On The Border Tex-Mex chain joins list of bankrupt restaurants after closing locations across 24 states

Causal dining chains had a pretty bad 2024 when it came to solvency issues. Major chains, including Red Lobster, TGI Fridays, and Roti, all filed for Chapter 11 bankruptcy protection last year. And 2025 doesn’t seem to be fairing better for more restaurants.

The latest restaurant chain to file for Chapter 11 bankruptcy protection is the Tex-Mex casual dining chain On The Border Mexican Grill & Cantina. Here’s what you need to know about the company’s bankruptcy filing.

Why is On The Border filing for bankruptcy?

On March 5, OTB Holding LLC, owner of the On The Border chain, announced it had voluntarily filed for Chapter 11 bankruptcy protection in Georgia. In the press release announcing the bankruptcy filing, the restaurant chain did not explicitly state why it filed for Chapter 11 protection.

However, many casual dining chains have struggled with declining foot traffic in recent years as inflation-weary consumers opt to save money by staying home and cooking instead of eating out.

On The Border’s president, Chris Rockwood, said that the “restructuring is the best path forward for On The Border. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.”

In a court filing with the U.S. Bankruptcy Court in the Northern District of Georgia, OTB’s chief restructuring officer, Jonathan M. Tibus, said the company had faced a “rapid loss of liquidity” in recent months, which resulted in it having to “quickly institute holds on vendor payments and rent payments to maintain cash.”

This, in turn, has led landlords and vendors “to cut off service, withhold goods, repossess leased premises or exercise set-off rights,” which “resulted in the Company losing stores, additional operational challenges, and a severe liquidity crisis.”

How many restaurants does On The Border have?

According to the company, there are 80 On The Border restaurants across the United States and South Korea. A court filing reveals that the majority of those are in the United States.

As the filing states, OTB currently operates 60 restaurants in the United States across 18 individual states.

Are On The Border locations closing?

The company hopes to continue operating. However, a court filing indicates that it has already closed at least 77 locations that were deemed underperforming or were expected to drive losses. On The Border has asked a court to allow it to reject the leases on these locations

The list of locations it has closed spans 24 states: Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Texas, Virginia.

“The Debtors are no longer occupying, nor have use for, the Leased Premises,” the court filing states.

By filing for Chapter 11 bankruptcy protection, the company hopes to restructure itself and look for a buyer who would presumably keep operating the brand.

In the company’s press release announcing its Chapter 11 filing, OTB stated, “The Company intends to use the proceedings to drive operational improvements and pursue a sale of substantially all of its assets.”

The company also said that its remaining locations will remain open and operating as normal throughout the Chapter 11 process. 

What about On The Border employees?

According to court documents, On The Border currently employs about 2,800 workers. Of those, 375 are full-time hourly employees and 216 are full-time salaried employees. The remaining 2,210 workers are part-time hourly employees.

The court documents state that the company has filed “first day” relief pleadings in which it seeks permission to keep paying worker’s wages.

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