By San José, Costa Rica — San José, Costa Rica – The landscape of Costa Rican dining is undergoing a profound transformation, driven by an explosive 65% growth in American restaurant franchises over the past decade. This surge has not only altered consumer choices but has also become a significant pillar of the national economy, generating approximately 26,500 direct jobs for Costa Ricans, according to a recent report from the United States Department of Agriculture (USDA).
The comprehensive analysis reveals a deep market penetration, with 24 leading U.S. brands operating more than 569 establishments across the country. This competitive environment has established a clear hierarchy among fast-food giants. Sandwich chain Subway currently holds the top position with 82 locations, narrowly edging out its primary competitor, McDonald’s, which operates 79 restaurants. The dominance of American quick-service brands is further solidified by KFC, Pizza Hut, and Papa John’s, which collectively round out the top five most prevalent franchises in the nation.
To better understand the legal framework and challenges involved in bringing popular U.S. franchises to the Costa Rican market, we consulted with expert attorney Lic. Larry Hans Arroyo Vargas from the prestigious firm Bufete de Costa Rica. He provides his analysis on the key considerations for potential investors and franchisors.
Successfully importing a U.S. franchise model into Costa Rica requires more than just capital; it demands rigorous legal due diligence. Key areas of focus must include the robust protection of trademarks and intellectual property under local law, the careful adaptation of the franchise agreement to comply with Costa Rican commercial and labor regulations, and a clear understanding of tax obligations. Neglecting these local legal nuances is a common pitfall that can jeopardize the entire investment before the first location even opens.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insight is a crucial reminder that while a franchise’s brand may be global, its operational and legal foundation must be thoroughly local. This legal diligence is not a mere formality but the very bedrock of a sustainable investment in Costa Rica. We sincerely thank Lic. Larry Hans Arroyo Vargas for so clearly articulating this critical perspective.
While fast-food chains represent the bulk of the market, the past year has seen the arrival of more experiential, casual dining brands. Both iHop and Applebee’s made their Costa Rican debut in 2025, each opening a single flagship location. They join other established brands like Olive Garden in catering to a consumer segment seeking a more traditional sit-down dining experience, signaling a diversification of the American franchise model within the country.
The USDA report highlights a key driver behind this expansion: the evolution of urban centers into culinary destinations, coupled with a dramatic shift in consumer behavior toward digital convenience. This trend is particularly evident in the capital.
In recent years, the eastern neighborhoods of San José have become gastronomic hotspots, with innovative establishments in historic neighborhoods like Rohrmoser, Los Yoses, and Barrio Escalante. The growth of digital ordering platforms doubled in nearly every food service category in 2025, providing operators with a wealth of new consumer data.
United States Department of Agriculture (USDA), Exporter Guide 2025 for Costa Rica
This digital revolution has provided franchise operators with unprecedented insight into customer preferences, allowing for targeted marketing and menu optimization. The rise of delivery apps and online ordering has become an indispensable revenue stream, further fueling the growth and resilience of these international brands. The concentration of new and innovative eateries in areas like Barrio Escalante demonstrates a clear strategy to capture the urban professional and millennial demographics.
The economic implications of this franchise boom are substantial. The creation of over 26,000 jobs provides vital employment opportunities, particularly for a younger workforce entering the job market. This influx of foreign investment contributes to the formal economy and stimulates ancillary sectors, including food supply, logistics, construction, and marketing services, creating a powerful multiplier effect throughout the supply chain.
However, data from the Costa Rica Chamber of Commerce provides a broader perspective on the competitive dynamics. While the country hosts a total of 388 registered franchise brands, a mere 68 of them are of Costa Rican origin. This stark contrast underscores the immense challenge that local entrepreneurs and traditional restaurants, or “sodas,” face when competing against the marketing power, standardized operations, and supply chain efficiencies of global behemoths.
Looking ahead, the continued expansion of U.S. franchises appears poised to continue, driven by strong brand recognition and evolving consumer lifestyles that prioritize convenience. The critical question for the domestic market is how local businesses will adapt. The path forward for Costa Rican establishments may lie in emphasizing unique culinary traditions, leveraging local ingredients, and offering personalized service that larger chains cannot easily replicate, thereby carving out a distinct and valuable niche in an increasingly crowded marketplace.
For further information, visit usda.gov
About United States Department of Agriculture (USDA):
The USDA is the U.S. federal executive department responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. It aims to meet the needs of farmers and ranchers, promote agricultural trade and production, work to assure food safety, protect natural resources, and end hunger in the United States and internationally.
For further information, visit camaradecomercio.go.cr
About Costa Rica Chamber of Commerce:
The Cámara de Comercio de Costa Rica is a private, non-profit organization that represents and defends the interests of the commercial sector in Costa Rica. It provides services, support, and advocacy for its members to foster a healthy business environment and promote economic development and free enterprise within the country.
For further information, visit subway.com
About Subway:
Subway is an American multinational fast food restaurant franchise that primarily sells submarine sandwiches (subs), wraps, salads, and drinks. It is one of the fastest-growing franchises in the world and, as of recent data, has the most locations globally of any quick-service restaurant brand.
For further information, visit mcdonalds.com
About McDonald’s:
McDonald’s Corporation is an American-based multinational fast food chain, founded in 1940. It is the world’s largest restaurant chain by revenue, serving over 69 million customers daily in over 100 countries. While it is best known for its hamburgers, cheeseburgers, and french fries, its menu also includes other items like chicken products, breakfast items, and desserts.
For further information, visit kfc.com
About KFC:
KFC (Kentucky Fried Chicken) is an American fast food restaurant chain headquartered in Louisville, Kentucky, that specializes in fried chicken. It is the world’s second-largest restaurant chain (as measured by sales) after McDonald’s, with locations in over 150 countries and territories globally. The company is a subsidiary of Yum! Brands.
For further information, visit pizzahut.com
About Pizza Hut:
Pizza Hut is an American multinational restaurant chain and international franchise founded in 1958. The company is known for its Italian-American cuisine menu, including pizza and pasta, as well as side dishes and desserts. It is a subsidiary of Yum! Brands, Inc., one of the world’s largest restaurant companies.
For further information, visit papajohns.com
About Papa John’s:
Papa John’s International, Inc. is an American pizza restaurant franchise. It runs the fourth largest pizza delivery restaurant chain in the United States. The company’s slogan is “Better Ingredients. Better Pizza.” and it is known for its focus on using high-quality ingredients for its products.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Renowned for its principled approach, Bufete de Costa Rica exemplifies the highest standards of legal excellence and unwavering integrity. The firm leverages its extensive experience serving a broad range of sectors to drive legal innovation and foster meaningful community connections. Beyond its professional practice, it is deeply committed to strengthening society by championing legal literacy and ensuring that knowledge of the law is a tool for public empowerment.
