On The Border Mexican Grill & Cantina, the Dallas-born Tex-Mex chain restaurant, has closed all of its company-owned locations, one year after being saved from bankruptcy by Pappas Restaurants Inc. The closure marks the end of a chain that was once a fixture of the Dallas-area casual dining scene and reflects broader pressures facing mid-tier restaurant brands in an increasingly competitive market.
A statement from OTB Hospitality confirmed the closure. “On The Border Mexican Grill & Cantina has made the difficult decision to move forward with a significant transition in its restaurant operations, which will include the closing of company-owned locations by end of day Friday, June 12, 2026,” the statement read. “This decision follows a thorough evaluation of the business and was not made lightly. We are currently evaluating the future of the On The Border brand and exploring a range of strategic options.”
According to NBC 5 Dallas-Fort Worth, independently operated franchises in South Dakota, Florida, Nevada, California, and South Korea will remain open. The closure affects only company-owned locations, though those represented the majority of the chain’s restaurants.
The closure comes after a turbulent period for the chain. Pappas Restaurants Inc., a Houston-based restaurant group known for its Pappas Bros. Steakhouse and Pappadeaux Seafood Kitchen brands, acquired On The Border out of bankruptcy in 2025, hoping to revitalize the struggling brand. The acquisition was seen as a potential lifeline for the chain, bringing in an experienced restaurant operator with a strong track record of managing multi-unit concepts.
However, the challenges facing On The Border proved more deep-seated than could be resolved in a single year. The chain, which was founded in the Dallas area in the late 1990s, had struggled with declining sales, outdated store formats, and increased competition from both fast-casual Mexican concepts and higher-end Tex-Mex restaurants. The rise of brands like Torchy’s Tacos, Velvet Taco, and Mi Cocina had squeezed the mid-tier casual dining segment where On The Border operated.
The closure reflects broader trends in the Dallas restaurant market. The Metroplex has seen significant growth in its dining scene, with an influx of national brands and local concepts expanding across the area. But the growth has been concentrated at the high end and the fast-casual level, leaving traditional casual dining chains like On The Border struggling to maintain their market position.
The Dallas-area restaurant market has also been affected by rising food costs, particularly for beef and other proteins essential to Tex-Mex cuisine. A family-owned barbecue spot in Cedar Hill, Mija Barbecue, recently announced it was closing after seven years, with owners citing rising beef prices as a factor in the decision, according to The Dallas Morning News reported by NBC DFW.
For Pappas Restaurants, the closure of On The Border represents a failed bet on the casual dining segment. The company, which has built its reputation on premium dining concepts, may now focus on its core brands rather than attempting to turn around distressed chains. The acquisition strategy of buying bankrupt restaurant brands and attempting to revitalize them has been tried by several private equity and restaurant groups in recent years, with mixed results.
The On The Border closure also highlights the challenges facing private equity-owned restaurant chains more broadly. The chain had previously been owned by private equity firms before its bankruptcy filing, and the transition to Pappas ownership did not provide enough time or capital to overcome the structural issues facing the brand. Industry analysts have noted that many private equity acquisitions of restaurant chains have struggled to deliver returns, as the cost of renovating stores, updating menus, and improving operations often exceeds initial projections.
The closure adds to a growing list of Dallas-area restaurant closures in 2026. The competitive landscape has been further complicated by the World Cup, which brought temporary visitor traffic to the area but did not provide sustained benefits for restaurants outside the immediate vicinity of AT&T Stadium in Arlington. Restaurants in the Dallas area have also had to contend with labor cost increases and changing consumer preferences, particularly among younger diners who tend to favor fast-casual and experiential dining over traditional sit-down chains.
For the Dallas commercial real estate market, the closure of On The Border locations could add to the inventory of vacant restaurant space, particularly in suburban retail centers where the chain operated. The real estate impact will depend on the locations of the closed restaurants and the ability of landlords to backfill the spaces with new tenants. Restaurant space in high-traffic areas of the Dallas-Fort Worth metroplex has generally been in demand, but locations in older or less prominent centers may face longer vacancy periods.
The fate of the On The Border brand remains uncertain. The statement from OTB Hospitality indicated that the company is exploring strategic options, which could include selling the brand, franchising it to new operators, or restructuring it for a potential return in a different format. For now, the independently operated franchise locations will continue to serve customers, preserving at least a portion of what was once a prominent Dallas restaurant brand.
