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orywireOTB Hospitality has filed for Chapter 7 liquidation after closing On The Border’s company-owned restaurants. Independently operated franchise markets in South Dakota, Florida, Nevada, California and South Korea are described as continuing outside the filing.
On The Border’s company-owned restaurants have closed after OTB Hospitality filed for Chapter 7 liquidation. The company says independently operated franchise locations in South Dakota, Florida, Nevada, California and South Korea are not part of the filing, so customers should check their nearest restaurant directly before going.
OTB Hospitality, the operating company of On The Border Mexican Grill & Cantina, said it voluntarily filed for liquidation under Chapter 7 of the U.S. Bankruptcy Code on June 19. The filing begins an orderly liquidation of assets under a Chapter 7 trustee, according to the company’s announcement.
The company said OTB Hospitality is a separate legal entity wholly owned by Pappas Restaurants. Pappas Restaurants itself is not part of the Chapter 7 filing, the announcement said.
The filing followed the closure of company-owned On The Border locations earlier in June. Nation’s Restaurant News reported that OTB Hospitality had said company-owned locations would close by the end of Friday, June 12.
The answer depends on whether the restaurant was company-owned or franchised.
Company-owned On The Border restaurants have closed. OTB Hospitality did not publish a complete location-by-location closure list in its Chapter 7 announcement, but it said the filing came after all company-owned locations had closed earlier in the month.
Franchise restaurants are different. The company said franchise locations in South Dakota, Florida, Nevada, California and South Korea operate independently and are not included in the filing.
During the latest check, On The Border’s official U.S. location pages still displayed restaurants in the franchise markets described as operating independently.
Hours, ordering options and local operations can change quickly during a bankruptcy wind-down. Customers should confirm with the specific restaurant before making a trip, especially if they are trying to use rewards, gift cards, catering orders or takeout services.
Chapter 7 is a liquidation process. In OTB Hospitality’s case, the company said the filing starts an orderly sale or handling of assets under a trustee rather than a reorganization plan.
That is different from the earlier Chapter 11 case. In March 2025, On The Border announced that OTB Holding LLC and related subsidiaries had filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Georgia while pursuing operational changes and a sale process.
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Pappas Restaurants later won an auction for On The Border in 2025. A Pappas announcement at the time said the brand had 60 company-owned restaurants across 18 states and 20 franchised locations in the U.S. and South Korea.
For customers, the safest step is to verify a specific restaurant before visiting. The company’s broad statement does not mean every On The Border sign has disappeared, but it does mean company-owned restaurants are closed and the remaining franchise markets are operating separately.
For workers, the Chapter 7 filing may shift unresolved business issues into the bankruptcy process. The public announcement did not provide detailed instructions on final pay, benefits, claims or employee communications.
For landlords, vendors and other creditors, the bankruptcy docket is the formal path to monitor. PacerMonitor listed the OTB Hospitality Chapter 7 case in the Southern District of Texas as case 4:26-bk-34358.
The company has not announced a reopening plan for closed company-owned restaurants. It also has not said whether a buyer could later acquire assets or revive parts of the brand.
The next meaningful updates would likely come from OTB Hospitality, the bankruptcy docket, Pappas Restaurants or the remaining franchise operators. This article should be updated if the company releases a final closure list, a claims process notice, new franchise guidance or any confirmed change to the remaining location pages.
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