While many companies filing for Chapter 11 bankruptcy aim to make their recovery plans known early, Abuelo’s Mexican Restaurant took a different approach. The Texas-based chain quietly entered bankruptcy protection in early September 2025 with little fanfare or public explanation. Only recently has the company begun to address the situation publicly, reassuring customers and stakeholders that it plans to stay open through the restructuring.
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Abuelo’s operates 16 restaurants across seven states, a significant reduction from its former 40-location peak. Despite financial pressures and shifting consumer habits, the company says it has no current plans to close any more locations.
Filing
Abuelo’s filed for Chapter 11 on September 2, 2025, in the U.S. Bankruptcy Court for the Northern District of Texas. The case, overseen by Judge Edward L. Morris, shows the restaurant chain listing between $10 million and $50 million in assets and liabilities. It has between 200 and 999 creditors.
Parent company Food Concepts International, L.P. (FCI), based in Lubbock, Texas, is steering the company through the process. So far, Abuelo’s has kept all 16 remaining locations open and operating as usual.
Silence
Strangely, if you visit Abuelo’s website, there’s no mention of the bankruptcy at all. Their blog and FAQ pages are business-as-usual, focusing on promotions and menu items. But with more attention turning to the brand’s future, Abuelo’s leaders have begun addressing customer concerns.
In a statement to the Lubbock Avalanche-Journal, the company said, “We will continue normal operations and remain committed to maintaining stability for our employees, vendors and customers. Most importantly, nothing changes for the guests who make us who we are.”
The company added that it is “excited to continue welcoming you, sharing great meals, and growing alongside the communities that have supported us.”
Shrinkage
At its peak, Abuelo’s had 40 locations in 15 states, according to FCI’s own LinkedIn page. Now down to 16 restaurants, the chain has clearly been in contraction mode. Locations still in operation include cities such as Lubbock, Abilene, Amarillo, the Dallas-Fort Worth area, and Midland.
While no additional closures are expected at this time, the reduction over the past few years shows that Abuelo’s has been dealing with financial stress long before the Chapter 11 filing.
Struggles
Like many restaurants, Abuelo’s has faced a perfect storm of economic headwinds in recent years. From inflation to labor shortages, the brand struggled to maintain profitability. The company cited several core issues in court filings and public statements:
| Challenge | Details |
|---|---|
| Sales Drop | Revenue declined 15.4% from 2023 to 2024 |
| Labor Costs | Increased wages and staffing shortages added pressure |
| Inflation | Rising costs for ingredients and operations |
| Weather Impact | Heatwaves in summer 2024 caused 63 closure days and $500K in lost revenue |
| Consumer Shift | 7.7% increase in to-go orders didn’t offset drop in in-store dining and beverage revenue |
Combined, these factors pushed Abuelo’s to seek protection while it reorganizes and looks for a path to stability.
Competitors
Abuelo’s isn’t alone. Several other Mexican restaurant chains have faced similar financial issues recently:
| Restaurant | Chapter 11 Date | Notable Actions |
|---|---|---|
| On the Border | March 2025 | Closed 12+ locations, acquired by Pappas Restaurants in May |
| Tijuana Flats | April 2024 | Closed 11 restaurants, acquired same day, exited bankruptcy in Jan 2025 |
| Las Salsas | Early 2025 | Closed after decades in San Antonio, property transferred to new owner |
These cases show that Abuelo’s isn’t an outlier—it’s part of a broader trend of mid-size restaurant chains fighting for survival in a post-COVID, inflation-heavy economy where consumer habits are rapidly shifting.
Outlook
For now, Abuelo’s remains committed to its current locations and loyal customer base. While it’s not advertising its financial struggles on the front page, it has made clear to media outlets that it intends to emerge from Chapter 11 stronger and more focused.
Time will tell whether the strategy pays off. But unlike others that closed overnight or were quickly acquired, Abuelo’s seems determined to maintain its brand and independence through the process.
FAQs
When did Abuelo’s file for bankruptcy?
Abuelo’s filed for Chapter 11 on September 2, 2025.
Is Abuelo’s closing any restaurants?
No closures are planned. All 16 locations remain open.
Why did Abuelo’s go bankrupt?
Sales dropped, costs rose, and consumer behavior changed.
Who owns Abuelo’s?
Food Concepts International, L.P. (FCI) is the parent company.
Has Abuelo’s commented publicly?
Yes, it shared a positive statement with local media.
