The Once-Popular Mexican Chain Saved From Bankruptcy By A Restaurant Group

At its height, On The Border Mexican Grill & Cantina was everywhere. It had more than 150 locations stretched across the U.S. and abroad, including a South Korean expansion that signaled its international ambitions. For a while, it was one of the most recognizable casual-dining Mexican chains, serving sizzling fajitas and mesquite-grilled plates to families who wanted Tex-Mex in a sit-down setting. 

Then, financial troubles began to stack up. Inflation and higher food costs squeezed profits, while labor shortages made it harder to keep kitchens running smoothly. At the same time, the company was sinking money into underperforming stores, pouring more than $11 million into lease payments for locations that weren't pulling their weight. Eventually, On The Border had little choice but to seek Chapter 11 protection, reporting $25 million in debt after shuttering nearly half of its restaurants.

Customers had noticed the cracks, too. As On The Border began going downhill, many patrons agreed that it had become one of the worst Mexican chain restaurants — a far fall for a brand once seen as a go-to for Tex-Mex. Locations across the country quietly locked their doors, sometimes without even telling employees. A chain that once symbolized an affordable, family-friendly environment was suddenly at risk of vanishing entirely.

On The Border's story didn't end with a host of closed locations. A judge signed off on its sale to Pappas Restaurants, a Houston-based group behind Pappadeaux Seafood Kitchen (which Beyoncé apparently loves), Pappas Bar-B-Q, and Pappasito's Cantina. To keep the brand afloat during the process, the family-named investors fronted $10 million in financing, then outbid Salud Brands to win the chain. 

The payoff is significant: On The Border brought in close to $225 million in U.S. sales since the purchase, giving Pappas control of the country's second-biggest Mexican casual-dining brand overnight. That family name carries weight in Texas dining, and the group has hinted at big changes ahead. Plans include overhauling the menu, tightening up day-to-day operations, and putting more emphasis on hospitality. It's an approach they believe will play well alongside Pappasito's crowd-pleasing fajitas and margaritas. With that kind of backing, On The Border's future suddenly looks more stable.

Still, a revival doesn't erase what was lost. For some, shuttered locations mean more than missed enchiladas. On Reddit, one longtime diner recalled being taken to On The Border as a teenager by an aunt who later passed away. It was a memory that made revisiting the restaurant years later bittersweet. Those connections are harder to rebuild. While other Tex-Mex restaurants — like Barrio Burrito Bar — climb in popularity, Pappas faces the challenge of restoring not just sales, but sentiment.