2 Popular Mexican Restaurant Chains Are Closing Several Locations In 2025

Mashed previously reported on beloved restaurant chains we might lose in 2025, a list that includes Red Lobster, Applebee's, and Denny's. More restaurants may be on the chopping block this year, at least based on developments at two establishments known for offering diners a selection of casual Tex-Mex fare. Both Del Taco and On the Border have recently closed a substantial number of locations throughout the country, and both companies have filed for Chapter 11 bankruptcy in an attempt to overcome mounting financial issues.

It's worth noting that many Mexican and Tex-Mex-style chains have been faring quite well lately, with top restaurants like Taco Bell and Chipotle steadily expanding. Sadly, there doesn't seem to be enough good fortune to go around, especially when you factor in the rising inflation and diminished economic growth that's putting most people in a precarious financial situation. Both of the struggling Tex-Mex chains also highlight unique challenges like labor problems and increasing expenses related to the purchase of food. There's no telling what's in store for the coming weeks and months of 2025, but it's clear that Del Taco and On the Border have a tough road ahead.

Coming in fourth in our worst-to-best ranking of Mexican fast food chains, Del Taco is a Tex-Mex establishment with locations throughout the U.S. Up until 2025, the chain had a reasonable presence in Colorado with 19 restaurants, but a financial issue resulted in all but one location shutting down. In February, Del Taco franchisee Newport Ventures suddenly closed the majority of the restaurant's Colorado locations in the wake of the franchisee's filing for Chapter 11 bankruptcy a few months prior (the remaining open location is owned and operated by a different company). Per a statement provided to USA Today, the closures are intended to be temporary, and the chain plans to "re-open these locations as soon as possible and will share updates as they become available."

As for when the re-openings are slated to occur, the future is not so clear. The chain hasn't released any official statements since the closures, and the Del Taco website still lists all Denver and Colorado Springs locations as closed. Based on the depth of the financial struggles that franchisee Newport Ventures has experienced, it seems unlikely that the company will be able to overcome these hurdles soon. It's also worth considering a statement made by chief restructuring officer Allen Soong (as reported by Nation's Restaurant News), who said, "the crew will report to their normal shifts to assist with preparing the stores for indefinite closure, after which all crew positions will be eliminated."

On the Border burst onto the restaurant scene in 1982 with the goal of offering patrons Tex-Mex-style cuisine like fajitas, tacos, and enchiladas. However, recent troubles at the chain have led to the closure of approximately 77 restaurants spread out over 24 states, including Missouri, Texas, Pennsylvania, Ohio, and Colorado, among many others. In light of its many challenges, the chain has filed for Chapter 11 bankruptcy in the belief that it can reorganize its debt and continue operating its now-truncated list of locations.

As part of the filing, On the Border is requesting that its leases at the now-shuttered locations be forgiven without payment. As explained by Jonathan Tibus, the chief restructuring officer at OTB Holding LLC (On the Border's parent company), a "rapid loss of liquidity" prevented the company from keeping up with its bills, which resulted in building owners and merchants "to cut off service, withhold goods, repossess leased premises or exercise set-off rights" (as reported by Fast Company). As for the reasons behind the chain's bankruptcy filing and closures, On the Border highlights poor performance at its restaurants, issues with finding labor, and an overall volatile market as possible explanations.