On the Border Mexican Grill & Cantina has filed for bankruptcy protection, citing pressure from inflation and changing customer behavior.
The chain, which is owned by Atlanta-based Argonne Capital Group, filed Tuesday in federal bankruptcy court in northern Georgia. It joins several other casual chains that have filed for bankruptcy protection over the last year, including Red Lobster and TGI Fridays.
Why On the Border filed for bankruptcy protection
In court papers, On the Border said customers dined out less in recent years as restaurant inflation outpaced grocery prices. The chain said rising minimum wages in many states also added to its costs, and it has struggled to recruit and retain workers.
Last month, On the Border closed 40 locations. It still operates 60 restaurants in 18 states, which will remain open while the bankruptcy proceeds. Franchisees run an additional 20 restaurants in the U.S. and South Korea, the company said.
What's next for On the Border
On the Border said it expects to complete a sale of its assets soon.
On the Border opened its first restaurant in Dallas in 1982. In 1994, it was acquired by Chili's owner Brinker International, which began opening franchised locations. By 2001, On the Border had more than 100 restaurants in the U.S. It expanded into South Korea in 2007.
Brinker sold On the Border to Golden Gate Capital in 2010, and Golden Gate sold the chain to Argonne in 2014.
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What other restaurant chains have filed
Red Lobster filed for Chapter 11 bankruptcy in 2024, struggling with lease and labor costs. In May, it filed documents seeking to renegotiate lease agreements on more than 100 locations, including the Bourbonnais and Michigan City locations.
In September, a bankruptcy court approved Red Lobster's plan to exit Chapter 11, putting it closer to exiting bankruptcy.
Restaurant chain TGI Fridays filed for bankruptcy protection in November, looking for ways to “ensure the long-term viability” of the casual dining brand after closing many of its branches.
TGI Fridays Executive Chairman Rohit Manocha in a statement said the "primary driver of our financial challenges resulted from COVID-19 and our capital structure."
According to CNBC, at least 10 restaurant chains filed for bankruptcy in 2024, including Roti and Buca di Beppo.
Meanwhile, Chi-Chi's, a popular Mexican restaurant chain from the 1990s that had hundreds of locations across the U.S. including in the Chicago suburbs, announced in December it's officially making a comeback after more than two decades.
