On the Border closes most of its locations
On the Border shuts down most locations in a major downturn for the brand post-bankruptcy.
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On the Border has closed the majority of its company-owned locations, reducing its footprint from 80 locations to just five franchised units in the U.S. This decision comes shortly after its acquisition by Pappas Restaurants and follows a period of intense sales decline and operational evaluation.
Why It Matters
These closures suggest a substantial contraction of On the Border's operational capacity, which may lead to challenges in franchisee support and territory availability for potential franchisees.
On the Border has ceased operations at all of its corporate restaurants, closing 27 locations as part of a strategic reevaluation of the brand. This decision comes just over a year after the Mexican casual-dining chain exited bankruptcy under new ownership by Pappas Restaurants. Following the closures, On the Border has reduced its footprint to only five franchised locations in the U.S., located in South Dakota, Florida, Nevada, and California, as well as one franchised outlet in South Korea.
Over the past 18 months, On the Border has experienced a significant decline in unit count, dropping from 80 locations at the time of its acquisition by Pappas in March 2025 to just five remaining corporate units. This drastic reduction represents a closure of approximately 77 locations as part of ongoing challenges with unit economics and market performance. The brand's sales have declined nearly 33% over the past year, contributing to a 42% decrease in total unit count, according to Technomic.
A statement from OTB Hospitality highlighted the intense scrutiny of the restaurant's operations leading to this decision: “This decision follows a thorough evaluation of the business and was not made lightly. We are currently evaluating the future of the On The Border brand and exploring a range of strategic options.” The closures signal serious concerns about the overall health of the brand and raise questions about potential contagion risks within the franchise system.
