McDonald’s corporation has taken control of the 23 restaurants operating in Costa Rica under its brand name. During the next six months the corporation will consider candidates for taking over the restaurants. If all goes according to schedule, some or all of the restaurants will have new owners within a year. Edgardo Navarro, head of McDonald’s operations for Central America indicated that the move was made in order to increase the pace of expansion in Central America.
The corporate takeover of Costa Rican McDonald’s restaurants became effective on 1 September, 2000. It marked the temporary end of 30 years of restaurant ownership by Costa Rican investors. The buyout came as the result of about six months of negotiation culminating in the formal purchase on 31 August. During the first stage of the reorganisation, the corporation will invest US$3m, primarily on remodelling projects. Starting in the year 2001, three new restaurants will be opened.
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For years, McDonald’s of Costa Rica, officially registered as Costa Rican Fast Food Service S.A., has been the brunt of attacks from international environmental groups that claim the restaurant chain contributed to deforestation. Although the validity of the claims is questionable, they have worked against the corporate image there.
McDonald’s management view Costa Rica as a market with promise, although one in which the competition has grown too fast for comfort. The leading international competitor in the hamburger sector is Burger King. Nevertheless, Tricon International has a strong presence in Costa Rica with its KFC, Pizza Hut, and Taco Bell franchises. The potential for fastfood consumption in Costa Rica is underscored by the fact that, according to Population Reference Bureau statistics, per capita GNP there was the second highest in Central America (closely following Panama) at US$2,680 per annum in 1997.
SOURCE: includes information from the article “McDonald’s Costa Rica recupera franquicia”, El Diario de Hoy
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