Burger King Israel today asked the Tel Aviv District Court for a stay of proceedings, as the fastfood chain’s local operation, owned by Israeli-American entrepreneur Meshulam Riklis, owes US$12m, of which US$10m is owed to Bank Hapoalim, Israel’s largest bank.
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This is Burger King’s second franchise holder to seek a stay of proceedings: last December, Ameriking, the second largest Burger King franchise holder in the US, filed for Chapter 11 bankruptcy protection due to competition from McDonald’s and Wendy.
Burger King Israel has been badly beaten by its two main competitors on the local scene – McDonald’s, with 100 branches, and Burger Ranch, with 94 branches. Haaretz reports that Burger King, which launched in Israel in 1994, “has failed to spread out to strategic locations and has established only 56 branches throughout Israel to compete on the local market, which was worth NIS650m ($135m) in 2002, down 13% from 2001.” Since 1998, Riklis has made several attempts to sell Burger King Israel.
