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This Popular Tex-Mex Chain Just Closed All Its Corporate Restaurants

What's next for the once-popular, now ailing Tex-Mex restaurant chain?

By Amanda Machado , Edited by Calista Headrick

Updated July 19, 2026

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On the Border has long been a popular haunt for sizzling fajitas, queso, and casual nights out with family. However, as many folks look for ways to go out to eat more without overspending, the restaurant industry is grappling with rising costs and changing diner habits.

Now, On the Border is closing all of its corporate-owned locations, marking the end of its run as a national Tex-Mex chain. What led to the sweeping decision, what does it mean for diners, and what could be next for the once-stalwart burrito brand?

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A brand is born

Since opening its first restaurant in Dallas in October 1982, On the Border helped make the Tex-Mex dining that's endemic today an American staple.

The chain operated more than 160 individual restaurants in its heyday, becoming a quintessential go-to spot for fajitas, endless chips and salsa, and frozen, sugary margaritas. It was purchased by Brinker International in 1994, the parent company of Chili's.

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On the Border hits a rough patch

Like many businesses, On the Border struggled during the Great Recession in 2008 and in its aftermath. In 2010, Brinker International sold the brand to Golden Gate Capital, who passed the potato to Argonne Capital Group in 2014 (a major franchisee/operator of Applebee's and IHOP, among others).

On the Border struggled, but hung on up to and through the COVID-19 pandemic, followed by slightly improved sales through 2022.

On the Border's boiling point

On the Border filed for Chapter 11 bankruptcy in March 2025, reporting between $10 million and $50 million in assets and liabilities. Court filings blamed a mix of stubborn inflation, higher borrowing costs, and increasingly scant customers.

Pappas Restaurants bought the former juggernaut at a bankruptcy auction in May 2025. They rolled out menu changes and upgrades a year later, but ultimately it just wasn't enough to stop the bleeding.

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The end of an era

On June 12, 2026, On the Border Mexican Grill & Cantina shuttered all company-owned restaurants that were still operational in the U.S. The move ends the Dallas-founded chain's four-plus-decade run, another casualty of the casual dining landscape.

For aficionados, it's the latest sign of how ever-increasing costs, shifting consumer trends, and cutthroat markets have rattled the restaurant business.

Why did casual Tex-Mex fall out of favor?

For years, chains like On the Border thrived thanks to a sit-down experience that punched above its weight. But lately, diners have more choices than ever. As preferences shifted, a host of traditional casual dining chains found it harder to keep booths full.

Additionally, fast-casual brands like Chipotle and Qdoba appeal to customers looking for quicker, customizable meals, while local Mexican restaurants compete on both price and authenticity.

What will happen to On the Border employees?

While On the Border fans no doubt lament the numerous closures, many servers, cooks, dishwashers, and waitstaff may be seeking new employment.

"This was an incredibly tough decision," explains the website. The company's "immediate focus is on supporting our team members through this transition and ensuring an orderly and respectful closure," a statement added, though specifics weren't provided.

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What about On the Border franchise locations?

The unfortunate spate of closures doesn't mean On the Border is vanishing altogether. A small number of franchise restaurants are still open in Florida, South Dakota, Nevada, California, and even South Korea.

What does the future hold for On the Border?

OTB Hospitality (the company behind On the Border) originally said it was "evaluating the future of the On the Border brand and exploring a range of strategic options." On June 19, 2026, OTB Hospitality voluntarily filed for Chapter 7 bankruptcy, beginning an orderly liquidation of its remaining assets.

The fast casual landscape in context

On the Border isn't the only casual dining chain feeling the pressure. It joins brands like Red Lobster, Hooters, and TGI Fridays that have closed restaurants or seriously scaled back operations in 2025 and 2026.

Across the industry, higher labor and food costs have collided with changing consumer habits, as more folks choose to cook at home or opt for cheaper dining options instead of paying full-service restaurant prices.

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Bottom line

On the Border's corporate restaurant closures mark the end of an era. The chain introduced so many of us to Tex-Mex cuisine over the past four decades that came to be as American as apple pie.

While a handful of franchise locations remain, the corporate side of the business moved into liquidation on June 19, 2026, when OTB Hospitality filed for Chapter 7 bankruptcy. For diners, it's a reminder that even the most reliable restaurants aren't guaranteed to stick around forever if they can't withstand economic downturns.

If there's a favorite restaurant you love, it may be worth stopping by now rather than assuming it'll always be there next time you go out to dinner.

FAQs

Why did On the Border go bankrupt?

On the Border pointed to rising menu price inflation, higher labor costs, and expensive leases on underperforming stores. Customers were also dining out less often as restaurant prices climbed faster than grocery prices.

Is On the Border coming back?

It's unclear. The company's Chapter 7 filing means its remaining assets will be sold off, which could allow a new owner to eventually revive the brand, but there's no confirmed plan to reopen company-owned locations.

Who owns On the Border now?

Pappas Restaurants, a Houston-based multi-concept restaurant operator, bought On the Border out of bankruptcy in May 2025. Pappas also owns Pappasito's Cantina and Pappadeaux Seafood Kitchen.

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