Major Tex-Mex Chain Just Filed for Bankruptcy After Closing Dozens of Locations

Due to various factors, it's been a rough couple of years for casual dining chains, culminating in fewer people dining out and food becoming more expensive. Every week, another restaurant closes locations, reports significant revenue losses, or files for bankruptcy. This week, a large Mexican chain became the latest to suffer an economic downfall. Here is what you need to know about the latest Chapter 11 filing.

On the Border Filed for Chapter 11 This Week

On Tuesday, Mexican chain On the Border filed for Chapter 11 bankruptcy. Over the past few weeks, the company has closed over 12 restaurants across the country and, according to data, currently operates half as many restaurants as it did at the end of 2023.

It Is Operated by Argonne Capital Group

On the Border, founded in 1982 in Dallas, Texas, is operated by Argonne Capital Group. The company also owns Applebee's, IHOP, and Wingstop restaurants, as well as Planet Fitness and other franchises, under its wing.

It Will Help Them "Refocus" on Growth

According to Fast Company, On The Border's president, Chris Rockwood, explained that the "restructuring is the best path forward for On The Border. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth." In the court filing with the U.S. Bankruptcy Court in the Northern District of Georgia, On the Border's assets and liabilities were between $10 million and $50 million.

The Brand Has Experienced a "Rapid Loss of Liquidity"

OTB's chief restructuring officer, Jonathan M. Tibus, states that the brand has experienced "rapid loss of liquidity" in recent months, resulting in it having to "quickly institute holds on vendor payments and rent payments to maintain cash." This has led landlords and vendors "to cut off service, withhold goods, repossess leased premises or exercise set-off rights," which "resulted in the Company losing stores, additional operational challenges, and a severe liquidity crisis."

Red Lobster Filed for Bankruptcy in May 2024

Over the past year, three other major casual dining brands have filed for bankruptcy. On May 19, 2024, Red Lobster confirmed it filed for Chapter 11 bankruptcy, stating that 580 restaurants would remain open through the restructuring process. "This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth. The support we've received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests," CEO Jonathan Tibus said at the time. By September, they managed to exit Chapter 11, "stronger, more resilient, and ready for a bright new chapter," they said on social media at the time.

TGI Fridays Filed for Bankruptcy in November 2024

Then, after October rumors, in November 2024, TGI Friday's confirmed it filed for Chapter 11 bankruptcy, maintaining that it only impacted the chain's 39 company-owned locations and confirming it had secured funding to keep those restaurants operational throughout the Chapter 11 process.6254a4d1642c605c54bf1cab17d50f1e

Buca Di Beppo Filed for Bankruptcy in August 2024

Buca di Beppo filed for bankruptcy in August 2024, a week after closing 13 underperforming locations. In a press release, the company said this move is "aimed at optimizing operations and enhancing the dining experience."