Yum! Brands terminates franchise agreement in Turkey
This will temporarily close 293 KFC and 254 Pizza Hut restaurants.
Yum! Brands has announced that it is terminating its franchise agreement with Turkey franchisee IS Gida A.S. after the operator failed to meet brand standards.
The move impacts 293 KFC and 254 Pizza Hut restaurants in Turkey. Yum! Brands expect these restaurants to be closed temporarily.
The group also attributed its poor performance in the market to the franchisee and the market.
“Having ‘3C’ franchisees that are capable, capitalised and committed is essential to our business, and we strive every day to provide them the necessary support and tools for success, whilst asking our partners to deliver high-quality experiences for our customers,” said Chris Turner, Chief Financial & Franchising Officer, Yum! Brands. “Prior to termination, Yum! Brands engaged with IS Gida over several months to provide assistance and resolve key issues, but IS Gida was ultimately unable to maintain compliance with our standards and adhere to fundamental provisions of our franchise agreements.”
Previously, IS Holding served as Yum!’s master franchisee in Germany for KFC and Pizza Hut for the past two years. In December, Yum! Re-acquired the master franchise rights and resumed management of the market.
The group expects to take a $60m hit in the fourth quarter of 2024 relating to the cost of the franchise termination and its re-acquisition of the German business.
