On the Border Mexican Grill & Cantina shut down all 60 of its company-owned locations on June 12, 2026, marking the end of the Dallas-founded Tex-Mex chain’s four-decade run as a corporate entity.
The closure came just over one year after Houston-based Pappas Restaurants acquired the struggling chain in May 2025 following a bankruptcy auction. Pappas had stepped in as the winning bidder after On the Border filed for Chapter 11 bankruptcy protection in March 2025, citing macroeconomic headwinds and rising labor costs that had eroded its profitability.
On the Border opened its first location on October 29, 1982, in Dallas and built a reputation over more than four decades on sizzling fajitas, hand-pressed tortillas, and signature margaritas. At its peak, the chain operated over 120 locations across the United States.
When the company filed for bankruptcy in early 2025, it had already closed more than 70 locations. According to USA Today, the chain had been “weighed down in recent years by macroeconomic factors that have negatively impacted the Company,” as stated by OTB Holdings Chief Restructuring Officer Jonathan Tibus in court filings. Casual-dining restaurants faced acute pressure from consumers choosing to eat at home rather than dine out, compounded by rising food and labor expenses.
Pappas Restaurants, a Houston-based family-owned business, acquired the chain’s assets and reopened many locations under its portfolio, which also includes Pappadeaux Seafood Kitchen, Pappasito’s Cantina, and Pappas Bros. Steakhouse. In May 2026, Pappas announced that On the Border had undergone “a sweeping menu overhaul” with enhanced food quality and strengthened operations.
However, the turnaround effort proved short-lived. On June 12, OTB Hospitality announced the closure of all company-owned restaurants, stating the decision “was not made lightly” and followed “a thorough evaluation of the business.” The company said it is “currently evaluating the future of the On The Border brand and exploring a range of strategic options.”
Franchise locations in South Dakota, Florida, Nevada, California, and South Korea will continue to operate independently, according to the statement. Company-owned restaurants in Michigan, Pennsylvania, Texas, Oklahoma, and other states closed their doors by the end of June 12.
On the Border joins a growing list of casual-dining chains that have filed for bankruptcy or closed significant portions of their operations in recent years, including Red Lobster, Hooters, and TGI Fridays. The restaurant industry has faced sustained pressure from elevated labor costs, food inflation, and shifting consumer preferences in 2026, with half of all Texas restaurant operators failing to earn a profit, according to Houston Public Media.
Sources
- USA Today — Core facts on the 60-location closure on June 12, 2026, the March 2025 bankruptcy filing, Pappas Restaurants’ May 2025 acquisition, founding date of 1982, macroeconomic pressures, and franchise locations remaining open.
- New York Post — Confirmation that On the Border shut down all 60 company-owned locations while franchise locations remain open.
- Restaurant Dive — Details on Pappas Restaurants winning the bankruptcy auction in May 2025 and the March 2025 Chapter 11 filing.
- Houston Public Media — Confirmation of Pappas Restaurants’ bankruptcy acquisition and broader context on Texas restaurant industry profitability challenges.
- NJBIZ — Attribution of the March 2025 bankruptcy filing to inflationary pressures, rising labor costs, and changing consumer behavior.
- WFAA — Confirmation of the 1982 Dallas founding and the chain’s reputation for sizzling fajitas and margaritas.
