Casual dining chain On the Border Mexican Grill & Cantina has filed for Chapter 11 bankruptcy protection, following the closure of 40 underperforming restaurants last month.
The filing adds On the Border to a growing list of restaurant chains, including Red Lobster, TGI Friday’s, and Bucca di Beppo, that have struggled with economic challenges, rising costs, and labor shortages.
Why Did On the Border File for Bankruptcy?
According to court documents, On the Border currently operates 60 company-owned locations and has estimated liabilities between $10 million and $50 million.
Chief Restructuring Officer Jonathan Tibus cited multiple reasons for the bankruptcy, including:
- Difficult economic conditions
- Labor shortages affecting operations
- Underperforming restaurants that couldn’t sustain profits
- Creditor enforcement actions due to outstanding debt
The company closed 40 “non-performing” locations in February 2025, a move meant to help stabilize its business. However, financial struggles continued, leading to the bankruptcy filing this week.
A Growing Trend: Other Restaurant Chains Facing Financial Struggles
On the Border isn’t alone—several well-known casual dining chains have filed for bankruptcy protection in recent months:
1. Red Lobster (June 2024)
- Filed for Chapter 11 bankruptcy in Florida
- Planned to close locations and simplify operations
- Recently exited bankruptcy after receiving approval from a federal judge
2. TGI Friday’s (November 2024)
- Cited financial struggles from the COVID-19 pandemic
- Filed for Chapter 11 bankruptcy to restructure and stabilize operations
3. Bucca di Beppo (August 2024)
- Filed for bankruptcy in Texas
- Blamed rising costs and hiring difficulties for financial troubles
What’s Next for On the Border?
While bankruptcy doesn’t necessarily mean closure, On the Border will likely:
- Restructure its debts to stay in business
- Reevaluate operations to focus on profitable locations
- Potentially sell assets or locations to other investors
For now, 60 company-operated On the Border locations remain open, and customers can still visit the chain while bankruptcy proceedings unfold.