KFC, Pizza Hut franchisee in Türkiye blames Yum! Brands for financial collapse
A smartphone screen displays the Yum! Brands logo alongside the logos of its subsidiaries, including KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. (Adobe Stock Photo)
The operator of KFC and Pizza Hut in Türkiye, Is Gida, blamed U.S-based Yum! Brands, the owner of the brands, for the recent debt crisis that forced the company to file for restructuring to avoid bankruptcy, leading to the closure of 537 restaurants and the layoff of thousands of employees.
According to the statement from the company on Wednesday, Is Gida stated that number of the restaurants in Türkiye rose to 537 in just four years across 35 cities, from 138 restaurants in 2020.
The investment costs driven by rapid growth were consistently covered through its equity, and earnings were directed toward opening new KFC and Pizza Hut restaurants under the guidance of Yum! Brands.
‘Negotiations with Yum! Brands were going positive’
“As a result, we began to face financial difficulties in the last quarter of 2024 and were forced to resort to high-interest loans. During this period, we initiated discussions with Yum! Brands to prevent harm to both our brands and stakeholders. Among the options discussed was the possibility of transferring all operations to them,” the company stated.
Is Gida claimed that while the negotiations were progressing positively, Yum! Brands abruptly terminated the contract unilaterally on Jan. 8, 2025, ending their four-year partnership without notice.
The statement highlighted that necessary steps were being taken to minimize the impact of the situation and protect the rights of all stakeholders, particularly employees, as this development had significant consequences for employees, business partners, and customers.
On Jan. 8, Yum! Brands announced the termination of the franchise agreement with Is Gida, reasoning failure to meet the quality standards of the brands. After the decision, the company filed for concordatum on Jan. 28, a Turkish legal restructuring process that allows struggling companies to negotiate a payment plan with creditors to avoid bankruptcy.
