Mexican restaurants have long been a fixture of the American dining scene, known for their affordability, approachable flavors, and ability to adapt to regional tastes. Over the decades, Tex-Mex and Mexican-inspired dining concepts have become deeply woven into U.S. restaurant culture.
However, even some of the industry’s most established brands are struggling to navigate a restaurant environment faced with rising labor and food costs, softer consumer spending, and evolving dining habits.
Over the past few years, several Mexican chains have filed for Chapter 11 bankruptcy protection and enacted large-scale closures, including Tijuana Flats, Abuelo’s Mexican Restaurant, Rubio’s Coastal Grill, and On the Border Mexican Grill & Cantina. The recent restructuring shows that customer loyalty and brand recognition no longer guarantee long-term stability.
Now, another longtime Tex-Mex chain is continuing to shrink its footprint after filing for bankruptcy and changing ownership.
Founded in 1982 in Dallas, On the Border built its reputation on Border-style Tex-Mex cuisine, hand-crafted margaritas, mesquite-grilled fajitas, and complimentary chips and salsa. But after more than four decades in business, the chain continues to scale back its store count as it navigates ongoing financial challenges.
On the Border Mexican Grill & Cantina is closing more Texas restaurants
On the Border Mexican Grill & Cantina is permanently closing several Texas locations on June 12, 2026, according to Chron, which reported the shutdowns after speaking with restaurant managers.
The affected locations include:
- Wichita Falls: 3111 Midwestern Pkwy
- Tyler: 4301 S Broadway Ave
- Texarkana: 4300 Saint Michael Dr
The latest closures are part of a broader downsizing effort that has seen the chain shutter underperforming restaurants and exit multiple markets nationwide.
Texas remains On the Border’s largest market, but the company still operates restaurants in California, Michigan, Nevada, North Carolina, Oklahoma, New Jersey, Pennsylvania, Florida, South Dakota, Arkansas, and Kansas, as of the date of publication.
At the same time, the chain has withdrawn entirely from several states, including Georgia, New York, Maine, Connecticut, Colorado, Massachusetts, and Ohio.
The company’s remaining Pennsylvania location at Neshaminy Mall is also reportedly scheduled to close, according to a Facebook post, although the company has not publicly confirmed those plans yet.
On the Border continues restructuring after bankruptcy
The latest closures come more than a year after On the Border filed for Chapter 11 bankruptcy protection in March 2025.
In court filings, the company cited declining traffic, inflation, rising labor expenses, and liquidity constraints. At the time of the filing, the chain reported more than $25 million in debt.
On the Border operated approximately 120 restaurants in 2023 but had reduced its footprint to roughly 80 locations by the time of its bankruptcy filing after closing 40 underperforming units, according to Nation’s Restaurant News.
Two months later, Pappas Restaurants acquired the brand at a bankruptcy auction to help stabilize and reposition the chain.
“This brand carries a deep heritage and a loyal community that we are proud to welcome to the Pappas family,” Pappas Restaurants Chief Marketing Officer Christina Pappas said in a statement following the acquisition. “We’re delighted to honor that history with the quality and hospitality that Pappas is known for, while continuing to evolve the brand for loyal guests, both old and new.”
Despite the ownership change, the company has continued reducing its footprint through additional restaurant closures.
Jeffrey Greenberg/Universal Images Group via Getty Images
Restaurant industry faces persistent pressure
On the Border’s struggles mirror challenges affecting the broader U.S. restaurant industry.
While inflation has eased from its peak levels, restaurant operators continue to face elevated food, labor, occupancy, and financial costs, while consumers have become increasingly selective about discretionary spending, creating additional pressure on traffic and sales.
According to the National Restaurant Association survey, 60% of restaurant operators reported lower customer traffic in December 2025, up from 51% the previous month.
Meanwhile, prices for food away from home increased 3.5% in the 12 months ending May 2026, according to the U.S. Bureau of Labor Statistics.
Industry experts say consumers have become less willing to absorb menu price increases than they were in previous economic cycles.
“In strong economic environments, price increases have historically been tolerated by restaurant guests,” food industry executive James O’Reilly told FSR Magazine. “Over the past few years, that’s become far more difficult. While headline economic indicators have improved and financial markets have strengthened, many restaurant consumers, particularly in lower- and middle-income brackets, have not experienced the same relief.”
Restaurant operators are also confronting difficult long-term economics.
According to Oysterlink, long-term survival remains challenging across the industry, with around half of restaurants closing within five years and only 34.6% remaining in business beyond a decade.
Meanwhile, food and labor expenses have each increased about 35% over the past five years, according to the National Restaurant Association.
What the closure means for the restaurant industry’s future
The latest On the Border closures highlight how quickly the restaurant landscape has changed in recent years.
Brands that once relied on decades of consumer loyalty and name recognition are increasingly being forced to reevaluate their footprints as operating costs rise and consumer spending patterns evolve.
Here’s some of my previous coverage on restaurant closures:
- Starbucks rival targets comeback after dozens of store closures
- Fast-food burger pioneer chain closes its final location
- Beloved ice cream chain closing location after 40 years
For On the Border, the latest round of closures represents another step in its ongoing restructuring efforts following bankruptcy and acquisitions.
The closures leave the chain operating with a significantly smaller footprint than it had just a few years ago, underscoring how rapidly conditions have shifted for legacy restaurant brands.
For the overall restaurant industry, it serves as another reminder that even established chains are not immune to economic pressures reshaping the sector.
Related: After bankruptcy, iconic seafood chain closes flagship restaurant