KFC Puerto Rico and Taco Bell close as Yum! drops Encanto

KFC Puerto Rico and Taco Bell began closing their restaurants across the island on Monday 2 November, after Yum! Brands ended its relationship with Encanto Restaurants, the local franchisee that has run both chains there since 2004.

KFC announced the decision on its social media accounts in a short statement: “Unfortunately, Encanto can no longer operate in a way that meets our quality standards.” The chain gave no detail on what those failings were. Taco Bell published a similar message on its website, citing the same reason. According to El Nuevo Día, Yum! Brands, which owns both brands, will now identify a new operator.

Neither company gave a reopening date. KFC said it is working to find a new franchise partner that would allow it to reopen, and told customers, as quoted by Telemundo Puerto Rico, that it hopes to serve them again very soon. Reports differed on the pace of the shutdown: Primera Hora said all KFC restaurants would close from Monday, while Metro Puerto Rico noted that the announcement set no date for individual locations.

Ending a franchise takes one statement; reopening more than a hundred restaurants takes a new operator.

How big KFC Puerto Rico had become

Encanto said in December 2024 that it operated 83 KFC restaurants, 40 Taco Bells, 76 Pizza Huts and seven IHOPs in Puerto Rico, with about 3,000 employees across its four brands. Its website now lists 172 restaurants. No official figure has been given for the workers affected by the closures; Primera Hora estimated that hundreds will lose their jobs. Neither statement mentions the Pizza Hut and IHOP restaurants that Encanto also runs on the island.

The company was formed in October 2004, when Yum! Brands franchised its Puerto Rico restaurants, and passed to the private equity firm Harvest Partners in 2006. Since 2019 it has been owned by a group of private investors from the United States and Puerto Rico.

Court cases and a search for a new operator

According to records compiled by the Boletín de Puerto Rico and cited by the EFE news agency, Encanto had more than 70 court cases on file by July 2026, most of them evictions and debt collection claims, and most of them filed this year. Neither KFC nor Taco Bell linked those cases to their decision, and Encanto had not commented publicly by Monday.

The timing is awkward for a group that is still opening doors elsewhere: only a month ago Taco Bell opened its first public restaurant in Germany. In Puerto Rico, where KFC says it has been part of the community for decades, the question now is how quickly a new franchisee can be found, and how many of Encanto’s staff it will take on.