Sometimes retail businesses open locations that end up not being as profitable as expected. There can be a number of reasons for this. It could be due to a lack of interest in the products at that location. It could be due to a population shift where fewer customers than expected frequent the location. Or it could even be due to overhead prices, like an expensive lease, causing a relatively busy location to still struggle to make a profit.

Mexican restaurant On the Boarder is struggling to make a profit at quite a few of their retail locations, and a major reason is due to expensive leases for locations that don’t even make enough money to pay the lease.

As a result, the company has made a few big moves. The Street reports that on March 5, 2025, the company filed for chapter 11 bankruptcy. As of this same date, the company had 115 locations, but that is about to change. They announced that they are closing 80 of these locations. In addition, they are asking the court to release them from the lease obligations for many of their locations because the locations do not make enough money to pay the lease.

Does this mean On the Boarder is on the way to closing all of their restaurant locations for good? Hopefully not.

The company would like to keep the brand alive. In January, they hired Hilco Corporate Finance. According to the bankruptcy statement, “At the debtors’ direction, Hilco approached interested parties to secure a stalking horse bidder for the sale of the Debtors’ assets pursuant to Section 363 of the Bankruptcy Code”

“In total, during the sale process, Hilco contacted 273 strategic and financial potential bidders to serve as a potential stalking horse bidder, of which 31 ultimately negotiated confidentiality agreements and were provided a confidential information memorandum.”

On the Boarder was founded in 1982. The Tex-Mex chain is known for fajitas, margaritas and chips and salsa.

Do you think this restaurant chain will be able to restructure enough that it will survive?