A Major Restaurant Operator Behind KFC, Taco Bell and More, With Around 180 Restaurants, Files for Chapter 11 Bankruptcy

Encanto Restaurants, Inc. has filed for Chapter 11 after Yum! Brands ended its franchise relationship with the company.

Written By Twinkle Jha
Representative Image, Encanto Restaurants, Inc. enters bankruptcy (Image credit: Photo By Huu Huynh from Pexels)

Encanto Restaurants, Inc. is a Puerto Rico-based restaurant operator that manages four dining brands. The company has filed for Chapter 11 protection following Yum! Brands’ decision to end its franchise relationship with the operator. The development comes amid the temporary closure of KFC and Taco Bell locations across the country while the brands seek a new franchise partner.

Note: Chapter 11 allows businesses to reorganize their debts while continuing operations under court supervision. A Chapter 11 filing does not necessarily mean that a business is closing. For additional information, readers are encouraged to contact the business directly.

Encanto Restaurants, Inc. Files for Chapter 11

According to court records available through PACER, Encanto Restaurants, Inc. filed its Chapter 11 petition on November 5, 2026. The filing does not specify a reason for the bankruptcy.

The move follows changes to the company’s long-standing association with Yum! Brands. According to the Associated Press, the Kentucky-based company said the operator could no longer adhere to its standards. The actions continued as all KFC and Taco Bell restaurants face temporary closures in Puerto Rico. Both brands said they were looking for a new franchise partner to reopen the locations.

Yum! Brands also said it remained committed to Puerto Rico and was working to bring customers back to its restaurants as soon as possible.

About the Company

Encanto Restaurants, Inc. manages a range of dining companies, including KFC, IHOP, Pizza Hut, and Taco Bell. The company website shows that it was established in 2004 and has since been an exclusive operator of these brands across the island.

As of now, it operates more than 180 restaurants across Puerto Rico and employs over 3,000 people. The restaurant portfolio spans fried chicken, pizza, breakfast and casual dining, and Mexican-inspired fast food.

Highlights from the Petition

Court records show that the restaurant company has listed more than 200 creditors in the filing. Some of them with the largest unsecured claims are Banco Popular de PR, Arco Publicidad, KFC International Holdings, LLC, and the Treasury Department of Puerto Rico.

These claims are tied to rent arrears, insurance financing, food supplies, advertising, utilities, royalties, and other areas.

Filing records indicate that after any administrative expenses are paid, no funds will be available for the unsecured creditors.

According to the financial figures reported in the bankruptcy filing, Encanto Restaurants has approximately $123.9 million in liabilities and $29.8 million in assets.

Humberto Rovira, the company’s president, signed the petition before it was submitted with these details.

Attorney Alexis-Fuentes Hernandez of Fuentes Law Offices, LLC is representing the company in court.

A summary of the Chapter 11 petition is shared here:

  • Filing Date: November 5, 2026
  • Court and Jurisdiction: U.S. Bankruptcy Court for the District of Puerto Rico
  • Type of Filing: Active, Voluntary Petition
  • Chapter: 11
  • Case Number: 26-05345-11
  • Estimated Assets: Between $10,000,001 and $50 million
  • Estimated Liabilities: Between $100,000,001 and $500 million
  • Estimated Creditors: Between 200 and 999

The upcoming court rulings are expected to be instrumental in determining the future operations of Encanto Restaurants, Inc.

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Twinkle Jha is a content writer passionate about crafting engaging and informative pieces for diverse audiences. She holds a degree in Journalism & Mass Communication that helps her create news-based articles related to restaurants, retail, and real estate in the US. With five years of writing experience, Twinkle has a strong base for her research, allowing her to create compelling content. Her keen eye for detail and creative approach make her writing stand out. When not working, she loves to watch movies.
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