Franchise operator cites ‘challenging economic conditions’ amid local reports linking closures to boycotts of Israel.

KFC Malaysia has temporarily closed some outlets in the country amid calls to boycott the chain over Israel’s war in Gaza.

KFC is among a number of Western brands in Malaysia, where more than 60 percent of the population is Muslim, that have been subject to boycott calls over their perceived links to Israel.

QSR Brands Holdings Bhd, which operates KFC and Pizza Hut restaurants in the country, said it temporarily shut the outlets amid “challenging economic conditions” in order to “manage increasing business costs and focus on high engagement trade zones”.

“Contributing positively to the Malaysian community, preserving the brand love for KFC and protecting employees of the brand are all priority to the organisation. Employees from affected outlets were offered the opportunity to relocate to busier operating stores as part of the company’s re-optimisation efforts,” the company said in a statement on Monday.

“As a company that has been serving Malaysians for over 50 years, the focus remains on providing quality products and services to customers, while contributing positively to the Malaysian economy through job security for 18,000 team members in Malaysia, of which, approximately 85 percent are Muslims.”

QSR Brands did not specify a reason for the difficult conditions.

Local media, which linked the closures to the boycotts, cited Google Map data showing dozens of outlets affected across the country.

Boycotts in Muslim-majority countries have been blamed for a slump in the earnings of Western brands with perceived links to Israel.

In February, McDonald’s cited boycott campaigns in the Middle East, Indonesia and Malaysia for sales growing just 0.7 percent during the fourth quarter of 2023, compared with a 16.5 percent growth the previous year.

Unilever, which produces Dove soap, Ben & Jerry’s ice cream and Knorr stock cubes, said the same month that sales in Indonesia had experienced a double-digit decline during the fourth quarter as a result of “geopolitically focused, consumer-facing campaigns”.