KFC Malaysia temporarily closes over 100 outlets amid ongoing boycott

MALAYSIA: KFC’s presence in Malaysia faces a significant setback as QSR Brands, the entity overseeing the fast-food franchise’s operations in the country, announces the temporary suspension of 108 outlets nationwide.

This decision follows months of sustained pressure from a pro-Palestine boycott targeting US-affiliated businesses, sparked by the ongoing conflict in Gaza.

Data from Google Maps indicates the closure of numerous KFC stores, including those in Kelantan and Terengganu, governed by the Malaysian Islamic Party (Parti Islam Se-Malaysia) state government.

These closures are reflected by their updated status to “temporarily closed.”

According to an anonymous source at QSR, the company views the boycott as an opportunity to address underperforming KFC stores that have been impacting its financial performance.

In a statement, QSR cited “challenging economic conditions” as the reason behind the proactive measures to temporarily close outlets.

The company aims to manage escalating business costs and concentrate on the more active KFC stores.

The statement also mentioned that affected employees were given the option to transfer to operating stores as part of a strategic move to optimize resources in areas with higher customer engagement.

Despite not being listed on the Boycott, Divestment, and Sanctions (BDS) list of targeted companies, KFC’s association with the US has led many Malaysians to perceive it as related to Israel.

Professor Mohd Nazari Ismail, chairman of the pro-Palestinian group Boycott, Divestment, Sanctions Malaysia, acknowledged this sentiment.

Since October 2023, KFC in Malaysia has adapted its branding to emphasize ownership by Johor Corporation, aiming to counter the impact of a boycott stemming from the Gaza conflict.

The company underscores its commitment to Islamic principles on its online platforms, emphasizing its employment of over 30,000 individuals, with 86% of them identifying as Muslims.

Entrepreneur Amri Hasim, based in Kedah, has observed a notable increase in job applications from KFC employees in the region, where 11 outlets have ceased operations.

He disclosed that outlets in the area have scaled back their operating hours from 24 to 12, leading to substantial reductions in wages.

Previously earning approximately RM2,000 (US$420) monthly, workers are now experiencing a significant decrease in take-home pay, with earnings ranging between RM600 (US$125) and RM700 (US$146).

Despite over 600 KFC restaurants in Malaysia, the chain, along with Starbucks and McDonald’s, faces boycotts over perceived ties to Israel following the Gaza conflict.

Berjaya Food, owner of 400 Starbucks stores, reported substantial losses, prompting owner Vincent Tan to consider privatization.

QSR, operating KFC outlets across several countries, including more than 480 Pizza Hut stores in Malaysia and Singapore, has seen severe impacts in states like Kelantan, where up to 80% of outlets have ceased operations, and Johor, with 15 closures.

In Selangor, Malaysia’s industrial hub, 11 branches, predominantly in Shah Alam, have temporarily shut down.

Amidst the ongoing conflicts in Gaza, several other global brands, including Starbucks and McDonald’s, are facing intense boycotts due to their alleged support or perceived association with Israel, in addition to KFC.