Local mom & pop stores have been under assault by all kinds of well-funded rivals for decades, including CVS, Target Mini-Stores, gas station franchises, and bottling companies working with vending machine distributors. Nevertheless, the little corner stores still keep ticking in many areas thanks to goods and services not offered by these bigger competitors, including specialty food, extended hours, and money transfer services.
However, if Target were to rebrand their mini-stores as "Red Bodegas" or something similar there would be similar outrage. It's one thing to compete, it's another thing to play dirty by usurping the little guy's brand or throwing your weight around too much in a very obvious or threatening way.
If I were McDonald and Rajan, I would use this opportunity to rebrand to something more acceptable, offer a mea culpa, and maybe even figure out some way to work with real bodegas and local stores (shared distribution for certain items to lower costs? Machine learning for real bodegas' inventory? "Local" goods? Spillover sales?)