After Chapter 11 bankruptcy, Mexican chain closes 77 locations

That may just be the beginning as the company needs help from the bankruptcy court and its lenders to survive.

Mar 17, 2025 - 14:56
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After Chapter 11 bankruptcy, Mexican chain closes 77 locations

In many cases, a bankruptcy filing can be a pause, a chance to restructure operations and move forward. When it's a retailer or restaurant filing for Chapter 11 bankruptcy protection, part of the process usually involves closing some failing stores. 

That's generally a positive as most retailers and restaurants have a handful of locations where the economics no longer makes sense. The covid pandemic, for example, caused some companies to allow workers to work from home or offer hybrid work schedules.

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Because of that, some retailers and restaurant chains found themselves with locations that no longer had enough customers. People simply no longer visited the areas where some locations operated in big enough numbers to justify keeping the store open.

Even a healthy chain like Starbucks closes dozens of stores each year due to population shifts, When that happens, the company either operates the store until its lease expires, or closes and pays off the lease.

A bankruptcy filing allows a struggling retailer or restaurant chain to close locations and, in some cases, get out of their lease obligations.

On the Border sells Mexican classics including tacos.

Image source: Shutterstock

On the Border wants out of its leases  

When On the Border filed for Chapter 11 bankruptcy on March 5, the company immediately closed nearly 80 locations. That's almost two-thirds of its stores, according to the Chapter 11 bankruptcy filing.

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