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KFC is facing new operational challenges in Israel as one of its franchisees, Mefco, has closed eight of its locations, including branches in Arab communities, two in Be'er Sheva and one in Ramla.
Mefco, which operated 40% of KFC’s locations in Israel, has now ceased business at all its branches, leaving the fast-food chain with 12 remaining outlets in the country.
The affected locations include Nof HaGalil, Kinneret Mall in Tzemach, two branches in Be'er Sheva (one at the BIG shopping complex and another at Cinema City), as well as locations in Ramla, Kfar Saba, Zikhron Yaakov and Yarka. KFC’s remaining branches, including those in Tel Aviv, Haifa and Rishon Lezion, continue to operate as usual.
Industry sources say Mefco, which primarily managed branches in northern Israel, struggled with operations and had previously shut down locations in Umm al-Fahm and Daliyat al-Karmel. A shopping mall CEO with a KFC location reported a 25% drop in revenue at the franchise over the past year, attributing the decline to the impact of the ongoing war.
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"The war hurt the business, which was reflected in the store’s appearance and reduced investment in advertising," he said. "The Russian franchisee also faced issues at the start of the Russia-Ukraine war, but those were resolved."
KFC’s Israeli operations are divided between two franchisees—one Arab and one Russian. Reports suggest that the company may attempt to resolve the crisis by selling Mefco’s shuttered locations to the Russian franchisee.
KFC’s troubled history in Israel
Kentucky Fried Chicken has faced repeated difficulties in Israel, with previous franchise failures attributed to kosher restrictions that altered the original recipe. When KFC reentered the Israeli market in 2019, it did so without kosher certification to maintain its signature fried chicken coating, which includes milk powder.
The brand first entered Israel in the late 1980s with a single location in Tel Aviv, which later closed. KFC returned in 1993 under the management of Clal, then changed ownership multiple times. In 2003, businessman Udi Shamai, in partnership with Dor Alon (controlled by David Wiessman), acquired the franchise, expanding it to eight locations at its peak. In 2008, Dor Alon sold its stake to Shamai, who continued operating KFC until its final closure in 2012. The brand relaunched in Israel in 2019, with a business strategy focused on expansion in peripheral areas and the Arab sector.
KFC issued a statement confirming the closures, saying: “The KFC Israel franchisee, Mefco, has halted operations at its eight locations. We apologize for any inconvenience this may cause and will provide updates when available. KFC remains committed to serving our valued customers, who are welcome to visit any of our 12 other locations operating as usual.”
The remaining operational branches include Tel Aviv, Givatayim, Rishon Lezion, Grand Canyon Haifa, Ashdod, Petah Tikva, Bilu Junction, Netanya, Ra’anana, Hof Hacarmel and two additional locations in Haifa.