Pappas Restaurants, a Texas-based, family-owned business founded in 1897, is preparing to acquire On The Border Mexican Grill & Cantina, aiming to facilitate the Tex-Mex restaurant chain’s emergence from bankruptcy, as reported by Bloomberg.
On The Border was established in Dallas in 1982 and operates in 80 locations across the US and South Korea.
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Pappas Restaurants, the parent of brands Pappas Bros. Steakhouse, Pappas Bar-B-Q and Pappadeaux Seafood Kitchen, has submitted a bid in the bankruptcy court sale process.
Court documents show an affiliate of Pappas Restaurants as the lender of the recent bridge and other financing to the bankrupt company.
The filings suggest that this lender is likely to act as a stalking-horse bidder, effectively positioning itself as the primary buyer if no competing offers materialise.
Representatives for both On The Border and Pappas Restaurants have not commented.
In early March 2025, On The Border, which filed for bankruptcy protection in the US Bankruptcy Court for the Northern District of Georgia, faced rising labour costs, declining customer visits and inflationary pressures.
Its president Chris Rockwood stated: “This restructuring is the best path forward for On The Border. It allows us to address several financial and operational challenges and emerge stronger and refocused on our growth.
“The support we’ve received from our vendors and lenders will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”
The Pappas family currently manages nine distinct dining brands.
On The Border opened its first restaurant in South Korea in 2007. At its peak in 2010, the chain had 160 locations.
According to BankruptcyData, restaurant companies and franchisees filed for credit protection in 2024 at rates not observed since 2020.
In November, casual dining chain TGI Friday’s filed for Chapter 11 of the US Bankruptcy Code in the Northern District of Texas.
