On the Border Mexican Grill & Cantina filed for chapter safety this week because it struggled to compete within the macroeconomic setting.
The Tex-Mex chain, owned by Argonne Capital Group, filed for Chapter 11 chapter safety in the USA Chapter Court docket for the Northern District of Georgia earlier this week after reportedly shuttering 40 places.
In line with its chapter submitting, the corporate operates 80 places within the U.S. and internationally.
Like its rivals, the corporate stated it has seen a decline in visitors lately, struggled to retain staff and confronted rising prices as minimal wages rose, in line with The Related Press.
FOX Enterprise reached out to Argonne Capital Group for remark.
It’s the newest in a rising variety of main restaurant chains which have filed for cover in chapter court docket after struggling to handle the heavy debt it gathered in the course of the COVID-19 pandemic.
It received’t be the final both, in line with chapter lawyer Daniel Gielchinsky, who projected there’ll probably be extra eating places submitting for cover over the approaching years.
TGI Friday’s, Denny’s, Ruby Tuesday, Rubio’s Coastal Grill and Pink Lobster have filed for cover in chapter court docket lately, with Hooters of America doubtlessly becoming a member of the checklist.
The corporate is contemplating submitting for chapter as a method of restructuring the restaurant chain and tackling its debt, sources not too long ago informed Bloomberg.
The business anticipated client spending at eating places to return to pre-pandemic ranges as soon as issues returned to regular.
However the quick-service sector began going through slowing visitors in back-to-back quarters as inflation-wary customers continued to eat at dwelling extra usually.
“Customers never came back in full force” as a consequence of adjustments of their habits and spending potential, which meant top-line income by no means rebounded and debt-ridden eating places have been unable to repay these loans, in line with chapter lawyer Daniel Gielchinsky.
Some firms that didn’t file for chapter considerably lowered their footprint to place themselves higher within the present setting, and drive visitors clients again to their eating places.
Pink Robin introduced as not too long ago as this week that it’s also contemplating closing 70 places as soon as their lease expires, because it makes an attempt to show round its operations.
The corporate plans to promote three properties in the course of the first quarter of fiscal 2025.
The sale of these places is predicted to generate $5.8 million, which the corporate anticipates shall be utilized in half to repay its debt.
Whereas monetary outcomes for fiscal 2024 “fell well below” the corporate’s unique expectations, CEO G.J. Hart stated the corporate has made “substantial improvements to the guest experience” to attempt to drive visitors again to its eating places.
Quick-food chain Wendy’s shuttered 140 underperforming places by way of the tip of 2024 because it seems to enhance its “restaurant footprint and overall system health.”
