Iş Gıda, which once managed the fast food chains KFC and Pizza Hut across Türkiye, has now filed for bankruptcy following the termination of its franchise agreements by U.S.-based Yum! Brands. The multinational owner cited Iş Gıda’s failure to maintain compliance with established quality and operational standards, a move that came after months of discussions in which Yum! Brands attempted to assist the operator in meeting contractual obligations.
Financial Collapse and Operational Impact
The bankruptcy filing reveals a staggering debt of TL 7.7 billion (€214 million), a situation that has forced the closure of 537 restaurants nationwide 283 KFC outlets and 254 Pizza Hut locations. The financial collapse has had a severe impact on employment, leaving around 7,000 workers without jobs. In a statement earlier this week, Iş Gıda’s CEO Ilkem Şahin lamented the dire financial realities, describing the company’s burden as a “debt of billions of Turkish liras,” with assets seized by banks and state institutions.
The announcement of Iş Gıda’s bankruptcy sparked immediate public outcry. Hundreds of workers and concerned citizens gathered in front of the company’s headquarters in Istanbul, demanding accountability and the protection of workers’ rights.
Allegations and Industry Disputes
Yum! Brands’ decision to end its relationship with Iş Gıda was driven by alleged non-compliance with the company’s strict operational standards. Chris Turner, Yum! Brands’ chief financial and franchising officer, stated that despite prolonged efforts to resolve key issues, Iş Gıda ultimately failed to meet the fundamental provisions of the franchise agreements. In response, Iş Gıda defended its performance, asserting that its operations met quality benchmarks and highlighting a remarkable 300% growth in restaurant numbers within the first three years after launching the KFC brand in 2020 and the Pizza Hut brand in 2022.
Broader Context and Controversy
The bankruptcy comes at a time when several Western brands in Türkiye are facing heightened scrutiny and boycott calls due to their perceived links to Israel. These tensions have intensified in the wake of ongoing conflicts in Gaza and the occupied West Bank. While Yum! Brands’ move appears rooted in operational concerns, the broader geopolitical climate has undoubtedly added complexity to the challenges facing multinational franchises operating in Türkiye.
The collapse of Iş Gıda not only marks a significant setback for the fast food industry in Türkiye but also raises important questions about the sustainability of franchise operations in a volatile economic and political environment.
