Fast food operator in Turkey declares bankruptcy, announces massive layoffs

İş Gıda A.Ş., operator of KFC and Pizza Hut franchises in Turkey, declared bankruptcy with over 7.7 billion TL in debt. Workers protested unpaid wages, alleging misuse of funds. The company planned layoffs and pledged to pay January salaries by the end of February.

Wednesday February 12 2025 02:53 pm

Duvar English

Turkish İş Gıda A.Ş., which operated franchises for KFC and Pizza Hut across Turkey, on Feb. 12 announced it would start layoffs after it declared bankruptcy due to debts amounting to 7.7 billion TL.

The company employs over 7,000 workers, whose wages and benefits went unpaid following the declaration.

In a written statement, the company announced, “Due to the unilateral termination of our partnership with Yum! Brands, we were forced to close all our restaurants and cease customer services.”

İş Gıda A.Ş. stated that it had opened 537 restaurants in 35 cities in just four years, investing all profits in opening new KFC and Pizza Hut locations under Yum! Brands’ guidance.

The company said it experienced financial strain in the last quarter of 2024 and had to resort to high-interest loans. Despite ongoing deliberations, İş Gıda claimed that owner Yum! Brands "abruptly terminated" the agreement on January 8, 2025, ending the four-year partnership.

The statement also addressed unpaid employee wages, noting that January wages, delayed for the first time in the company’s history, were planned to be paid by the end of February.

The company also announced the start of layoffs. “As a result of the cessation of operations, layoff procedures will begin under Article 18 of the Labor Law, following the principle that termination is a last resort. Employees’ severance pay, notice pay, and unused leave entitlements are legally preserved.”

Workers issued a statement alleging misuse of company funds. They claimed the employer purchased a 50-million-TL mansion using unpaid employee premiums.

Their statement read, “The cost of dissolving partnerships with two global franchise giants is being borne by workers and laborers. İş Gıda A.Ş.’s bankruptcy claim appears artificial, and the company’s past financial records should be investigated."

The workers pointed to assets transferred to Krispy Kreme and İş Teknik, urging scrutiny from authorities. "During a time of financial difficulty, we believe a loan was used for other purposes. İlkem Şahin’s purchase of a rim factory occurred while we faced supply chain problems. Meanwhile, Krispy Kreme locations were opened during a period of severe financial strain. Employees worked tirelessly in January but were not paid, yet Krispy Kreme workers received bonuses last month,” the workers claimed.

The workers demand their unpaid wages during a Feb. 6 protest.

The US-based fast food giant Yum! Brands announced the decision on Jan. 8, saying that İş Gıda was "ultimately unable to maintain compliance with our standards and adhere to fundamental provisions of our franchise agreements.”

The franchisee operated 283 KFC and 254 Pizza Hut restaurants across Turkey.