This Beloved Tex-Mex Chain Just Filed For Bankruptcy—Here’s What’s Happening
Fast-casual dining has taken a major hit this past year, with old favorites like Red Lobster, TGI Friday’s and Buca di Beppo all experiencing bankruptcy woes. Add to the equation the constantly rising cost of goods and an overall decline in foot traffic and it becomes pretty clear that the restaurant industry as a whole is on the verge of some pretty big, albeit necessary changes.
Next in line to unfortunately file for bankruptcy protections is Atlanta-based On the Border Mexican Grill & Cantina. The popular Tex-Mex restaurant chain officially filed with the federal bankruptcy court in northern Georgia on Tuesday, citing “inflation” and “changing customer behavior” as the reason for the inevitable bankruptcy filing.
While the chain has already closed 40 locations as of last year, On the Border still operates 60 restaurants in 18 states. These locations are all expected to remain open during the entirety of the bankruptcy process, as well as franchisee locations, accounting for an additional 20 restaurants across the United States and South Korea.
On the Border is owned by Atlanta-based investment firm Argonne Capital Group, which also happens to operate Applebee’s, IHOP and Wingstop restaurants along with Planet Fitness and other franchises. Argonne Capital reportedly acquired On the Border back in 2014 from Golden Gate Capital, nearly 32 years after the Dallas-born restaurant was founded, in 1982. Over the years, On the Borders’ famous Tex-Mex fare quickly grew to 166 locations through the early 2000s before selling to Golden Gate Capital in 2010.
Like many other restaurant chains, On the Border’s sales began to decline during the 2008 recession, however the brand would go on to struggle even further during the years leading up to the 2020 pandemic. And while the chain experienced a rebound in sales in 2021 and 2022, the sales were back down by about 3-percent as of 2023. By that point, On the Border had already been reduced to 120 locations and never actually returned to its pre-pandemic sales and foot traffic numbers.
As we mentioned before, On the Border is just one of many restaurant chains attempting to restructure its business for the future. And while the brands court filings have reported assets and liabilities totalling between $10 million and $50 million, nothing can change the fact that consumers’ dining habits and inflation have been consistently changing the game for quite some time now.
