KFC Franchisee in Israel Files for Bankruptcy Amid Financial Crisis
Translated & summarized from i24NEWS by baba
KFC's Israeli franchisee has filed for bankruptcy protection, citing NIS 50 million in debts and potential closure of all 12 branches. The franchisee blames the "Swords of Iron" war and sanctions on Russia for financial difficulties. Employees' October salaries are uncertain as a court hearing is set for tomorrow to appoint a receiver.
The story in 5 lines · by baba
- KFC's Israeli franchisee filed for bankruptcy, owing NIS 50 million and potentially closing all 12 branches.
- The franchisee cites the "Swords of Iron" war and sanctions on Russia for severe financial distress.
- Employees' October salaries are uncertain following the insolvency filing.
- A court hearing is scheduled for tomorrow in Be'er Sheva to appoint a receiver.
- KFC has a history of struggling to succeed in the Israeli market.
The fast-food chicken chain KFC may be on the verge of permanently leaving Israel, as its local franchisee has reported a severe crisis that threatens its ongoing operations. The franchisee has filed an urgent request for court protection from creditors, signaling a potential closure of all its branches in the country.
Last week, the franchisee submitted a request for insolvency proceedings for 12 branches, citing debts totaling NIS 50 million to creditors, including NIS 1.9 million owed to employees. This situation follows the closure of eight branches by the franchisee in the Arab sector just last year. Despite KFC's global success in over 150 countries, its presence in Israel has reportedly struggled to gain traction, contrasting with the success of local imitations and culinary influencers attempting to replicate its famous fried chicken.
The franchisee, "Smart Service," which is based in Russia, attributes the financial difficulties to the "Swords of Iron" war, which has negatively impacted tourism and customer traffic, while simultaneously increasing operational expenses. Sanctions imposed on Russia are also cited as a significant obstacle, hindering the flow of funds.
Employees were reportedly surprised by the insolvency filing, and their October salaries are currently uncertain, though the branches continue to operate for now. A court hearing is scheduled for tomorrow in Be'er Sheva to discuss the appointment of a receiver. The key question remains whether another franchisee will emerge to take over the company, settle the debts, and potentially lead the globally recognized brand to success in Israel.
