Turkish KFC and Pizza Hut Operator Declares Bankruptcy, Shutting Down 537 Outlets
İş Gıda A.Ş., the Turkish operator of KFC and Pizza Hut, has filed for bankruptcy, closing all 537 outlets and leaving 7,000 employees jobless. The company cited $214 million in debt and blamed the termination of its franchise agreement with Yum! Brands for the collapse.
Read more: Fiery Protesters Torch KFC Pakistan Outlet
Key Factors Behind the Shutdown
- Debt-Driven Expansion: İş Gıda rapidly grew from 196 outlets in 2020 to 537 by 2024, relying on loans. Rising interest rates and liquidity issues worsened financial strain.
- Boycott Impact: Sales reportedly dropped 40% due to consumer boycotts against Western brands over the Gaza conflict.
- Mismanagement Allegations: Employees accused executives of diverting funds to subsidiaries and luxury assets, including a $50 million mansion.
Employee Fallout & Future Plans
- Unpaid Wages: Protests erupted as workers awaited salaries, with İş Gıda promising payments by February’s end.
- Severance & Layoffs: Employees were dismissed under Turkey’s Labor Law, with legal protections for severance pay.
- Franchise Rebuilding: Yum! Brands plans to reopen outlets under new partners, though restoring consumer trust remains a challenge.
The closure stands as one of Turkey’s largest corporate failures, exposing the risks of aggressive expansion in volatile economic conditions.
