.S. and countries hostile to American interests. Additionally, these companies are becoming more entangled in fueling opposing sides of civil conflicts within other countries, directly and indirectly, in ways that can prolong or escalate violence.
The war in Ukraine has exposed how multinational corporations have become less willing to fully comply with the directives of any single government, including the U.S., when it conflicts with their financial interests. Despite Russia’s annexation of Crimea and instigation of a proxy war in Ukraine’s Donbas region in 2014, numerous Western........