Israel’s KFC branches get a temporary lifeline as operator faces insolvency
A court approved NIS 100,000 in food purchases to keep 12 restaurants running ahead of a hearing on the appointment of a temporary trustee. The operator has reported debts of approximately NIS 50 million.
Smart-Service K&K, which operates 12 KFC branches in Israel, has filed an urgent motion asking the court to authorize approximately NIS 100,000 in cash payments to suppliers for essential food inventory, including chicken. The purchases would cover only the minimum quantities needed to keep the branches operating. The company warned that its food stocks are expected to run out within days and asked to continue operating pending a hearing on its request to appoint a temporary trustee, scheduled for Monday. It stressed that the branches remain open and are operating as usual, and that closing them would cause significant harm to both the company and its creditors.
According to the filing, the company has approximately NIS 411,000 in an account at Bank Discount, which it intends to use to pay for the food purchases. It emphasized that the payments would cover only new purchases, not outstanding debts, and noted that Bank Discount is not among its creditors. The application, filed by Adv. Eviatar Kramer, a partner and head of the Insolvency Department at Weksler Bergman, was submitted as a precautionary measure. The court order restricting actions involving the company’s assets applies only to transactions outside the ordinary course of business. Nevertheless, the company sought explicit court approval in case Bank Discount requires it.
Judge Yaakov Persky authorized the company to purchase food inventory, allowing the branches to continue operating over the coming days. A hearing on the request to appoint a temporary trustee and issue an order commencing insolvency proceedings is scheduled for Monday.
Last Thursday, the operator of KFC’s Israeli branches sought court protection after accumulating debts of approximately NIS 50 million.
According to the filing, the company’s liabilities include approximately NIS 37 million in shareholder loans, NIS 9.5 million in general unsecured debts, NIS 1.9 million in employee-related obligations and NIS 1.2 million owed to government authorities. The company attributes its cash-flow difficulties to several factors, including the events of October 7 and the subsequent escalation in the security situation.
The company operates 12 branches across Israel, in Tel Aviv, Givatayim, Rishon LeZion, Kfar Saba, Netanya, Ashdod, Haifa, where it has three branches, and Kiryat Ekron.
This is not the first time KFC’s Israeli operations have faced financial difficulties. In March 2025, another franchisee of the chain closed eight branches following a significant decline in revenue.
