Following the bankruptcy of their local operator, İş Gıda A.Ş, 537 KFC and Pizza Hut locations in Turkey were abruptly closed in early 2025. About 7,000 workers lost their employment as a result of this event, which also brought attention to the intricate relationship between consumer activism, geopolitical tensions, and aggressive business tactics.
Financial strain and aggressive expansion
KFC and Pizza Hut franchise rights were acquired by İş Gıda in 2020 and 2022, respectively. The business started to grow quickly, expanding Pizza Hut shops from 45 to 254 and KFC locations from 125 to 283. A significant amount of debt was used to support this rapid expansion. Even though İş Gıda was named Yum! Brands’ “Best Franchise Partner of 2023,” growing interest rates and liquidity problems caused serious financial difficulties. Due to the accumulation of debts totalling more than 7.7 billion Turkish lira (about $214 million), the company declared bankruptcy in February 2025.
Effects of Customer Boycotts
Consumer boycotts of Western companies thought to favour Israel increased during Israel’s military operations in Gaza. In Turkey, KFC and Pizza Hut had sharp drops in sales; KFC’s sales were said to have dropped by 40%. This drop was a part of a larger pattern in which global corporations experienced negative publicity and lower sales in nations with a majority of Muslims because of their alleged ties.
A broader trend impacting Western brands in the Muslim world is reflected in the closures in Turkey. Businesses like McDonald’s, Starbucks, and Coca-Cola have seen boycotts that have resulted in significant revenue losses. For example, in the second quarter of 2024, Americana Restaurants, which operates Pizza Hut and KFC throughout the Middle East, recorded a 40% decline in profits. These events highlight the substantial influence that consumer action has on global firms doing business in politically delicate areas.