On the Border Mexican Grill & Cantina has sought protection under bankruptcy law, attributing its financial struggles to inflation and evolving customer habits.
The chain, backed by the Atlanta-headquartered Argonne Capital Group, submitted its filing this Tuesday in a federal bankruptcy court situated in northern Georgia. On the Border’s move aligns with similar actions made by other casual dining chains in the past year, including Red Lobster and TGI Fridays.
In documents presented in court, On the Border disclosed that a shift in consumer dining habits, driven by the fact that restaurant price hikes have surpassed grocery cost increases, has impacted their business. The chain has also faced escalating operating expenses due to rising minimum wages in several states and has encountered challenges in hiring and retaining staff.
Just last month, the chain shuttered 40 of its establishments. Nonetheless, it continues to operate 60 restaurants across 18 states, which will remain open throughout the bankruptcy process. Furthermore, franchisees manage another 20 locations operating across the United States and South Korea, according to the company.
The company has also announced that it anticipates finalizing a transaction for the sale of its assets in the near future.
On the Border debuted with its inaugural eatery in Dallas back in 1982. In 1994, the chain was purchased by Brinker International, the parent company of Chili’s, and began expanding through franchising. By 2001, the chain had grown its presence to over 100 restaurants within the U.S., and by 2007, it had ventured into the South Korean market.
In 2010, Brinker divested On the Border to Golden Gate Capital, and in 2014, Golden Gate then sold the chain to its current owner, Argonne.
