Turkish company IS Gida, which previously operated KFC and Pizza Hut in Turkey franchises, has filed for bankruptcy with debts of TR7.7 billion ($214 million), following the termination of its franchise agreements by the US-based parent company of the two brands, according to a report by state-run Anadolu Agency(AA).
CEO Ilkem Sahin said, “The reality we face today is a debt of billions of Turkish liras, company immovables seized by banks and state institutions, including our factories, and all my savings that I have pledged as collateral.”
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It is worth noting that several prominent Western brands, including the beverage giant Coca-Cola and Pepsi, have been facing significant challenges in Turkey due to the country’s persistent inflation. Additionally, these brands have also been impacted by boycotts in the broader Islamic world, which have been sparked by Israel’s military conflict in Gaza. The boycotts, driven by public sentiment and outrage, have resulted in decreased sales and revenue for these Western brands, further exacerbating their struggles in the Turkish market.
The bankruptcy proceedings at IS Gida have led to the closure of 537 restaurants, resulting in the loss of around 7,000 jobs. This significant job loss has undoubtedly had a profound impact on the affected employees and their families.
Recently, the chief financial and franchising officer of Kentucky-based Yum! Brands, the parent company of KFC, Pizza Hut, and Taco Bell, stated that the company had engaged in lengthy discussions with IS Gida prior to ending it.
According to IS Gida, Yum! Brands’ decision to unilaterally terminate their contract was reportedly driven by financial concerns.
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