KFC and Pizza Hut operator in Turkiye declares bankruptcy

 

KFC Turkey Closes All Outlets Amid Bankruptcy and Boycott Impact

Ankara, Turkey: İş Gıda, the Turkish operator of the popular fast-food chains KFC and Pizza Hut, has declared bankruptcy, leading to the immediate closure of all 537 of its outlets across Turkey. The dramatic move, which occurred in February 2025, has resulted in the loss of approximately 7,000 jobs and underscores the significant financial pressures faced by the company.  

The bankruptcy declaration by İş Gıda, burdened by a debt of 7.7 billion Turkish Liras (around $214 million), comes at a time when Western brands in Turkey have been facing considerable consumer boycotts. These boycotts are largely attributed to public sentiment regarding the ongoing conflict in Gaza and perceived ties of these brands to Israel. Reports indicated a substantial drop in KFC sales in Turkey, estimated to be as high as 40%, suggesting the boycott played a crucial role in the company's financial woes.

Adding to İş Gıda's difficulties, Yum! Brands, the global parent company of KFC and Pizza Hut, terminated its franchise agreement with the Turkish operator. This decision was reportedly due to İş Gıda's inability to maintain the required operational and financial standards.  

While İş Gıda had pursued an aggressive expansion strategy, heavily relying on debt financing, rising interest rates and increasing liquidity problems further compounded its financial vulnerabilities. The confluence of these factors ultimately led to the company's collapse and the widespread closure of its KFC and Pizza Hut restaurants.

Yum! Brands has stated its intention to find new franchise partners to eventually reopen the outlets in Turkey. However, the immediate impact of the closures on the Turkish economy and workforce remains significant, highlighting the potential economic consequences of geopolitical events and consumer activism.

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