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- Popular Tex-Mex restaurant chain files for bankruptcy (foxbusiness.com)
On the Border Mexican Grill & Cantina has filed for Chapter 11 bankruptcy protection. The Tex-Mex chain, owned by Argonne Capital Group, initiated the proceedings in the Northern District of Georgia after closing approximately 40 locations.
The company currently operates 80 locations both domestically and internationally. Citing industry-wide challenges, On the Border pointed to declining customer traffic, difficulty retaining staff, and rising costs, including increased minimum wages, as contributing factors.
This bankruptcy filing is the latest in a string of restaurant chains seeking protection. TGI Friday’s, Denny’s, Ruby Tuesday, Rubio’s Coastal Grill, and Red Lobster have all navigated similar proceedings in recent years.
Experts predict more restaurants will likely follow suit, as the industry grapples with the lingering effects of the pandemic and a changing economic landscape. Hooters of America is also reportedly considering bankruptcy as a restructuring option.
While the restaurant industry anticipated a return to pre-pandemic consumer spending, the quick-service sector has experienced slowing traffic as inflation-conscious consumers opt to dine at home. Bankruptcy attorney Daniel Gielchinsky notes that customer traffic hasn’t fully rebounded, impacting revenue and leaving debt-laden restaurants struggling to repay loans.
Several restaurant chains, including Red Robin, are downsizing to adapt to the current market. Red Robin announced plans to close up to 70 locations and sell three properties to generate funds for debt repayment.
Similarly, Wendy’s closed 140 underperforming locations in an effort to improve its overall financial health. Despite falling short of financial expectations, Red Robin CEO G.J.
Hart emphasized efforts to enhance the customer experience and drive traffic back to their restaurants.
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- Popular Tex-Mex restaurant chain files for bankruptcy (foxbusiness.com)