Looks like two Tex-Mex giants are about to spice things up by teaming up—right after one took a financial siesta with Chapter 11 bankruptcy.
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Pappas Restaurants is taking On The Border—literally. After winning an auction, they’re buying the Mexican Grill & Cantina out of bankruptcy, per a recent press release. On The Border filed for Chapter 11 in March.
The transaction, pending court approval, is expected to close soon. OTB Lender, tied to Pappas Restaurants, provided $10 million in financing during the Chapter 11 process, positioning itself as the stalking horse bidder.
The acquisition will allow the Houston-based company to grow nationally, adding 60 company-owned On The Border restaurants to its 80 existing locations.
Pappas Restaurants plans to improve On The Border’s menu, operations, and guest experience while “honoring the brand’s history and fan-favorite offerings,” according to the press release.
Why Pappas Restaurants Saved On The Border Following Chapter 11 Bankruptcy
Pappas plans to use its expertise with successful restaurant brands to strengthen and modernize On The Border locations, applying its “proven operational model and commitment to quality and hospitality.” Over the years, Pappas has expanded its portfolio by introducing new concepts and entering airports.
According to the press release, On The Border brings a value-focused approach that perfectly complements Pappasito’s Cantina’s offerings, including fajitas, hand-shaken margaritas, and a vibrant atmosphere.
“On The Border is a brand with deep heritage and loyal guests, and we see tremendous opportunity to invest in its future,” Mike Risso, CEO of Pappas Restaurants, explained in a statement. “Our shared Texas roots and passion for hospitality make this a natural fit.”
On The Border filed for bankruptcy, citing economic challenges, labor shortages, and creditor actions. In February, the chain closed 40 underperforming restaurants due to high financial costs.
On The Border once had 150 locations worldwide. It now operates in 18 U.S. states with 20 franchised locations in the U.S. and South Korea, along with company-owned units.