Israel's economic daily Calcalist reported Sunday that the Landwer group and several companies operating in the restaurant sector have expressed interest in acquiring the KFC fried chicken chain in Israel, after it suffered a financial collapse and entered proceedings to stay legal claims due to accumulated debts estimated at about 50 million shekels.
The newspaper said the interested parties include a poultry supplier studying the purchase of the chain, which would allow it to supply its branches with chicken and achieve integration in supply and operations, alongside the Landwer group and other restaurant-sector parties.
According to the report, the company operating the chain faces mounting financial difficulties despite securing 37 million shekels in shareholder loans, while its owners have been unable to inject further funds amid restrictions linked to sanctions imposed on institutions in Russia, which prevented additional money from being transferred to Israel.
It noted the chain has been affected since the outbreak of the war by a decline in customer and tourist turnout and a slowdown in consumer spending, as well as a ban by the American company owning the brand on the franchise management in Israel advertising during the war, inflicting further damage.
Despite declining revenues, the company continued opening new branches, which raised operating and rental costs and deepened its financial losses, at a time when its attempts over the past year to find a strategic investor or buyer did not succeed.
The company's financial data show revenues rose from 30 million shekels in 2022 to 63 million in 2023 and then to 71 million in 2024, but rising operating and financing expenses widened its losses from 2.5 million shekels in 2022 to 9.4 million in 2024.
Rental costs also rose from 15.8 million shekels in 2023 to 22 million in 2024, while its purchases from suppliers reached 25 million shekels and employee wages about 9 million shekels during the same year.
The report pointed out the company owes about 3 million shekels to the credit card company CAL and a similar amount to the global company owning the KFC brand, in addition to 1.9 million shekels to employees, 1.9 million to suppliers, 1.6 million to property owners and 1.2 million to tax authorities and municipalities.
It added that the company failed to pay the rents of its branches during the past two months of September and October, prompting several shopping centers to issue notices terminating lease contracts and demanding the evacuation of the sites.
The KFC chain operates in Israel through Smart Service, which opened 13 branches before closing one of them last August, leaving 12 branches, all inside shopping centers.
The American brand had returned to the Israeli market in 2020, while one of the companies holding its franchise closed eight branches in early 2025 due to financial difficulties.
The report indicated the company tried over the past year to improve its financial situation and regain customers by introducing halal products, offering promotional deals and adjusting prices, but these steps have not yet succeeded in halting the deterioration of its financial position.
