Mexican chain with restaurants in 24 states files for bankruptcy in latest crushing blow to industry
Another casual dining chain has turned to bankruptcy court after assuming insurmountable debt.
On The Border Mexican Grill & Cantina – a Tex-Mex chain that offers queso, tacos, fajitas, and enchiladas – is part of the latest restaurant Chapter 11.
OTB Holding LLC, the company that owns On The Border, filed for bankruptcy on March 5 in Georgia.
In the filing, the company’s chief restructuring officer said the brand experienced a ‘rapid loss of liquidity.’
It also said some landlords ‘cut off service’ in some of its restaurants.
The company reported owning 80 restaurants in the U.S. and South Korea, but only 60 locations in 18 states remain operational.
On The Border shuttered 77 locations in 24 states recently.
The restaurant chain’s struggles are another blow to the fast casual food industry that has seen several fan-favorites turn to bankruptcy courts in the past year.
On The Border, a Tex-Mex restaurant, recently filed for Chapter 11
Former giants like Red Lobster, TGI Fridays, and Buca di Beppo all declared Chapter 11 after financial struggles.
Other chains like Hooters are also rumored to be debating bankruptcy moves.
Smaller restaurants have also used bankruptcy to reassess their debts: BurgerFi; Hwy 55 Burgers, Shakes & Fries; and Roti are all smaller-platform restaurants that have entered bankruptcy.
The restaurant industry is facing a broader downturn of customer traffic.
Shoppers have been dealing with inflationary pressures since 2021, with peak rates hitting over 9 percent in summer 2022.
Retail executives have consistently kept praising ‘resilient’ American consumers in earnings calls. But recently, traffic numbers have started to worry top bosses.
Millions of Americans have cut back on discretionary spending after a red-hot December 2024 retail period ended.
Now, even some of the largest restaurants have reported slowing sales since January 2025.
On The Border serves Tex-Mex favorites like chicken fajitas
The company said it has shuttered stores in 24 states
Starbucks has reported slowing sales. Texas Roadhouse said it has seen less interest in its restaurants after having a banner 2024.
Food inflation is broken up into two categories in the monthly consumer price index (CPI): food at home and food away from home.
Food away from home, generally food prepared at restaurants, has outpaced the rate of inflation for at-home groceries for much of the past year.
In the latest CPI, restaurant prices rose 3.4 percent.
At-home grocery prices rose 1.9 percent.
