Pappas Restaurants Acquires On The Border Out of Bankruptcy

In a strategic move that underscores its ambition to expand in the Tex-Mex space, Houston-based Pappas Restaurants has announced the acquisition of On The Border Mexican Grill & Cantina. The deal, revealed in a press release, comes as On The Border works through Chapter 11 bankruptcy proceedings initiated in March 2025.

On The Border, once boasting 150 locations, had shrunk to 60 company-owned and 20 franchised restaurants in the U.S. and South Korea by the time of its filing. The company cited macroeconomic headwinds, labor shortages, and creditor enforcement actions as key drivers behind the bankruptcy. In the lead-up to the acquisition, 40 underperforming locations were closed.

Pappas Restaurants, known for its family-owned brands such as Pappasito’s Cantina and Pappadeaux Seafood Kitchen, had already provided $10 million in debtor-in-possession financing through an affiliate. That move positioned Pappas as the stalking horse bidder, giving it an advantage during the court-supervised sale process.

In the press release, Pappas Restaurants CEO Mike Rizzo stated: “On The Border is a brand with deep heritage and loyal guests, and we see tremendous opportunity to invest in its future. Our shared Texas roots and passion for hospitality make this a natural fit.”

The acquisition reflects Pappas’ strategy to expand its national footprint by revitalizing a once-dominant Tex-Mex brand. According to the company, the plan is to improve On The Border’s menu, operations, and guest experience while preserving the brand’s heritage and popular offerings. Pappas will leverage its established operational model and focus on quality to modernize and strengthen the chain.

This acquisition brings together two Texas-based dining legacies—one seeking reinvention, the other poised to guide it. With Pappas now in charge, On The Border’s next chapter may yet include a return to relevance in a competitive national market.