McDonald's will buy back all of its Israeli restaurants after sales suffered from a boycott of the brand over its perceived support for Israel.
The fast food giant was criticised after its Israeli franchise gave away thousands of free meals to Israeli soldiers.
McDonald's said it had reached a deal with franchisee Alonyal to return 225 outlets.
It said in January the Israel-Hamas war had "meaningfully impacted" business.
Widespread protests affected sales in the Middle East, Indonesia and France.
Alonyal, which is led and owned by chief executive Omri Padan, has operated McDonald's restaurants in Israel for more than 30 years.
McDonald's uses a franchise system which means that individual operators are licensed to run outlets and employ staff.
The boycott of McDonald's was sparked after Muslim-majority countries such as Kuwait, Malaysia and Pakistan issued statements distancing themselves from the firm.
Days after the Hamas attacks on Israel last October, and the retaliation by Israel Defense Forces (IDF), McDonald's franchisee said on social media that it had "donated and continues to donate tens of thousands of meals to IDF units, the police, hospitals, residents around the strip and all rescue forces".
Vocal protests were staged worldwide as the grassroots boycott spread beyond the Middle East. As well as restaurants in the region, McDonald's businesses in France, Indonesia and Malaysia have also been affected.
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