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Angry Arabs Boycotting U.S. Franchises

2 min read
Opinions expressed by Entrepreneur contributors are their own.

Cairo-As if running a business isn't hard enough, some American affiliates in the Arab world are being punished for the United States' Middle East policy.

A grassroots boycott of American-made products is hurting many U.S. companies and franchise holders.

"People are convinced that whenever you buy a sandwich from an American-affiliated chain, you're helping pay for a bullet to shoot a Palestinian child," says Mahmoud El Kaissouni, vice chairman of Americana Foods, which operates Egyptian franchises for KFC, Hardees and Pizza Hut.

Fast-food restaurants such as Pizza Hut and McDonald's have been the most high-profile targets of the boycott, which has grown out of Arab frustration with perceived American support for Israel during the current intifada.

Fliers circulated in schools and universities have urged Egyptians to boycott a host of American-affiliated companies and products, including Marlboro cigarettes, Procter & Gamble, Hostess snack foods, Gillette, Coca-Cola, Pepsi, Heinz condiments, Disney products and Nike shoes.

The most immediate effect has been on the sellers of short-term consumables, like fast food.

Accurate figures on the impact of the boycott are difficult to obtain. The fasting month of Ramadan, which ended December 27, tends to be a quiet period for fast-food chains. An unscientific survey of several Cairo stores showed a slight but discernible dip in the sales of Procter & Gamble's laundry soap. Marlboro sales had also dropped.

A McDonald's executive said the month leading up to Ramadan registered a sharp enough decline in sales to worry management and alter company plans. The openings of five new franchises were delayed until after Ramadan in the hope that the controversy would have faded from public consciousness.

Kaissouni declined to discuss how much business American restaurants have lost in the past three months. He did say the fast-food chains that make up the Egyptian Chamber of Tourist Establishments have lost a combined 20 percent in business compared with the same period last year.

"It's something that started out patriotically," said Kaissouni, who maintained that his other companies were being unfairly targeted. "We all feel the same anger at Israel and America." -Chicago Tribune

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