Overview

Based on a Costa Rican Chamber of Commerce study, the Costa Rican franchise sector has decreased during the last year due to the Covid-19 pandemic.  In 2019, this sector grew 141 percent from 2010, but just a 0.6 percent from 2018.  However, during the last two years franchises decreased from 361 in 2019 to 355 in 2021 as shown in the table above, including 289 international and 66 domestic franchises.  Forty-two percent of the foreign franchises present in Costa Rica come from the United States, representing a decrease of 12 percent from 2018.  Increasing franchise development provides opportunities for small- and medium-sized companies to expand.

For international franchises, the duration of the contract is typically greater than 10 years, in this situation is 53 percent of the total of the franchises identified.  It should be noted that for 24 percent of franchises, contracts range from 5 to 9 years.

In the past few years, franchises have reached a total of 2,958 establishments throughout the country.  This has generated a lot of employment in Costa Rica.  In 2019, the franchise sector produced 30.469 new jobs.  The franchise sector has greatly contributed to the Costa Rican economy, earning more than $250 million in the last decade.  Sales are as important as the impact of investments.

Sub-Sector Best Prospects

With regards to the international franchise sector, food sector ranks the highest with 30 percent of the market, followed by specialized services with 28 percent.  Fashion is the third largest sector of international franchises, making up 22 percent of the market.  The remainder of the market is comprised of health, education, and commercial retail centers, among other types of franchises.

Generally, the main areas in which franchises are established are in western suburbs of San Jose, in cities such as Escazú and Santa Ana.  Malls and other commercial centers are also the home to many franchises.  This has led to the construction of new malls toward the East of San Jose.

Opportunities

Costa Rica takes second place after Guatemala in franchising sector growth within the Central American region.  The Chamber of Commerce of Costa Rica and public banks support franchising. Both offer assistance with legal issues in addition to providing financing and consulting services.

Resources

• CS Costa Rica Administrative/Commercial Assistant Emilio Cordoba: Emilio.Cordoba@trade.gov
• Commercial Service office Costa Rica: https://www.trade.gov/costa-rica
• VIII Study of Franchises in Costa Rica by the Chamber of Commerce of Costa Rica 2017: http://www.centralamericadata.com/docs/EstudioFranquiciasCRNov2017.pdf