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AN ICONIC Mexican restaurant has filed for bankruptcy in another blow for the dining industry.
The popular rival to Chipotle is just the latest chain to file for Chapter 11 bankruptcy, following dozens of recent closures.
On the Border has become the next in line to make the call in another punishing hit to the industry.
The chain filed for bankruptcy on Tuesday, with as little of half of its 2023 total locations still standing, per the outlet Restaurant business.
On the Border has shuttered more than a dozen spots in recent weeks all across the country.
As of Wednesday, the company has 66 listed locations on its books, which is less than half of its total at the end of 2023, according to Technomic data.
The filing in Georgia Northern District bankruptcy court listed On the Border’s assets and liabilities at between $10 million and $50 million.
Fans of the Mexican chain have taken to social media to express their shock.
One person on Facebook wrote: “No, how could it happen? The only suitable TexMex up North.”
Another person said: “More to come.”
And a third suggested that their local On the Border has been struggling post-COVID.
They added: “Always enjoyed On the Border… They had great fresh tortillas and fajitas.
“That location never got back up to speed after COVID.”
On the Border is owned by Atlanta-based investment firm Argonne Capital Group, which also operates Applebee’s, IHOP and Wingstop.
The chain was founded in 1982 in Dallas, Texas.
The chain’s sales and unit count began to decline starting in 2008, and was especially struggling in the years leading up to the pandemic.
It did see a slight change of fortunes in 2021 and 2022, but by the following year sales were shrinking again.
In 2023, sales were down about 3% and there were 120 locations open.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can't repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
The restaurant industry has faced tough times in the past year, and On the Border is the fourth casual-dining chain to file for bankruptcy.
Others include Red Lobster, TGI Fridays and Buca di Beppo.
The casual-dining subsection of the industry has struggled to combat inflation and growing consumer desires for quick, convenience food served quickly.
It is not yet known what this means for On The Border, and if it means any more locations will be forced to close.
Information could release in the coming days and weeks.
On the Border has shuttered more than a dozen spots in recent weeks all across the country[/caption]
