January 8, 2025 – Yum! Brands (NYSE: YUM) announced today that it has terminated its franchise agreements with franchisee IS Gida A.S. (IS Gida), the owner and operator of all KFC and Pizza Hut restaurants in Turkey and a subsidiary of IS Holding A.S. (IS Holding), after failure by IS Gida to meet Yum! Brands’ standards.
“Having ‘3C’ franchisees that are capable, capitalized and committed is essential to our business, and we strive every day to provide them the necessary support and tools for success, while 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.”
The termination affects 283 KFC and 254 Pizza Hut restaurants in Turkey, and Yum! Brands expects the restaurants to close at least temporarily. Yum! Brands appreciates the loyalty of its Turkish consumers, remains committed to the region and is working to reopen as many of the restaurants as possible in the future.
Yum! is separately taking legal action pursuant to the terminated franchise agreements.
The owner of IS Holding had also served as Yum!’s master franchisee in Germany for KFC and Pizza Hut for the past two years. In December 2024, Yum! successfully re-acquired the master franchise rights to the German business and resumed management of that market. There is no impact in Germany from the termination in Turkey, and Yum! looks forward to continuing to serve its consumers in Germany and growing the KFC and Pizza Hut brands through its base of franchise partners in that market.
Yum! Brands anticipates a pre-tax special charge of approximately $60MM for the fourth quarter of 2024 consisting primarily of transaction costs associated with the German acquisition and termination-related costs associated with the Turkey business.
Due to issues specific to this franchisee and market, the recent sales in the Turkey restaurants were significantly below the global average sales per restaurant for each brand. As a result, the loss of royalties from the store closures will have no material impact to Yum!’s core operating profit in 2025 and beyond. The Turkey closures will be reflected as a reduction in Yum!’s reported unit counts at the end of the first quarter of 2025. Aside from this one-time change in unit count, Yum! remains confident in its global unit growth trajectory and expects no impact from this termination on other markets.
Turner continued, “Protecting our brands is fundamental to our role as franchisor, and we will take all measures necessary to ensure compliance with our operational standards so that our brands deliver consistent quality dining experiences that our customers expect and love. Yum! and its brands look forward to again serving our customers in the Turkey market in the future.”
About Yum! Brands, Inc.
Yum! Brands, Inc., based in Louisville, Kentucky, and its subsidiaries franchise or operate a system of over 60,000 restaurants in more than 155 countries and territories under the Company’s concepts – KFC, Taco Bell, Pizza Hut and Habit Burger & Grill. The Company's KFC, Taco Bell and Pizza Hut brands are global leaders of the chicken, Mexican-style food and pizza categories, respectively. Habit Burger & Grill is a fast casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. In 2024, Yum! was named to the Dow Jones Sustainability Index North America for the eighth consecutive year, and the Company was recognized among TIME Magazine’s list of Best Companies for Future Leaders, Newsweek’s list of America’s Most Responsible Companies and USA Today’s America’s Climate Leaders. Yum! also received widespread recognition in 2023, including being listed on the Bloomberg Gender-Equality Index; and Forbes’ list of America’s Best Employers for Diversity. In addition, KFC, Taco Bell and Pizza Hut brands were ranked in the top five of Entrepreneur’s Top Global Franchises Ranking for 2023.
