Abuelo’s Shuts 24 Restaurants Amid Chapter 11 Restructuring, 16 Remain

Abuelo’s Mexican Restaurant has closed 24 locations amid a Chapter 11 restructuring, and the chain and its owner, Food Concepts International, have asked the U.S. Bankruptcy Court for the Northern District of Texas to combine their cases, court filings and reporting show. Most outlets reporting the shutdowns say 16 restaurants remain open across multiple states, while later local reporting in LubbockLights says three additional stores closed during the bankruptcy, leaving 13 operating units.

The chain that began in Amarillo in 1989 once grew to nearly 40 locations but has been shrinking for years; Technomic data cited by industry coverage shows systemwide sales fell more than 15% last year and that Abuelo’s finished last year with roughly 20 units. Abuelo’s is described in filings and press material as a family-style, casual-dining Mexican chain known for scratch-made enchiladas and fajitas and courtyard-style dining rooms with fountains and greenery.

Abuelo’s and Food Concepts International filed Chapter 11 in the Northern District of Texas after the parent company filed the month before, according to bankruptcy documents referenced in reporting. The filings list total debts and liabilities in a range between $10,000,000 and $50,000,000. Abuelo’s told the court it has more than 500 unsecured creditors and asked for extra time to negotiate a plan; LubbockLights reported the company asked for and later received more time to file a Chapter 11 reorganization plan in early December.

Operational snapshots vary by report. Cleveland and other outlets list remaining locations in Arizona, Arkansas, Florida, Kansas, Oklahoma, South Carolina, and Texas; national consumer coverage named closed restaurants in Plano, Texas and Tulsa, Oklahoma among affected markets. Abuelo’s issued a public statement saying, “This decision is a part of a strategic reconstructing process to strengthen our long-term financial position,” and added, “We will continue normal operations and remain committed to maintaining stability for our employees, vendors and customers. Through this time, our loyal customers can join us and expect the same quality and hospitality as we’ve always provided.”

Bankruptcy filings and monthly reports filed in court show operational nuance: LubbockLights cited a monthly bankruptcy financial report that recorded a $1,400,000 profit in November even as the company shrank. Industry observers and RestaurantBusinessOnline note that Abuelo’s troubles fit a broader pattern among casual-dining Mexican chains, pointing to rising food and labor costs, staffing shortages, changing consumer preferences, and pandemic fallout; RestaurantBusinessOnline highlighted recent bankruptcies or failures at On the Border, Rubio’s Coastal Grill, and Tijuana Flats for context.

Counts of open units and the list of states differ across reports, so the company’s court filings and the pending motion to consolidate cases in the Northern District of Texas will be key documents to watch as Abuelo’s finalizes a Chapter 11 plan and negotiates with more than 500 creditors.