Casual dining chains across the U.S. have spent the past two years cutting locations, restructuring debt, and trying to hold onto traffic as diners pull back. For On The Border Mexican Grill & Cantina, that pressure turned into a Chapter 11 filing in March 2025 and, later, the end of its company-owned presence in California.
On The Border entered Chapter 11 after earlier closures and a 60-store operating base
On The Border Mexican Grill & Cantina filed for Chapter 11 bankruptcy protection on March 4, 2025, in federal court in northern Georgia, according to the Associated Press. In court papers cited by AP, the chain said inflation, changing customer behavior, and higher labor costs had weakened the business.
At the time of the filing, the company said it had already closed 40 locations the previous month and was still operating 60 restaurants in 18 states. AP reported that franchisees also ran 20 additional restaurants in the United States and South Korea while the bankruptcy case moved forward.
The brand’s restructuring quickly drew a buyer. Nation’s Restaurant News reported on May 8, 2025, that Houston-based Pappas Restaurants planned to acquire the Dallas-founded chain after an auction process tied to the bankruptcy case. In statements reported by that outlet, Pappas executives said they saw an opportunity to invest in the brand and modernize its operations while keeping its value-oriented positioning.
That did not result in a broad reopening. CoStar reported on June 12, 2026, that On The Border decided to close all of its corporate-owned U.S. restaurants, a move the company described in a statement as part of a “significant transition” in restaurant operations.
California lost its company-owned On The Border locations, with 2 franchised sites still operating
In California, the confirmed change is narrow but significant: the state no longer has any company-owned On The Border restaurants. Patch reported that the chain’s remaining California restaurants are both franchise-operated locations in San Diego County, one in Escondido and one in Mira Mesa.
A franchise owner, Brett Almquest, told Patch that both San Diego County restaurants remained open and were continuing normal operations. That aligns with CoStar’s reporting that franchised restaurants were not expected to be affected by the June 2026 closure of corporate-owned units.
What is not publicly confirmed is a full city-by-city list of California locations that closed in the latest wave. Patch noted that the brand once had more than a dozen locations in California, including sites in the Sacramento region, the Bay Area, and Southern California, but current public reporting confirms only the two surviving franchise restaurants in San Diego County.
That means California customers looking for the chain now have a much smaller map than they did even a few years ago. Based on Patch’s reporting, the California footprint has been reduced to two open restaurants, both outside the company-owned system that exited the market.
Inflation, labor costs, and weaker traffic help explain the chain’s retreat from California
The reasons cited for the bankruptcy were broader than California alone. AP reported that On The Border told the court diners were eating out less as restaurant inflation outpaced grocery prices, while rising minimum wages in many states added pressure to operating costs. The company also said it was struggling to recruit and retain workers.
Industry trade reporting pointed to operating decline before the bankruptcy filing. Nation’s Restaurant News reported that On The Border’s 2024 sales fell 23% and its unit count declined by more than 18%, showing that the chain’s problems were already substantial before the court process began.
California appears to be part of that larger national retrenchment rather than a stand-alone shutdown. CoStar reported that when Pappas acquired the business, On The Border had 60 company-owned restaurants across 18 states and 20 franchised locations in the United States and South Korea. After the June 2026 corporate-store closures, the franchised restaurants, including the two in California, were the locations left standing.
For California residents, the practical takeaway is straightforward. There are still two On The Border restaurants operating in San Diego County, but no company-owned California locations remain, and the company has not released any public reopening plan for the state.