Israeli KFC Franchise Operator Files for Stay of Proceedings Amid Debt Crisis
Smart Service K&K, operator of 12 KFC branches in Israel with 100 employees, has filed for a stay of proceedings in the Beersheba District Court amid severe cash flow issues totaling nearly 50 million shekels in liabilities.
The operator of 12 KFC branches in Israel, Smart Service K&K, has filed an urgent request for temporary relief and the appointment of a temporary trustee at the Beersheba District Court. Employing 100 workers, the company is seeking a stay of proceedings, a prohibition on asset disposal, and a freeze on legal actions under the Insolvency and Economic Rehabilitation Law to keep the chain operating as a going concern. According to the court filing, the company's liabilities total approximately 37 million shekels in owner loans, around 9.5 million shekels in ordinary debts, 1.9 million shekels in employee debts, and 1.2 million shekels owed to authorities. The firm attributes its severe cash flow crisis to various factors, including the October 7 events and the subsequent security escalations.
KFC's history in the Israeli market has been marked by multiple entries and exits since its initial attempt in the late 1980s with a single branch in Tel Aviv that quickly closed. A fourth comeback was launched in February 2020 in Nazareth, intentionally operating without kosher certification to preserve the original recipe and focusing heavily on peripheral areas and the Arab sector. Although the chain expanded to about 20 branches by 2024, a major franchise partner shut down eight locations in March 2025—representing roughly 40 percent of the network—following a sharp decline in revenues. Today, 12 branches remain active across cities including Tel Aviv, Givatayim, Rishon LeZion, Netanya, Ashdod, Haifa, and Kiryat Ekron.
