While the U.S. territory of Puerto Rico has had KFC since 1967 and Taco Bell since 1985, the island in the Caribbean abruptly lost both Yum! Brands chains after the fast-food parent company ended its relationship with Encanto Restaurants, the Associated Press reported.
The latter franchise operator has operated KFC restaurants on the island since 1985, but according to a Yum! Brands statement cited by AP, could no longer “meet company standards.”
As a result, more than 100 KFC and Taco Bell locations in Puerto Rico have been temporarily closed as of Nov. 2, although both Yum! Brands and Encanto Restaurants framed the disruption as temporary.
Why all KFC and Taco Bell restaurants in Puerto Rico are closed
“We remain deeply committed to Puerto Rico and are working as quickly as possible to welcome customers back to our restaurants,” the parent company said in the statement.
KFC Puerto Rico, meanwhile, said in an Instagram post that it “hope[s] to be able to serve you again very soon.” Taco Bell also issued a similar statement. As of the last U.S. Census, Puerto Rico is home to just over 3.22 million residents, of whom 340,000 live in the capital of San Juan.
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Along with the Taco Bell and KFC locations, Encanto Restaurants also operates Pizza Hut and IHOP restaurants on the island for a total of 180 restaurants employing more than 3,000 workers. The latter two chains are not affected by the shutdown and have remained open as of Nov. 3.
Beyond the statements on the closures, none of the parties provided more details on the reasons for the fallout or how the legal process around extracting longstanding franchise partners will play out.
A target date for reopening or potential candidates for new franchise operators have also not been identified.
Taco Bell stores in Puerto Rico remain closed as Yum! Brands looks for a new franchise partner.
Yum! Brands releases third-quarter earnings, KFC leads the pack on profit
In third-quarter earnings that Yum! Brands released on Nov. 3, the fast-food company reported a 4% revenue bump to $2.05 billion. KFC led profits with 6% sales growth and 1% same-store sales growth.
At a global scale, KFC sales in the Middle East, India, and the rest of Asia saw the highest growth at 25%, 20%, and 12%, respectively.
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Taco Bell, meanwhile, experienced a rapid turnaround in which same-store sales in the total quarter were down 4% but jumped up to 3% over the last four weeks. This came as the chain recovered from a cyclospora outbreak in shredded iceberg lettuce over the summer months.
Although foot traffic to Taco Bell dropped dramatically throughout July, it bounced back almost instantaneously once the outbreak was declared over several weeks later.
“I’m incredibly proud of how the Taco Bell team and our franchise partners have come together with urgency and focus to drive a rapid recovery,” Yum! Brands CEO Chris Turner told investors on the call.
“From a low point in July, Taco Bell U.S. same-store sales strengthened week after week, and since the end of September, the brand has been outperforming the QSR industry on same-store sales growth.”
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