As far as I know, being made a royal is for life, so why weren't Luisa and Francisco rulers of Avalor instead of Lucia?
In order to stop being the ruler, they'd have to abdicate their claim, which would be a public show of resignation from ruling the country and allowing the next in line to become ruler in their place.
My theory is when they got older, they decided it was much more meaningful to just be grandparents and so resigned their rulership so they'd have a lot of free time to spend with their granddaughters instead of on state mandated duties.