At the border, Mexican Grill & Cantina filed for bankruptcy protection this week after struggling to compete in a macroeconomic environment.
The Tex-Mex chain, owned by Argonne Capital Group, filed for Chapter 11 bankruptcy protection at the U.S. Bankruptcy Court in the Northern District of Georgia earlier this week after closing 40 locations.
According to the bankruptcy filing, the company operates 80 locations in the US and internationally.
Like its rivals, the company said in recent years, as traffic volumes have declined, struggled to keep workers, and struggled to face increased costs as the minimum wage rises, according to the Associated Press.
Fox Business has contacted the Argonne Capital Group for comments.
This is the latest in many major restaurant chains that have filed for protection in the bankruptcy court after struggling to manage the heavy debts they accumulated during the Covid-19 pandemic.
This isn't the last one, according to bankruptcy lawyer Daniel Giltzynski.
TGI Friday, Denny's, Ruby Tuesday, Rubio's coastal grill, Red Lobster, has filed for protection with Bankruptcy Court in recent years, and Hooters of America could be on the list.
The company is considering filing for bankruptcy as a way to restructure its restaurant chain and tackle debt, sources recently told Bloomberg.
The industry had hoped that consumer spending at restaurants would return to pre-pandemic levels once things returned to normal.
However, the Quick-Service sector began to face slower traffic over consecutive quarters as inflation consumers continued to eat at home more frequently.
According to bankruptcy lawyer Daniel Giltzynski, “the clients weren't fully reverted” due to changes in habits and spending ability.
Some companies that did not file for bankruptcy have positioned themselves better in their current environment and significantly reduced their footprint to bring transit customers back to the restaurant.
Red Robin announced this week that it is also considering closing 70 locations once the lease expires.
The company plans to sell three properties in the first quarter of fiscal year 2025.
The sale of these locations is expected to generate $5.8 million. We expect this to be partially used to repay the debt.
While the 2024 financial results were “far below” the company's original expectations, CEO GJ Hart said the company has made “significant improvements to the guest experience” in order to try to get traffic back to the restaurant.
It is trying to improve “restaurant footprint and overall system health” until the end of 2024, when fast food chain Wendy closed 140 inadequate locations.
