Another Mexican restaurant chain shares Chapter 11 bankruptcy plan

Sometimes when a company files Chapter 11 bankruptcy, it does so with a plan as to how it will emerge. It will often seek publicity for that plan so customers and vendors know that there's a path forward.

Now, any plans need to be approved by the bankruptcy court, and we've seen creditors back out of deals, vendors not willing to forgive debt, and landlords not willing to forgo back rent or lower the rent scuttle deals. 

In other cases, when a company files, it plays it low-key. Abuelo's, a Mexican restaurant chain with 16 locations across seven states, opted to stay quiet. That's because while the chain serves a lot of people, its filing actually got very limited media attention.

Now, as more customers seem to know about the plan, the company has decided to come forward and make some comments on what it expects will happen during its period under Chapter 11 bankruptcy protection. 

Abuelo's Chapter 11 bankruptcy filing overview

• Date Filed: September 2, 2025
• Court: U.S. Bankruptcy Court, Northern District of Texas
• Case Number: 4:25-bk-43339
• Judge: Edward L. Morris
• Assets & Liabilities: Between $10 million and $50 million
• Creditors: Between 200 and 999
• Parent Company: Food Concepts International, L.P. (FCI)

Source: Inforuptcy

Abuelo's shares its Chapter 11 bankruptcy plans

Abuelo's has both a blog and an FAQ on its website. Neither mentions the chain's Chapter 11 bankruptcy filing. 

In fact, if you just visit the website, you would assume that nothing has happened. The company does, of course, share some of its history.

The story of Abuelo’s begins in the summer of 1989, when entrepreneurs James Young, Chuck Anderson and Dirk Rambo opened the first Abuelo’s Mexican restaurant in Amarillo, Texas. Our founders’ goal was simple. To open a restaurant serving delicious, made-from-scratch authentic Mexican food at everyday prices, as well as to create a place where guests of all ages could come together to experience the unique flavors, along with the art and culture of Mexico. What came to life was a truly unique dining experience – authentic tastes of Mexico, with family-style dining in an elevated, yet comfortable setting.

The chain's owners did, however, recently share their plans to stay in business with the Lubbock Avalanche-Journal.

"We will continue normal operations and remain committed to maintaining stability for our employees, vendors and customers," the statement reads. "Most importantly, nothing changes for the guests who make us who we are. We’re excited to continue welcoming you, sharing great meals, and growing alongside the communities that have supported us. We are honored by your continued dedication and are looking forward to an even brighter future together."

More Restaurants:

• Cracker Barrel closing 14 company-owned restaurants amid backlash
• Beloved sandwich chain closes restaurants, bakeries
• Restaurant chain closed 50% of locations in Chapter 11 bankruptcy

In addition to Lubbock, Abuelo's also has locations in Abilene, Amarillo, the Dallas-Fort Worth region, and Midland and in several other states. 

"At the moment, operations are expected to continue throughout the company's locations," according to the statement.

The chain, according to court filings, hopes to not close any of its restaurants. All have remained open so far during the bankruptcy process.

Abuelo’s faces financial difficulties:

• Declining Sales: The chain experienced a 15.4% drop in sales between 2023 and 2024.
• Economic Pressures: Inflation, reduced consumer spending, labor shortages, and increased wage pressures negatively impacted operations.
• Extreme Weather: Heat waves in the summer of 2024 led to 63 store closure days and over $500,000 in lost revenue.
• Shift in Consumer Behavior: A 7.7% increase in out-of-store sales was offset by a decline in in-store traffic, affecting beverage and tip revenue

Source: Nation's Restaurant News

Abuelo's has been shrinking

Food Concepts International shared the following on its LinkedIn page.

Food Concepts International (FCI), based in Lubbock, Texas, owns and operates 40 Abuelo's Mexican restaurants in 15 states throughout the United States. FCI has been in business since 1975. Abuelo’s has received national accolades as the top-ranked Mexican food restaurant, one of America’s top chains, and for offering great meals for less than $20.

That's more than double the restaurant count the chain had at the time of its Chapter 11 bankruptcy filing.

"Abuelo’s blamed the bankruptcy on a big drop in sales, rising food and labor costs, continued staffing challenges, and changes in consumer preferences. The chain began seeing headwinds in 2023, stemming from inflation and a drop in guests’ willingness to spend money on dining out," FSR Magazine reported.

Mexican restaurant Chapter 11 bankruptcies:

• On the Border Mexican Grill & Cantina
• Filed for Chapter 11 bankruptcy in March 2025, closing over 12 locations.
• Cited inflation, rising interest costs, and low traffic demand as contributing factors.
• Acquired by Pappas Restaurants in May 2025
• Abuelo’s Mexican Restaurant
• Filed for Chapter 11 bankruptcy in September 2025.
• Operates 16 locations across seven states.
• Aims to keep all remaining locations open during restructuring.
• Tijuana Flats
• Filed for Chapter 11 bankruptcy in April 2024, closing 11 restaurants.
• Acquired by Flatheads, LLC the same day.
• Exited bankruptcy in January 2025 with plans to refresh its menu and expand its footprint.
• Las Salsas
• A longstanding taqueria in San Antonio, Texas, seemingly shut down earlier in 2025 after decades of service.
• The property was transferred to La Torre De Jalisco LLC in May 2025, with proposed renovations underway.

Related: Greek restaurant chain files for Chapter 7 bankruptcy, closes