On the Border files for Chapter 7 bankruptcy after mass closures
On the Border files for Chapter 7 bankruptcy after closing most of its company locations.
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On the Border has filed for Chapter 7 bankruptcy following the closure of 28 company-owned locations. The brand now has only five franchised locations operating in the U.S., while facing significant liabilities and asset liquidation.
Why It Matters
This marks a substantial contraction in the brand's footprint, potentially affecting franchisee viability and the overall health of the casual dining sector. The closures may signal risks associated with franchisee operations in a challenging market.
On the Border, a Mexican casual-dining chain, has filed for Chapter 7 bankruptcy and is set to liquidate its assets following the closure of nearly all of its locations. This decision comes on the heels of the closure of 28 company-owned restaurants on June 12, leaving just five franchised restaurants operating in the U.S. and additional outlets in South Korea. The bankruptcy petition, filed on June 19 in the Southern District of Texas, reveals the company has $752,945 in assets primarily consisting of personal property, contrasted with liabilities totaling $6.2 million. Its largest creditor, Pappas Restaurants, which purchased On the Border in May 2025, is owed over $4.7 million and provided $10 million in debtor-in-possession financing during On the Border's previous Chapter 11 proceedings.
The closures are attributed to a comprehensive assessment of the business amid a prolonged decline that intensified over the past two years. Founded in Dallas in 1982, On the Border expanded significantly after being acquired by Brinker International in 1994, reaching a peak of 166 locations in 2007. However, the chain has faced continuous sales declines since the Great Recession, with significant reductions in location count over recent years, including a drop from 80 to 57 before the bankruptcy filing.
