Pappas Restaurants Wins Bankruptcy Auction for On The Border

Houston-based Pappas Restaurants has won the bankruptcy court auction to acquire On The Border, a Dallas-founded Tex-Mex chain that filed for bankruptcy earlier this year due to inflation, changing customer behavior, and financial struggles. The acquisition, pending court approval, will merge two of Texas' largest restaurant groups, with Pappas planning to maintain On The Border's iconic branding while modernizing operations and enhancing the menu to honor the brand's heritage. On The Border, which had shrunk from over 150 locations at its peak to about 66, has been praised by Pappas leadership for its energy and bold flavors, and the acquisition will expand Pappas' Tex-Mex presence nationally. Founded in 1982 and previously owned by Brinker International and private equity firms, the chain had closed dozens of restaurants before bankruptcy due to steep revenue declines and liquidity issues. Pappas Restaurants, with a long family history in the hospitality business and multiple successful dining brands, sees this as a natural fit to bring Tex-Mex cuisine to more guests. The deal, with financial terms undisclosed but including a prior stalking horse bid of $15.9 million, is expected to close soon, marking a new chapter for the struggling chain under Texas-based ownership.