Popular Tex Mex Restaurant Files For Bankruptcy — Closes Stores in Iowa and Illinois

Another well-known restaurant chain is feeling the heat, and it's not from their salsa. On The Border Mexican Grill & Cantina, famous for its sizzling fajitas, queso, and margaritas, has filed for Chapter 11 bankruptcy protection after struggling with financial losses and declining customer traffic.

Why Did On The Border File for Bankruptcy?

On March 5th, OTB Holding LLC, the company behind On The Border, filed for bankruptcy in Georgia, citing major financial struggles. The company’s bankruptcy filing revealed that the chain had suffered a “rapid loss of liquidity”, forcing it to pause rent and vendor payments to stay afloat. In response, some landlords and vendors cut off service or repossessed locations, pushing the chain deeper into crisis and closing many locations, with no way for On The Border to keep them operational. On The Border has faced declining customer traffic as inflation pushes more people to dine at home instead of eating out.

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Store Closures Across the Country

In an effort to cut costs, On The Border has already shut down 77 locations across 24 states, including Iowa and Illinois. As part of its bankruptcy process, the company is asking the court to reject leases on these closed locations. Other states affected include: Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Texas, Virginia.

Despite the closures, 60 On The Border restaurants remain open across 18 states. This officially leaves just one restaurant operational in Illinois for the entire region. The company says it will continue operating while looking for a buyer to acquire its assets with hopes to keep the brand alive.