KFC and Pizza Hut Cease Operations and Announces Bankruptcy in Turkey
After facing boycotts and criticism, Yum! Brands has terminated its franchise agreements with İş Gıda, the operator of KFC and Pizza Hut in Turkey, due to non-compliance with company standards and policies. This decision has led to the closure of 537 restaurants and the filing of bankruptcy by İş Gıda, affecting approximately 7,000 employees.
The termination, announced on January 8, 2025, impacts 283 KFC and 254 Pizza Hut outlets across the country. Yum! Brands stated that despite months of assistance, İş Gıda failed to meet operational standards and adhere to franchise agreements.
In response, İş Gıda filed for bankruptcy, citing debts totaling 7.7 billion Turkish liras ($214 million). The company attributed its financial difficulties to rapid expansion and high-interest loans, and expressed intentions to protect employee rights during the restructuring process.
Chris Turner, Yum! Brands’ chief financial and franchising officer, said that:
"Prior to termination, Yum! Brands engaged with IS Gida over several months to provide assistance and resolve key issues, but IS Gida was ultimately unable to maintain compliance with our standards and adhere to fundamental provisions of our franchise agreements."
The closures have also impacted shopping mall investors, with estimated rental losses exceeding ₺80 million monthly due to the vacant restaurant spaces.
Yum! Brands has expressed commitment to the Turkish market and is exploring options to reopen the affected restaurants under new management in the future.
This situation highlights the challenges faced by global franchises in maintaining operational standards and the broader economic implications of such closures.
