More than 500 KFC and Pizza Hut restaurants in Turkey could close after parent company Yum Brands terminated the franchisee of both brands in the country, IS Gida A.S.
Yum said in a federal securities filing on Wednesday that it terminated the operator “after failure to meet Yum Brands standards.”
Yum said it expects the restaurants to close in the country “at least temporarily.”
Yum also said it reacquired the master franchise rights in Germany from IS Gida parent company IS Holding last month. The Louisville, Kentucky-based company said it doesn’t expect an impact in Germany from that move.
Yum said it expects to take a $60 million, pre-tax charge in the fourth quarter associated with the acquisition of the German franchise rights and the termination of the Turkey business.
The company did say that, “due to issues specific to this franchisee and this market,” KFC and Pizza Hut restaurants in Turkey were “significantly below the global average sales per restaurant for each brand.” As such, Yum said, the loss of royalties from the store closures is not expected to have a “material impact” to the company’s operating profit in 2025.
The company also said it doesn’t expect the closures to impact the trajectory of unit growth for KFC and Pizza Hut.
Still, IS Gida operated 283 restaurants in Turkey and 254 Pizza Hut locations in the country.
UPDATE: This story has been updated to clarify that IS Gida is the franchisee in Turkey.
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