KFC Israel Faces Sale Amid Financial Distress

The Israeli franchise of the fast-food chain KFC, operated by Smart Service Q&K, is up for sale. Court-appointed trustees, Adv. Amit Lederman and CPA Aliza Sharon, have received approval from the Beersheba District Court to solicit bids for the company or its operations within 21 days. This move follows a court order to commence insolvency proceedings against the chain earlier this month.

KFC Israel currently operates 12 branches and employs approximately 120 workers. The company has accumulated debts totaling around NIS 50 million, including NIS 37.5 million in owner loans, NIS 9.5 million in ordinary debts, NIS 1.9 million owed to employees, and NIS 1.2 million to authorities. The company's representatives cited the events of October 7th and the subsequent security escalation as contributing factors to its financial difficulties.

According to the trustees' report to the court, several parties have already expressed interest in acquiring the chain. The request to expedite the sale was made with the consent of the Supervisor of Insolvency Proceedings. Concurrently, the trustees are working to stabilize ongoing operations, retain employees, and maintain communication with raw material suppliers.

The trustees have been actively assessing the company's operational and financial status since their appointment, meeting with management, financial and operational staff, employee representatives, and essential suppliers. A significant focus is on rebuilding trust with the approximately 120 employees and engaging them in the process to preserve the company's value for an optimal sale. A Zoom meeting was held with all employees and management, along with their legal representatives, to discuss the situation.