QCOSTARICA – Earlier this year, in March, the Burger King franchisee in Costa Rica, BK Centroamérica, closed four restaurants in the country: Plaza Real Cariari, Paseo Metrópoli, Heredia Centre and Santo Domingo, due to low profitability.
The closure put 39 people out of work.
At the time, BK Centroamérica said it would continue to operate the other 29 stores as usual, even hinted there may be new openings on the horizon.
However, yesterday, the Chamber of Commerce (Camara de Comercio), confirmed concerns about the possibility of BK shutting down operations entirely.
President of the Camara, Francisco Llobet, said the possibility of BK closing is worrying because many families depend on the company. “It would be a pretty strong blow and we are deeply concerned that many will be out of a job,” Llobet told the Diario Extra.
“It is an issue of competitiveness, we are unfortunately seeing this every day, companies moving away. For our part we are eager to talk with the government,” added Llobet.
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Please talk to the Government Mr. Llobet and soon!!
I am sure Ken has never run a business or if he has never in C R
Electric rates are shutting down most of the companies that are leaving .
There is a particular downside to the restaurant/bar business related to demographics, which I call the “novelty” factor. Having previously been in the restaurant/bar business in Canada, I’ll explain how it works. When a new bar/restaurant opens, there is a period when everyone rushes over to try it out, hence the “novelty” factor. During this period (usually 4-6 months) and made worse with the relatively low number of consumers available in Costa Rica to patronize such establishments, the older establishments in the same consumer territory suffer a downturn in business. In Costa Rica, staff payroll deductions are high for employer contributions, as well as the cost of utilities, and other business related permits and taxes, all of which need to be maintained by the business owner, regardless of the fluctuations in the business climate. When this “novelty” factor happens repeatedly, as it does, it can prove to be the “death knell” for even the most seasoned operators. I don’t believe that Wendy’s left and Burger King is considering leaving, based on the seasoned ability to do business and “deep-pockets” when it comes to an advertising budget. This is a trend that I’m seeing in business, which is somewhat unique to the Costa Rica experience.
they should probably raise the taxes and electricity prices, I bet that will help
Since 2013, nine new chicken franchises have opened in Costa Rica. Subway and Quiznos has been expanding. We also have new Smashburgers, Johnny Rockets, a Hard Rock Cafe, etc., etc.
I agree with the president of the Chamber of Commerce that “it is in issue of competitiveness,” but don’t understand what he’s “eager to talk with the government” about. Is the government somehow responsible for which businesses fail and which ones succeed? Is the government supposed to enact protectionist legislation on behalf of the businesses that lose in market competition?
I’ll start suspecting that this may be a matter for the government to address when most of the restaurants start closing, but at the moment I fail to see the crisis. Within easy walking distance of me are two Chinese restaurants, Tico Burgers, a Pizza Hut, a locally-owned pizza parlor, a barbecue joint, a Peruvian restaurant, two Japanese restaurants, five sodas, two bars serving bar food, and a chicken franchise as well a locally-owned chicken joint. I suppose if the Burger King a bit farther away closes I may miss it, but the truth is that I haven’t eaten there for over a year.
Business brattiness grates on me. It never wants the government to tax or regulate, but loves government handouts for their startups and then always blames the government for their own failures.