On The Border’s Operator Announces Liquidation After June Closures

OTB Hospitality said it filed for Chapter 7 liquidation on June 19, 2026. The company said it had closed all company-owned On The Border Mexican Grill & Cantina restaurants earlier that month.

The company statement identifies OTB Hospitality as the operating company and a wholly owned subsidiary of Pappas Restaurants. It says the filing applies to that subsidiary, while Pappas remains outside the case.

Independent franchise locations in South Dakota, Florida, Nevada, California and South Korea continue operating, according to the statement. It describes liquidation under a Chapter 7 trustee, but provides neither a restaurant closure count nor exact closing dates. The filing and closure account here is the company’s; the original petition has not been independently reviewed.

Spokesperson Chris Pappas said continued investment in On The Border would divert resources and attention from the group’s core operations. That explanation describes management’s decision to stop supporting the operation. The release does not provide financial statements quantifying the investment already made or what further funding would have required.

The acquisition began with an auction#

Pappas announced that it had prevailed at auction on May 7, 2025. At that point, court approval remained outstanding and the buyer expected to close in the following weeks. The auction announcement was therefore an intermediate step in the purchase.

Pappas presented On The Border as a value-oriented complement to Pappasito’s Cantina, giving the group another Tex-Mex concept and access to more markets. The stated agenda included potential changes to the menu, operations and guest experience while preserving familiar offerings.

The announcement described 60 company-owned On The Border restaurants in 18 states and 20 franchised locations in the United States and South Korea. Those figures describe the business in May 2025. They cannot supply a June 2026 closure total without an intervening account of openings, closures and ownership changes.

The purchase rationale was broader geographic and customer reach for an established restaurant operator. That is useful context for the reversal: the acquisition was presented as an opportunity to improve an existing concept, with operational work still ahead.

A May welcome referred to the previous year#

An On The Border release dated May 1, 2026 supplies the completed-transaction detail. Despite its acquisition headline, the text explicitly says the purchase closed in May 2025. The public welcome came almost a year after that closing.

That release said On The Border had undergone a menu overhaul under Pappas ownership. It also described improved food quality, operations and guest experience. These were the company’s assessments, without accompanying measures of sales, restaurant earnings or cash requirements.

The May account placed On The Border alongside Pappadeaux Seafood Kitchen, Pappasito’s Cantina, Pappas Bros. Steakhouse, Pappas Bar-B-Q, Pappas Burger and Yiayia’s Greek Kitchen. It described a family-owned group using a vertically integrated operating model across its concepts.

The auction and closing announcements establish when Pappas moved from buyer to owner. The May update describes its menu work without measuring the financial result. June’s statement then identifies the operating company for liquidation, with independent franchise locations continuing outside the filing.