İş Gıda, the Turkish representative of KFC and Pizza Hut, files for concordat

It has emerged that İş Gıda AŞ, which made headlines at the beginning of last month due to the termination of its master franchise agreement with Yum! Brands, the owner of the KFC and Pizza Hut brands, is a party to a significant lawsuit. 

According to the case file obtained by Halktv.com.tr, a concordat request was filed on behalf of İŞ Holding AŞ, İş Gıda Sanayi AŞ, İşhway Gıda Dağıtım AŞ, and Peyman Kuruyemiş Gıda AŞ, as well as the owner of these companies, İlkem Şahin. 

The aforementioned case was opened on January 28 at the Istanbul Anadolu 1st Commercial Court of First Instance. According to the case file, the total debt of the group, which is experiencing economic difficulties, is close to 7.7 billion TL. The number of personnel employed by the group companies is around 6 thousand. 

According to the file, the reason behind the group's near-financial collapse lies in the difficulties experienced by İş Gıda AŞ. Since the group's other companies acted as guarantors for the bank debts of İş Gıda AŞ, the problems experienced by this company began to affect the entire group. 

IT HAS 537 RESTAURANTS

İş Gıda AŞ is the owner of 537 KFC and Pizza Hut restaurants across Turkey. The company, which gained rapid growth momentum in the last few years, opened hundreds of new restaurants. According to the file, the investment made for the opening of each KFC restaurant was recorded as 300 thousand dollars. The rapid growth experienced eventually led to payment difficulties within the company. 

NEGOTIATIONS ENDED NEGATIVELY

According to the file, with İş Gıda AŞ falling into trouble, contact was made with Yum! Brands starting from the end of last year. According to the petition, a series of meetings were held between the parties for over 2 months. It is alleged that an agreement was reached for a number of restaurants to be taken over by Yum! Brands.

However, when this agreement could not be implemented, the financial crisis experienced by İş Gıda hit the entire group in a short time. In the petition, this situation was expressed with the words: “However, things became complicated at exactly this point. The failure to keep the support promises made by Yum and the non-payment of incentives jeopardized growth strategies.” 

In the application made to the court, a request for a term concordat was made. The court handling the application issued an interim injunction yesterday. A 3-month temporary grace period was granted for İŞ Holding AŞ, İş Gıda Sanayi AŞ, İşhway Gıda Dağıtım AŞ, and İlkem Şahin. 

The court appointed enforcement and bankruptcy law expert Prof. Dr. Serdar Kale, Certified Public Accountant (YMM) Sabit Selman Tünal, and YMM Ferhat Kurç as concordat commissioners. The court rejected the application of Peyman Kuruyemiş AŞ on the grounds that the case was filed in an unauthorized jurisdiction, as the company's headquarters is in Eskişehir.