A major pizza retail chain from Spain is looking to capture the burgeoning franchise market in Costa Rica. Telepizza has about 1,200 locations around the world and employs about 25,000 people who make, serve and deliver delicious pizza. It will not be an easy undertaking for Telepizza, however, considering the troubles that major brands such as Domino’s and Pizza Hut have experienced in Costa Rica.
Telepizza will incursion into Costa Rica by means of an existing master country franchising agreement in Panama. In the latter country, Telepizza is starting out cautiously, with just two locations in 2013. Costa Rica is a much more enticing market for the Spanish franchise chain, but it may have to be very cautious as well. As recently reported by business weekly El Financiero, the iconic Domino’s Pizza brand has once again shut down its operations in Costa Rica.
According to Cesar Brenes Quiros of El Financiero, Domino’s Pizza confirmed that it was no longer operating in this country in late November. Three restaurants in the capital city suburbs of Desamparados, Guadalupe and Pavas ceased operations and dismissed 35 employees. These locations, however, are still serving pizza: They have been replaced by Papa John’s, another major brand from the United States.
The rocky history of Domino’s Pizza in Costa Rica dates back to 2009, when a Mexican investment group decided to pull the plug on nine restaurants and issue pink slips to 130 employees. A businessman from Grupo As, which is known for its numerous fried chicken outlets across the country, purchased the franchise rights for $10,000 and quickly opened the three locations that are now Papa John’s. It is not clear why Domino’s has not been able to “avoid the Noid” in Costa Rica, but it is not alone in this franchise pizza pain.
Pizza Hut, which operates 55 locations in Costa Rica, experienced internal issues in 2013 when its employee association went broke despite once holding hundreds of thousands of dollars in deposits. This insolvency news has been alarming for Pizza Hut employees, some of whom had more than $10,000 saved in the association.
According to reports by daily tabloid Diario Extra, there have been allegations of mismanagement, malfeasance and fraud. Pizza Hut employees in Costa Rica are hoping that the liquidation of two major assets, a home in La Sabana and a farm in Turrucares de Alajuela, will allow them to get some of their savings back.




