Economy18:37 · 21h ago

Asaf Rappaport Negotiates to Acquire McDonald's Israel Franchise

YnetCenter

Translated & summarized from Ynet by baba

Key points

01Asaf Rappaport is negotiating to acquire McDonald's Israel franchise with 230 branches.
02The franchise is valued between $200 million and $300 million with annual sales of 1.7 billion shekels.
03Omri Padan held the franchise for 30 years before McDonald's global repurchased it in 2024.
04Padan's support for IDF soldiers triggered boycotts and sales declines in Arab countries and Europe.
05Other bidders include retail and real estate figures like Uri Max, Meir Group, and the Horesh family.
06Rappaport is a wealthy businessman known for investments after Waze's $32 billion sale to Google.

In this story

People

Asaf Rappaport, Omri Padan, Uri Max, Zehavit Cohen, Yaakov Shahar, Moshe Meno

OrganizationsMcDonald's, Max Stock, Apax Fund, Meir Group, H&M, Union Motors, Azrieli Group, Meno Shipping

PlacesIsrael, Ramat Gan, Ayalon Mall, Arab countries, Europe

The story · English

Asaf Rappaport is currently in talks with McDonald's global management to acquire the franchise rights for operating the fast-food chain in Israel. This franchise, which includes approximately 230 branches nationwide, is considered one of the most coveted in Israel, valued between 200 and 300 million dollars. The chain's annual sales in Israel are estimated at around 1.7 billion shekels, with profitability ranging from 8% to 10% over the years.

Previously, the franchise was held by Omri Padan, who opened the first McDonald's branch in Israel in October 1993 at Ayalon Mall in Ramat Gan. Padan expanded the single branch into the largest McDonald's network in Israel over three decades. However, following the October 7 attack and Padan's campaign supporting IDF soldiers, including distributing 10,000 free meals, the franchise faced boycotts in Arab countries and Europe, leading to significant sales declines and pressure from global investors. In April 2024, McDonald's global announced it would repurchase the franchise for about one billion shekels, with Padan stepping down in January 2025. Since then, the chain has been managed directly by McDonald's headquarters, amid complaints about declining service and cleanliness.

Rappaport stands out among other candidates, who mainly come from retail and real estate sectors, such as Uri Max (founder of Max Stock), the Meir Group led by Yaakov Shahar, and the Horesh family, franchisees of H&M and Toyota importers. Other potential buyers included internal McDonald's Israel management, the Azrieli Group (which denied involvement), and Meno Shipping owned by Moshe Meno. Rappaport is a prominent Israeli businessman who gained significant wealth after the historic sale of Waze to Google for 32 billion dollars. Since then, he has invested in numerous startups in AI and cybersecurity, led the acquisition of controlling stakes in Channel 13 and Israel Broadcasting Corporation, and is negotiating to buy a quarter of Herzliya Medical Center.

The winning bidder will gain presence in nearly every major shopping center in Israel, including McDrive outlets, and control over a brand deeply embedded in Israeli consumer culture for over 30 years.

Read the original at Ynet