Citing inflationary pressures and changing customer behavior, On The Border Mexican Grill & Cantina is the latest restaurant chain to seek Chapter 11 bankruptcy protection.

In a March 5 petition in U.S. Bankruptcy Court for the Northern District of Georgia, the Tex-Mex chain’s ownership, OTB Holding LLC, said it intends to use the proceedings “to drive operational improvements and pursue a sale of substantially all of its assets.”

While the reorganization plays out, On The Border said its portfolio of 80 restaurants in the U.S. and internationally will remain open for business. The sites are a mix of 60 corporate-owned and 20 franchised units, according to the filing.

Within New Jersey, On The Border has restaurants in Princeton, Paramus, New Brunswick and Mount Laurel, according to its website.

Founded 43 years ago in Dallas, On The Border is known for its fajitas, margaritas and endless chips and salad. Similar to other brands that declared bankruptcy over the past year, such as TGI Fridays and Red Lobster, On The Border peaked in the 1990s and early 2000s when casual dining was especially popular.

Like its rivals, On The Border has also experienced declining traffic in recent years as consumers pull back spending at full-service eateries. It has also struggled to retain workers, as well as faced growing costs as minimum wages rose. In its bankruptcy petition, On The Border reported more than $19.6 million in debt and over 10,000 creditors.

‘The best path forward’

Chris Rockwood, the company’s president, said in a statement, “This restructuring is the best path forward for On The Border. It allows us to address several financial and operational challenges and emerge stronger and refocused on our growth.”

“The support we’ve received from our vendors and lenders will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests,” Rockwood said.

The Chapter 11 filing comes just weeks after On The Border shut 40 locations across 24 states that it deemed “financially burdensome” due to rent costs and/or financial performance. Locally, the wave of closures impacted Toms River, according to the company’s petition.

Of the $25 million the company spent on leases last year, $11.9 million went toward underperforming locations. On The Border has asked the court to allow the chain to break the leases for the non-operational restaurants that recently closed, according to the filing.

On The Border said it has secured $10 million in debtor-in-possession financing from one of its lenders to fund the Chapter 11 process. Additionally, the company anticipates entering into an asset purchase agreement with an affiliate of its lenders soon.