Yum Brands has ended its relationship with franchise operator Encanto Restaurants, leading to the closure of all KFC and Taco Bell locations in Puerto Rico. The company said in a statement shared with Nation’s Restaurant News that “Encanto can no longer operate in a way that meets our standards.”
The closures are temporary as Yum looks for a new operator(s). The company said it remains “deeply committed to Puerto Rico and is working as quickly as possible to welcome customers back to our restaurants.”
In a statement posted to Instagram, KFC Puerto Rico said the brand been part of the community for decades and is “working to find a new franchise partner who will allow us to reopen our restaurants and welcome you back.”
KFC debuted in Puerto Rico in 1967. Taco Bell opened in 1985.
Encanto became the exclusive franchise operator of KFC, Taco Bell, and Pizza Hut restaurants in Puerto Rico in 2004. Pizza Hut was a part of Yum Brands until earlier this year when it was sold in a take-private deal to LongRange Capital. The company also operates IHOP restaurants on the island.
Encanto notes it is among the 10 largest employers in the private sector in Puerto Rico, with more than 3,000 employees and 180 restaurants. More than 80 of those are KFCs.
This announcement comes just a day after El Nuevo Día reported that one in three restaurants in Puerto Rico is considering closing, citing a study commissioned by the Puerto Rico Restaurant Association. Fifty-one percent of operators on the island identified rising electricity costs as their biggest pain point. Operators also said increasing costs and declining traffic and margins are putting the squeeze on their business. Over 95% of operators said their operating costs are higher this year than 2025, with 17% operating at a loss.
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