On The Border Announces Closure of Remaining Company-Owned Restaurants Following Bankruptcy Turmoil

For decades, On The Border Mexican Grill & Cantina was a familiar sight across Texas. From family dinners and after-game celebrations to endless chips and salsa, the Dallas-born Tex-Mex chain became a staple for generations of Texans.

Now, one of the most recognizable names in casual Tex-Mex dining appears to be reaching another major turning point.

Reports emerging this week indicate that On The Border is shutting down its remaining company-owned restaurants following a turbulent bankruptcy, a major acquisition, and years of declining traffic. The move marks another dramatic chapter for a brand that once operated more than 150 restaurants across the United States.

A Texas Restaurant Brand With Deep Roots

On The Border was founded in Dallas in 1982 and quickly grew into one of the country's most recognizable Tex-Mex restaurant concepts. Known for its sizzling fajitas, fresh tortillas, queso, margaritas, and endless chips and salsa, the brand expanded rapidly throughout the 1990s and 2000s.

At its peak, the chain operated more than 150 restaurants nationwide and even expanded internationally. What began as a Texas success story eventually became a national restaurant brand.

The Bankruptcy That Changed Everything

In March 2025, On The Border filed for Chapter 11 bankruptcy protection after facing mounting financial pressures. Company leaders cited inflation, labor shortages, rising interest expenses, declining customer traffic, and an underperforming restaurant footprint as major reasons behind the filing.

The bankruptcy triggered the closure of approximately 70 restaurants across the country as the company attempted to restructure and survive.

For many observers, it looked like the beginning of the end.

Enter Pappas Restaurants

In a surprising development, Houston-based Pappas Restaurants stepped in and acquired the chain through the bankruptcy process after submitting a bid reportedly valued at $15.9 million. The acquisition closed in May 2025.

The deal united two Texas restaurant brands under one ownership group.

Pappas Restaurants, known for concepts such as Pappasito's Cantina, Pappadeaux Seafood Kitchen, and Pappas Bros. Steakhouse, announced plans to revitalize On The Border through menu improvements, operational changes, and investments in the guest experience.

At the time, many Texans believed the beloved chain had been saved.

Why Are Restaurants Still Closing?

Despite the acquisition and extensive efforts to improve operations, reports this week suggest that multiple On The Border locations across Texas and several other states are now permanently closing. Restaurant managers reportedly confirmed that locations were informed of shutdowns with little notice.

OTB Hospitality released a statement saying the decision followed a thorough evaluation of the business and was not made lightly.

According to the company, its immediate focus is supporting team members through the transition while evaluating strategic options for the future of the On The Border brand.

The company also stated that franchised locations operating independently in California, Florida, Nevada, South Dakota, and South Korea are expected to remain open.

What Happens to Texas Locations?

As of June 2026, On The Border's website listed 34 locations nationwide, including 17 in Texas.

The DFW area accounted for a significant portion of those restaurants, including locations in:

• Arlington

• Bedford

• Burleson

• Cedar Hill

• Denton

• Fort Worth

• Garland

• Mansfield

• Mesquite

• McKinney

• Rockwall

• Weatherford

Additional Texas locations included Corpus Christi, Texarkana, Tyler, Waco, and Wichita Falls.

For many communities, these restaurants have served guests for decades and remain deeply connected to local memories and traditions.

From 150+ Locations to a Fraction of Its Former Size

The numbers tell a remarkable story.

On The Border operated more than 150 restaurants in late 2024. By early 2025, that number had fallen dramatically. Following bankruptcy-related closures and ongoing restructuring, the footprint continued shrinking throughout the past year.

Few restaurant chains have experienced such a rapid contraction in such a short period.

A Sign of Bigger Challenges in Casual Dining

The struggles facing On The Border are not unique.

Across the restaurant industry, chains continue to battle:

• Rising food costs

• Increased labor expenses

• Higher interest rates

• Consumer spending pressures

• Changing dining habits

Many established restaurant brands have reduced their footprints in recent years as operators focus on profitability rather than expansion.

The casual dining landscape of 2026 looks very different from the one that fueled explosive restaurant growth two decades ago.

Is This the End of On The Border?

Not necessarily.

While company-owned locations appear to be closing, the brand itself may still have a future.

OTB Hospitality says it is actively evaluating strategic options, and franchised restaurants remain in operation. Pappas Restaurants has also repeatedly expressed its belief in the strength of the On The Border name and its importance in Texas dining history.

Whether that future includes a smaller footprint, a franchise-focused model, rebranding efforts, or something entirely different remains to be seen.

Final Thoughts

The story of On The Border is one of the most significant restaurant stories in Texas this year.

Founded in Dallas in 1982, the brand helped define casual Tex-Mex dining for millions of guests. Its rise, bankruptcy, acquisition, and now the reported closure of remaining company-owned locations reflects both the challenges and realities facing the modern restaurant industry.

For Texans who grew up celebrating birthdays, enjoying family dinners, or sharing chips and salsa at On The Border, this news feels like more than a business story. It marks the potential end of a restaurant era that helped shape the state's dining culture for more than four decades.

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