Encanto Restaurants, Inc., a major operator of Yum! Brands franchises in Puerto Rico, filed for Chapter 11 bankruptcy protection on November 5, 2026. Yum! Brands had terminated its franchise relationship with Encanto, citing the company’s inability to meet its operational standards.
The termination led to the temporary closure of all KFC and Taco Bell restaurants operated by Encanto in Puerto Rico. Yum! Brands said it is seeking a new franchise partner to reopen the locations. The bankruptcy and closures have significantly disrupted Yum! Brands’ presence in Puerto Rico.