Last month, the full-service Mexican chain On the Border filed for bankruptcy, citing a combination of labor cost increases and waning demand. The company closed 40 locations, bringing the number of U.S. restaurants to 60, in addition to 20 outside the U.S. That’s less than half of the locations the chain operated before the pandemic.
But it also continues a pattern: Chains that at one point were owned by Chili’s owner Brinker International ultimately struggle and file for bankruptcy.
Brinker International has sold three concepts: On the Border in 2010, Corner Bakery in 2005 and Macaroni Grill in 2008. In the cases of On the Border and Macaroni Grill, the problems reflect the decline in casual dining and the impact of private equity. Corner Bakery, meanwhile, never lived up to its potential and then was sold to an owner that did not pay numerous bills.
Here’s a look at what’s happened to those chains in their post-Brinker life.
Macaroni Grill
We started this exercise because we ended up in a Macaroni Grill rabbit hole, something we wouldn’t necessarily recommend. (You can check out the video result of said rabbit hole dive here.)
Phil Romano, who also founded Fuddruckers, founded the Italian chain in Texas in 1988. Brinker bought the rights to the brand the next year. By 2007, it had 230 locations. But it was also struggling. The chain’s same-store sales had been in decline amid growing pressure on the full-service dining sector. Brinker quickly reached an agreement to sell the chain to the private-equity firm Golden Gate Capital for $131.5 million.
That then kicked off a remarkable chain of events that would drain its value by 95% and ultimately land two companies into bankruptcy.
The financial crash interrupted the Macaroni Grill sale process. Golden Gate ultimately bought an 80% share of the chain for $88 million. Five years later, in 2013, Golden Gate sold Macaroni Grill to Joe’s Crab Shack owner Ignite Restaurant Group for $55 million, and Ignite saw it as a major opportunity.
Except that it wasn’t. Ignite struggled to get Macaroni Grill going. In 2014, Macaroni Grill’s same-store sales fell 4.5%, Ignite reported a net loss of $53.5 million and the company announced a planned divestiture of the brand.
Mac Grill was sold the next year, for just $8 million (not the lowest price I’ve seen). And yet, by 2017, Macaroni Grill filed for bankruptcy, as did Ignite. Macaroni Grill was sold out of bankruptcy and then sold again in 2023 to the former executives who led the former Buffets Inc. concepts through multiple bankruptcy filings until they were all gone.
Macaroni Grill closed more than a quarter of its locations last year. It is down to just 21 restaurants.
Corner Bakery
Because it’s known as a full-service operator, it’s often forgotten that Brinker once owned Corner Bakery, which was founded by the Chicago-based group Lettuce Entertain You Enterprises and ultimately sold to Brinker International.
In 2005, however, Brinker opted to focus on casual dining and sold Corner Bakery, then a 92-unit concept, to CBC Restaurant Corp., the owner of Il Fornaio, for $70 million.
CBC seemingly did OK by Corner Bakery but by 2011 both the bakery/cafe chain and Il Fornaio were sold to the growing private-equity firm Roark Capital. At the time, Corner Bakery operated 119 locations. Roark grew that brand to 178 locations by the time the pandemic hit in 2020.
With the pandemic largely wiping out urban markets, Roark unloaded Corner Bakery to Pandya Restaurant Group, the same company that bought Boston Market. By 2023, down to just 100 locations, Corner Bakery filed for bankruptcy amid dozens of lawsuits over unpaid bills. The company was sold out of bankruptcy to the investor that bought its debt, SSCP Restaurant Group, which is working on a turnaround and has reopened some closed locations.
On the Border
The Mexican chain has had a comparatively easier time than the other two concepts. But the company’s same-store sales had been struggling persistently, with declining same-store sales in 2006, 2007, 2008 and 2009 before Brinker opted to sell the brand to Golden Gate for $180 million. The brand at the time had 162 locations.
It operated 157 five years later, in 2014, when Golden Gate sold the chain to another investment firm, Argonne Capital.
On the Border has struggled with weakening demand for full-service Mexican fare, as chains like Chipotle Mexican Grill took more of that business. Before this year’s bankruptcy filing, On the Border’s average unit volumes declined more than 17% and the company closed more than a quarter of its U.S. locations—before more restaurants were closed this year.
The company filed for bankruptcy and appears set to be sold to Pappas Restaurants.