A Major Mexican Restaurant Chain’s Franchisee Just Filed Bankruptcy! 16 Locations Are Closing

Restaurant bankruptcies have continued to ripple across the U.S. food industry as operators face higher costs, weaker traffic and debt pressures. In the Mexican quick-service segment, Del Taco franchisee Matadoor Restaurant Group became a notable case after its July 15, 2025 bankruptcy filing and the later closure of 16 restaurants tied to its Georgia and Alabama footprint, according to court filings and Del Taco statements reported by Restaurant Dive.

Matadoor filed for Chapter 11 as its Del Taco footprint began to shrink

Matadoor Restaurant Group filed for Chapter 11 bankruptcy protection on July 15, 2025 in the U.S. Bankruptcy Court for the District of South Carolina, according to court filings cited by Restaurant Dive. At the time of the filing, the franchisee operated 22 Del Taco restaurants across Georgia and Alabama and listed an estimated 100 to 199 creditors, with liabilities estimated between $1 million and $10 million. Restaurant Dive reported that Matadoor is wholly owned by Red Door Brands.

The closure count grew in the months after the filing. Restaurant Dive reported on February 24, 2026 that all 14 of Matadoor’s Georgia Del Taco locations had closed as of the prior week, a figure Del Taco confirmed by email. The chain also no longer listed any open Del Taco restaurants in Georgia on its website at that time.

That left Alabama with only one Del Taco location still listed as open on the company’s website, according to the same report. Based on the 22-unit footprint Matadoor operated when it entered bankruptcy and the later count of one Alabama restaurant still open alongside zero in Georgia, the closures tied to the franchisee totaled 16 locations that had shut down by late February 2026. Del Taco stated that the Georgia closures occurred without prior notice to the franchisor.

Georgia absorbed the largest confirmed impact, while Alabama details remain limited

Georgia accounts for the clearest confirmed losses in this case. Del Taco confirmed to Restaurant Dive that 14 Georgia restaurants had closed, and the outlet reported those stores had been spread across 12 Georgia cities as of an archived version of Del Taco’s website dated January 16, 2026. The company also said the closures affected the Atlanta, Columbus, Macon and Chattanooga regions of Georgia.

The company has not released a comprehensive public list of every affected Georgia city in the closure announcement itself. That means broad regional information is confirmed, but a full city-by-city closure roster was not publicly detailed in the reporting cited here. One previously indexed Apple Maps listing showed a Del Taco in Tucker marked permanently closed, but Del Taco did not publish a full official list within the source material reviewed.

Alabama’s impact is narrower in confirmed public reporting but less precisely documented at the city level. Restaurant Dive reported in February 2026 that only one Alabama Del Taco location operated by Matadoor was still listed as open on the chain’s website. The company has not released a full list of the affected Alabama locations or identified each city publicly in the source material reviewed.

Court filings point to falling sales, rising costs and expensive short-term debt

Matadoor attributed its financial deterioration to several pressures in court filings cited by Restaurant Dive. The franchisee said it began to struggle in the second half of 2024 because of company growth, an unexpected decline in sales and rising operational costs. Those are the causes directly identified by the company in the bankruptcy record.

The filings also described how Matadoor turned to merchant cash advance financing while trying to manage cash flow problems. According to Restaurant Dive’s summary of the court documents, the company took out 10 merchant cash advance loans from nine creditors totaling about $2.7 million. Matadoor said those loans carried excessive fees, high effective interest rates and aggressive repayment schedules that worsened its debt load.

Del Taco itself was also facing brand-level headwinds at the time. Restaurant Dive reported that Del Taco posted same-store sales declines in 2025, including a 3.6% drop in fiscal second-quarter same-store sales and a 3.9% decline in fiscal fourth-quarter same-store sales under prior owner Jack in the Box. For customers, the immediate reality is that the closed Georgia restaurants were no longer operating as of late February 2026, while Del Taco said it was exploring options to reopen those units and would share updates once plans were finalized.