Former KFC/Pizza Hut Franchisee in Turkey Files for Bankruptcy Amid Mounting Debt

IS Gida, the former franchisee of KFC and Pizza Hut in Turkey, has declared bankruptcy after accumulating debts of 7.7 billion Turkish liras ($214 million). The bankruptcy filing follows Yum! Brands’ decision last month to terminate IS Gida’s franchise agreements, according to Turkey’s state-run Anadolu Agency (AA).

Financial Struggles and Business Collapse

“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,” said IS Gida CEO Ilkem Sahin in a statement to AA. The collapse of IS Gida has led to the closure of 537 restaurants and the loss of 7,000 jobs, making it one of the largest corporate failures in Turkey’s food sector.

Inflation, Boycotts, and Contract Termination

The company’s financial struggles were exacerbated by Turkey’s persistent inflation crisis, which has affected Western brands such as Coca-Cola, and by boycotts across the Islamic world, largely in response to Israel’s war in Gaza. Yum! Brands, the U.S.-based parent company of KFC, Pizza Hut, and Taco Bell, had been in discussions with IS Gida for months before ultimately deciding to unilaterally terminate the franchise agreements due to financial concerns, the Turkish company stated.