Yet another Mexican chain is in trouble
Mexican chains have been under stress ever since the post-COVID pandemic years. Rising costs, fierce competition, and a decline in dine-out customers have created turmoil that many brands were unable to handle. Another well-known name has now joined the list as the latest casualty: Abuelo’s Mexican Restaurant.
Food Concepts International, the owner of Abuelo’s, filed for Chapter 11 bankruptcy in Texas. This came on September 2, with the company reporting between $10 million and $50 million in debt and assets. While all of the restaurants are still selling food, the filing is a sign that significant changes are on the horizon.
Abuelo’s has been gradually downsizing
Abuelo’s is no stranger to the restaurant industry. Established in 1989 in Amarillo, Texas, the chain initially promised authentic Mexican cuisine, prepared from scratch and offered at reasonable prices. For decades, it was touted as one of America’s greatest Mexican food chains.
But more recently, the story has changed. The chain’s site still touts that it has “restaurants in 9 states.” In reality, the chain now lists only 16 restaurants in 7 states—a far cry from the 40 it once showed on LinkedIn. It has done many of the closures under the radar, with little fanfare.
Here are some of the confirmed post-2022 closures:
- Beavercreek, Ohio: Closed January 2025 after 20 years.
- Bricktown, Oklahoma City: Shuttered in October 2024 after 30 years.
- Chandler, Arizona: Suddenly closed in July 2025, with staff learning the news on the same day.
- Chesapeake, Virginia: The Greenbrier Mall location closed, reported to online reports.
Not the only one filing for bankruptcy
Abuelo’s is not an isolated occurrence. Instead, it is part of a larger trend. A couple of Mexican restaurant chains have been experiencing financial troubles in 2024 and 2025:
- On the Border Mexican Grill & Cantina: Filed Chapter 11 in March 2025 and closed more than 70 units. The chain was later saved by Pappas Restaurants.
- Tijuana Flats: Filed Chapter 11 in April 2024. It closed 11 restaurants but survived in new hands.
- Rubio’s Coastal Grill: Filed Chapter 11 in June 2024, closing 48 California locations.
While new owners have rescued some of these chains, the closures have left loyal fans disappointed.
Why are Mexican restaurants closing?
The million-dollar question is: Why are so many Mexican restaurants failing? Experts have three reasons:
- Competition everywhere: Mexican food is very trendy in the U.S. That’s reflected in more restaurants vying for the same customer base.
- Rising costs: The price of avocados, dairy products, and meats has risen. Labour costs are also considerably higher, representing as much as 45% of sales at some restaurants.
- Changing behavior of customers: Customers today are expecting healthy choices, green food items, and technology-facilitated services like online ordering and delivery. Restaurants that do not change lose customers.
Even large chains like Chipotle have not been immune. In 2024, Chipotle reported that food, beverage, and packaging costs rose to 30.6% of sales from 29.7% in the prior year. That rise was largely due to higher ingredient costs and the attempt to keep portions large.
What will become of Abuelo’s?
For the moment, Abuelo’s patrons may continue to purchase their tacos, enchiladas, and margaritas. The Chapter 11 bankruptcy allows the company to restructure, but without closing its restaurants. It does not suggest an end—but it does suggest a fight for survival.
Whether Abuelo’s sells to a client like On the Border or closes even more restaurants will depend on how soon it can adapt to today’s demanding restaurant landscape. One thing is for sure: customers who have grown up with Abuelo’s are praying for the chain to stay alive.
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