By In early 2025, the Turkish fast-food landscape experienced a significant upheaval as İş Gıda A.Ş., the franchise operator for KFC and Pizza Hut in Turkey, declared bankruptcy. This development led to the closure of 537 restaurants across the country, affecting approximately 7,000 employees. The turmoil began on January 8, 2025, when Yum! Brands, the U.S.-based parent company of KFC and Pizza Hut, announced the termination of its franchise agreements with İş Gıda. The decision was attributed to İş Gıda’s alleged failure to meet the quality standards stipulated in their contracts. Chris Turner, Chief Financial and Franchising Officer of Yum! Brands, stated that despite several months of engagement to resolve key issues, İş Gıda was unable to comply with the required standards and fundamental provisions of the franchise agreements.
In response, İş Gıda refuted these allegations, asserting that all their KFC and Pizza Hut restaurants adhered to global operational standards, as regularly audited by independent organizations approved by Yum! Brands. The company emphasized that its operations continued uninterrupted and described the termination decision as hasty and financially motivated. Following the contract termination, İş Gıda faced severe financial distress, culminating in a bankruptcy filing on January 28, 2025. The company reported debts amounting to 7.7 billion Turkish Liras (approximately $214 million). This financial collapse led to the immediate closure of all KFC and Pizza Hut outlets operated by İş Gıda, leaving thousands of employees without work and unpaid for the month of January.
The situation sparked protests from the affected workers, who gathered in front of İş Gıda’s headquarters in Istanbul, demanding their unpaid wages and clarity about their future employment. The employees expressed frustration over the lack of communication and called upon the Ministry of Labor and Social Security to intervene. Amidst the crisis, İş Gıda pledged to address the outstanding salaries, stating that efforts were underway to pay the delayed January wages by the end of February 2025. The company also indicated that layoff procedures would commence, assuring that employees’ legal entitlements, including severance and notice pay, would be honored. This chain of events has not only disrupted the fast-food industry in Turkey but also highlighted the vulnerabilities within franchise operations, especially when disputes arise between parent companies and local operators. The legal and financial ramifications of this fallout continue to unfold, with significant implications for all parties involved.
