McDonald's restaurant at Ben-Gurion Airport
Photo Michael Kramer
McDonald's leaving Ben-Gurion Airport
American fast food chain loses bid to continue operating hamburger restaurants at Israel's international airport; to be replaced by Burger Ranch
American fast food chain McDonald's is leaving Ben-Gurion Airport and will be replaced by Israeli chain Burger Ranch, which has won a bid to exclusively operate a hamburger restaurant at Israel's
international's airport, Yedioth Ahronoth has learned.
Fast food chains operating at Ben-Gurion Airport generate relatively high turnovers, thanks to the unstoppable traffic of tens of thousands of passengers a day. According to estimates, the two restaurants operated by McDonald's had an annual sales turnover of some NIS 30 million (about $8 million).
McDonald's has been operating in the new airport building since it opened seven years ago. The chain has two restaurants in the airport: One in the Duty Free area, and the other in the Sh'hakim shopping center in Terminal 3.
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Meirav Crystal
Fast food chain competing against Israel's boutique hamburger restaurants with premium product sold for NIS 31.50 for 250 grams of meat
McDonald's participated in a bid to operate the hamburger restaurants for another seven years, but lost to Burger Ranch.
Sources with knowledge of the bid estimated that the Israeli chain's owners, the Orgad brothers, had offered the Israel Airports Authority (IAA) about NIS 8 million ($2.2 million) a year.
"We are proud of winning. One of our goals is to show tourists entering Israel that we have a local, high-quality and tasty hamburger brand," Eli Orgad told Yedioth Ahronoth's economic supplement, Mamon.
He said the bid offered by Burger Ranch was not too high. "It's a perfectly reasonable price considering the sales volumes and the location's strategic importance. I can say that it was a close battle, and that the competitors were not very far from our offer."
The Orgad brothers entered the hamburger business in 2003, when they bought the Burger King chain, which encountered financial difficulties, for NIS 30 million ($8 million).
In 2008, they acquired Burger Ranch as well from an official receiver for NIS 24 million ($6.5 million). Two years later, they surprised the market when they announced that they were giving up on the Burger King brand in favor of the Israeli one.
The two chains were united under the Burger Ranch brand, and the chain currently has 110 restaurants.
The IAA said in response, "Burger Ranch is joining a wide variety of restaurants which have opened at Ben-Gurion Airport recently, including Aroma, Pizza Hut, Shipudei Hatikva, and a Frame sushi restaurant which will open later on.
"We plan to issue 45 tenders totaling some NIS 108 million ($29.5 million) to advance the commercial activity at Terminal 3 in 2011-2012, in a bid to improve public service."
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