The On The Border Mexican Grill & Cantina in Escondido is expected to permanently close at the end of this month. According to a source, the closure stems from an upcoming lease renewal combined with complications arising from the On The Border brand's bankruptcy proceedings, which have allegedly left the local franchise owner unable to obtain authorization from the franchisor to continue operating under the On The Border name and recipes.
SanDiegoVille has reached out to the franchise owner and On The Border for comment and confirmation of the reported closure. This story will be updated if additional information becomes available.
The Escondido restaurant, founded in located at 600 E. Via Rancho Parkway, is one of only a handful of independently owned On The Border locations that remained open after OTB Hospitality shuttered all company-owned restaurants nationwide in mid-June. At the time, the San Diego County locations in Escondido and Mira Mesa were among just five franchise-operated restaurants still carrying the On The Border name in the United States, alongside locations in Nevada, South Dakota and Florida.
Following the corporate closures, the Escondido and Mira Mesa restaurants continued operating because they were independently owned franchises and were not included in OTB Hospitality's restructuring. In June, franchise owner Brett Almquest told Patch that both San Diego County restaurants would remain open and continue serving customers despite the company's financial troubles.
However, the future of the brand has become increasingly uncertain. On The Border first filed for Chapter 11 bankruptcy protection in March 2025 after struggling with declining customer traffic, rising labor costs, inflation and expensive leases. The chain had already closed nearly 80 underperforming restaurants before Houston-based Pappas Restaurants acquired the brand in May 2025 in an effort to revive the struggling Tex-Mex chain.
That turnaround proved short-lived. In June 2026, OTB Hospitality announced the closure of all 60 remaining company-owned restaurants, calling it a "significant transition" while evaluating the future of the brand. Days later, the franchisor filed for Chapter 7 liquidation, reporting more than $6 million in liabilities and acknowledging that substantial additional investment would be required to continue operating the business.
If the reported Escondido closure proceeds as expected, it could signal additional challenges for the remaining franchise system. The Escondido and Mira Mesa restaurants are owned by the same local franchise operator. The Mira Mesa location will remain open for the foreseeable future, but it could also be affected if the franchise owner is ultimately unable to continue operating under the On The Border brand. At this time, plans call for the Mira Mesa restaurant to remain operating as usual.
The reported loss of the Escondido restaurant would leave even fewer surviving On The Border locations nationwide, marking another chapter in the rapid decline of what was once one of America's largest Tex-Mex casual dining chains. At its peak, On The Border operated approximately 150 restaurants across the United States before years of declining sales, rising operating costs and bankruptcy dramatically reduced its footprint.
SanDiegoVille will update this story as additional information becomes available or if either the franchise owner or On The Border responds to requests for comment.
Originally published on August 5, 2026.
