KFC and Pizza Hut, two globally recognized fast-food brands, have ceased operations in Hulhumalé as of late 2023. The outlets, which opened in April 2023 above Rashu Market, reportedly faced low business performance leading to the closures. While neither franchise has released an official statement, the decision marks an abrupt end to their presence in Hulhumalé.
Impact of Boycott Movements in the Maldives
The closures come in the wake of a strong boycott movement in the Maldives linked to protests against Israel's actions in Palestine. Both brands found themselves at the center of controversy, facing significant backlash from the local community.
- Protests and Vandalism: Demonstrations were held outside the franchises' Male’ outlets, with protestors opposing their operations.
- Reputation Challenges: Vandals targeted the outlets multiple times, intensifying the challenges for the businesses.
- Franchise Response: KFC International distanced itself from political affiliations, emphasizing its role as a non-political establishment. However, the damage to its reputation in Muslim-majority countries, including the Maldives, was evident.
KFC’s Regional Struggles
The challenges faced by KFC in the Maldives mirror broader issues for the brand in the region.
- Indonesia: In the first quarter of 2024, KFC reported a staggering USD 35 million loss, prompting the closure of 47 outlets across the country.
- Malaysia: Several KFC outlets were temporarily shuttered this year due to financial difficulties, reflecting ongoing struggles in another key market.
KFC and Pizza Hut were introduced to the Maldives in 2018 through Gemma Island Food, a joint venture between Island Food Maldives and India’s Gemma Pizza Craft Overseas. The franchises brought global fast-food chains to Maldivian shores, initially met with excitement.
The Hulhumalé branches aimed to expand the brands’ reach within the capital region. However, they struggled to maintain their foothold amidst a challenging business environment and growing public dissent.
What Led to the Closures?
The closures in Hulhumalé can be attributed to a combination of factors:
- Low Business Performance: Reports suggest the outlets failed to attract sufficient customers, leading to declining revenues.
- Public Boycotts: The protest movements significantly impacted foot traffic, deterring potential customers.
- Global and Regional Challenges: Financial losses in neighboring markets like Indonesia and Malaysia highlighted broader struggles for the franchises in Muslim-majority countries.
