KFC Israel Operator Seeks Court Protection Amid Financial Collapse

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The operator of 12 KFC restaurants in Israel has filed for court protection with debts of NIS 50 million, citing war-related revenue drops and high operating costs. The company owes millions to employees, creditors, and shareholders, and faces eviction threats. It seeks to avoid collapse and preserve assets rather than liquidate.

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KFC Israel's operator filed for court protection with NIS 50 million in debt.
The war in October 2023 caused a sharp decline in revenue and customers.
The company owes NIS 1.9 million to employees and NIS 9.5 million to creditors.
Shareholders invested NIS 37 million but it was not enough to prevent crisis.
The operator seeks to avoid collapse and preserve assets, not liquidate.

KFC Israel Operator Seeks Court Protection Amid Financial Collapse — איור מערכת שנוצר על ידי baba News, לא צילום של האירוע.

The company operating KFC's 12 branches in Israel has filed for urgent court protection, citing debts of approximately NIS 50 million and requesting the appointment of a trustee. The operator, established in 2020, faced severe financial difficulties following the outbreak of the war in October 2023, which led to a sharp decline in revenue and customer traffic. Further challenges arose from subsequent escalations with Iran.

Despite efforts to streamline operations, including cost-cutting, menu adjustments, and technological investments, the company struggled to meet its financial obligations. Shareholder injections totaling around NIS 37 million were insufficient to overcome the mounting crisis. The company has faced demands for eviction from landlords due to unpaid rent and has received notices from former employees threatening insolvency proceedings.

According to the court filing, the company owes approximately NIS 1.9 million to employees, NIS 1.2 million to authorities, NIS 9.5 million to ordinary creditors, and NIS 37 million to shareholders. The company argues that ceasing operations immediately would significantly devalue its assets, while continuing operations could facilitate a recovery. The stated goal of the legal proceedings is to prevent collapse and preserve the rights of all stakeholders, rather than liquidation.

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