KFC and Pizza Hut owner ends franchise deal in Turkey

Yum! Brands, the US-based owner of KFC and Pizza Hut, has terminated its franchise agreements with Turkish operator IS Gida.

The decision was taken after IS Gida failed to meet its standards, Yum! Brands said.

“Prior to termination, we engaged with IS Gida over several months to provide assistance and resolve key issues,” said Chris Turner, chief financial and franchising officer, Yum! Brands.

However, IS Gida was unable to maintain “compliance with our standards and adhere to fundamental provisions of our franchise agreements,” he said.

The franchise termination will affect 283 KFC and 254 Pizza Hut restaurants in Turkey, which are expected to close “at least temporarily”.

The US company is working to reopen as many restaurants as possible.

Yum! Brands alleged that the recent sales in the Turkish restaurants were “significantly below the global average sales per restaurant for each brand”.

As a result, the loss of royalties from the store closures will have no material impact on Yum!’s core operating profit in 2025 and beyond, it said, expecting no impact from this termination on other markets.

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On the other hand, IS Gida said its operations meet quality standards and continue to operate uninterrupted, state-run Anadolu Agency said.

The total number of restaurants reached 537, with a 300 percent growth in the first three years following the incorporation of KFC in 2020 and Pizza Hut in 2022.

“The compliance of all our KFC and Pizza Hut restaurants with global operational standards is regularly audited by Yum! Brands-approved independent auditing organisations,” the Turkish company said.

The process regarding the unilateral termination decision was allegedly taken by Yum! Brands as a result of a hasty evaluation with financial concerns, it added.