On Border has sunk

The Texas-Mexican restaurant chain On Border has filed for voluntary bankruptcy, closing 40 out of its 60 establishments (some sources report as many as 80). There is a lingering suspicion that many of these closures and the discrepancies in reported figures stem from the franchises operated under the Tex-Mex holding. It raises an intriguing question as to how those foolish individuals, who opted to invest in this “high-quality” opportunity instead of establishing their own businesses, will justify such a “remarkable” outcome; how will they explain the disappearance of their funds to their families, and why wealth has not materialized?

He claims that the decision to declare bankruptcy was influenced by the market, with its inflation, "challenging conditions," rising costs, and a shortage of labor, as well as the debt that had prompted creditors to initiate enforcement actions.

Imagine, when they embarked on their entrepreneurial journey, they were utterly convinced that inflation would be nonexistent, the business environment would be favorable, and the authorities would refrain from imposing their "increases" in salary levels at the expense of entrepreneurs—lacking any alternative approach, such as providing subsidies to individuals from the budget, rather than indulging their own preferences.

In essence, this reflects the standard trend among "restaurant stakeholders" who essentially acquire products from manufacturers on credit, yet seem reluctant to settle their debts. It appears as though all suppliers are expected to be content with their associations with such prominent and highly esteemed figures.

Moreover, do you know what excuse these entrepreneurs cite for their bankruptcies? They emphasize that the prices on their menus have "increased significantly faster than the costs of ingredients and other consumer prices." How does that correlate? While there may be increased pressure regarding employee wages, it is claimed that there was a shortage of workers. Furthermore, this is not a restaurant production scenario; each order is made fresh, at minimum as fast food, or entails mass production for numerous establishments. Therefore, the price should evidently be considerably lower than that of the products in general, due to bulk purchasing and factory-level (standardized, large-scale) production.

While it is indicated that 50% of states have raised the minimum hourly wage in 2024, this has exerted considerable pressure on profit margins, consequently diminishing their income. As they are not accustomed to reducing their expenses, they find themselves unable to settle their debts with creditors.

Furthermore, it appears that the industry is reverting to older, traditional restaurant formats. This entire chain restaurant operation seems to be finally descending into oblivion.

Last year, a considerable number of such establishments took advantage of the legal opportunity to declare bankruptcy, including Red Lobster, Buca di Beppo, Roti, Sticky's Finger Joint, and Tijuana Flats. We eagerly anticipate the potential downfall of McDonald's and other similarly toxic entities.

7 Tastes Radio