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 - Costa Rica

Franchises in Costa Rica

Franchises in Costa Rica

There are 30 franchise retail businesses in operation in Costa Rica; they employ about 4,000 people. It is estimated that less than 20 percent of these franchises are locally-owned and the remaining 80 percent are foreign-owned (of this percentage (99% are U.S. franchises). The franchise market is developing at a rational pace. Tourism has increased the demand for franchise business in Costa Rica.

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Costa Rica's franchise market consists primarily of fast food and specialty food businesses, including several of the big name U.S. franchises.  Franchises currently in in Costa Rica are: 

Franchise# of LocationsYear *
Burger King 15 1993
Denny's 1 1999
KFC (Kentucky Fried Chicken) 5 1970
McDonald's 20 1970
Papa Johns 5 1999
Pizza Hut < 20; 3 mobile units 1970
Subway 1 1997
Taco Bell 10 1989

(*) costarica.com's research team estimates.

Non-food franchises include:

  • Hotel Chains 
  •  Car Rental Agencies 
  • Clothing Retail Outlets 
  •  Business Services (accounting, technical and courier) 
  •  Vehicle Service Stations 
  •  Convenience Stores 
  • Laundry/Dry Cleaning establishments

    Franchises can adapt to the Costa Rican market by adding local foods to their menus and by translating their menus, manuals, and catalogs into Spanish. Because Costa Rica is a small country, marketing franchises and investors in franchises may prefer an exclusive territorial contract. Investor groups of some successful franchise operations have purchased master franchise rights for all of Central America.

    Licensing & Joint Ventures:

    Licensing is not widespread in Costa Rica. Traditionally, foreign companies have exported to Costa Rica, or set up manufacturing assembly operations in the country, either independently or through joint venture arrangements.

    Foreigners may legally own a company in Costa Rica, or equity therein, and may invest in all areas not expressly reserved for state or semi-governmental companies. (Companias Paraestatales - companies that are owned by the government, but their budget is not included in the national budget. Their board of directors consists of government officials. These companies are considered part of the public sector, and they have the same vision and mission statements of the government in the particular area in which they specialize). 

    Foreign companies may be organized legally in several ways: as branches (including banks), joint ventures, wholly-owned subsidiaries or locally incorporated companies. Costa Rican government encourages bona fide investments. Foreigners must be residents of Costa Rica in order to work in Costa Rica or have a work permit.