Costa Rica´s Franchise Bill Still Pending Approval

By IDEAS

The bill that would create a new legal framework for more than 300 franchises operating in Costa Rica is still under discussion. The bill, which is called the Ley de Franquicias, was introduced to the Costa Rican Legislative Assembly in 2021 and is pending approval. 

The bill would create a new set of regulations that would protect the rights of franchisees, such as the right to receive training from the franchisor and the right to terminate the franchise agreement if the franchisor breaches the agreement. It will also promote the growth of the franchise industry and set new incentives for the franchise industry, such as tax breaks and government support.

The Ley de Franquicias is supported by the Costa Rican Franchise Association (Asociación Costarricense de Franquicias), which represents over 300 franchise brands operating in Costa Rica.

However, it has been met with some opposition from small businesses, who argue that the new regulations would be too burdensome. 

According to an article from La Nación, the bill has not been passed because there is disagreement between the different political parties in the Congress about some of the provisions of the bill. For example, some parties want to include provisions that would protect the rights of franchisees more, while others want to include provisions that would make it easier for businesses to open franchises.