Popular Mexican Chain Declares Bankruptcy and Shutters Restaurants
It has been a tough decade for the restaurant business. A global pandemic, which resulted in months-long dining disturbances, inflation, rising food costs, and less disposable income, has made operating costs more expensive while demand has diminished for many markets. As a result, several restaurants have gone out of business, and even major chains have filed for bankruptcy. This week, another casual dining chain filed for bankruptcy.
On Tuesday, Abuelo’s, a 16-unit Mexican concept based in Lubbock, Texas, filed for Chapter 11 bankruptcy. The chain cited declining sales, rising costs, staffing challenges, and changing consumer preferences for the filing, listing debts and liabilities of between $10 million and $50 million. Lubbock-based Food Concepts International, owner of Abuelo’s, also filed for bankruptcy, requesting that the court combine it.
Abuelo’s was founded in 1989 in Amarillo, Texas. It specializes in made-from-scratch Mexican delicacies served in an upscale, Mexico-inspired setting. Many restaurants are themed after open-air courtyards filled with statues and greenery.
“The story of Abuelo’s begins in the summer of 1989, when entrepreneurs James Young, Chuck Anderson, and Dirk Rambo opened the first Abuelo’s Mexican restaurant in Amarillo, Texas. Our founders’ goal was simple. To open a restaurant serving delicious, made-from-scratch authentic Mexican food at everyday prices, as well as to create a place where guests of all ages could come together to experience the unique flavors, along with the art and culture of Mexico,” the website reads.
At its peak, Abuelo’s operated 40 locations. The chain started struggling in 2009, but the pandemic proved fateful. By the end of 2024, only 20 were remaining. According to Abuelo’s website, only 16 restaurants operate in seven states. According to Technomic, sales have fallen more than 15% last year.
While Chapter 11 has been filed, there has been no mention of any more restaurant closures. In March 2025, Mexican chain On the Border filed for Chapter 11 bankruptcy, closing over 12 restaurants across the country. According to data, it currently operates half as many restaurants as it did at the end of 2023. According to Fast Company, On The Border’s president, Chris Rockwood, explained that the “restructuring is the best path forward for On The Border. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.”
Tijuana Flats filed for Chapter 11 in April 2024. After shutting 40 locations, the brand switched to new ownership and made significant changes, including exciting new menu options. “Tijuana Flats is so back and better than ever,” the company wrote in a recent Instagram post. “We have been listening to all of the feedback and have been working on improving key pieces of our menu and bringing back fan favorites like our Mexican rice and Pico! We hope to see you soon to give us a try.”
