(WJET/WFXP) — On The Border, a casual Tex-Mex dining chain, filed for Chapter 11 bankruptcy this week.
The company currently operates around 60 locations across the United States, and these locations are expected to remain both open and operational during the process.
According to court documents, On The Border reported between $10 million and $50 million in assets and liabilities. A press release from the company states that they have received $10 million in funding to ensure continued operations during the Chapter 11 process. The company also says that they intend to enter into an asset purchase agreement with an affiliate company within the coming weeks.
Court documents revealed that the company spent $25.3 million on lease payments in 2024, of which $11.8 million were for underperforming locations, causing extreme stress to the company’s liquidity.
According to Bloomberg, the company has seen a “rapid loss of liquidity” in recent months, prompting it to not pay certain bills. This, inevitably, led to vendors and landlords cutting off goods and services. The chain has also closed around 40 locations within the past few months.
Court documents show the company is seeking court approval for permission to continue employee payments as well as to continue its customer rewards program.
“This restructuring is the best path forward for On The Border. It allows us to address several financial and operational challenges and emerge stronger and refocused on our growth,” said Chris Rockwood, the Company’s President. “The support we’ve received from our vendors and lenders will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”
On The Border joins a growing list of food service companies that have closed locations across the nation or have also filed for bankruptcy protection in the past year.
The most notable of these bankruptcies include TGI Friday’s, Red Lobster, and Buca di Beppo. Many of these cited similar shortfalls following a slump caused by the COVID-19 pandemic, including increased inflation and labor costs and a major shift in customer spending habits.
Founded in Dallas in 1982, On The Border has more than 80 restaurants in the U.S. and South Korea, where it opened its first location 18 years ago. It is currently owned by Atlanta-based investment firm Argonne Capital Group, which also operates Applebee’s, IHOP, and Wingstop restaurants as well as Planet Fitness and other franchises after an acquisition from Golden Gate Capital in 2014.
