Abuelo’s, a Mexican restaurant chain known for its longstanding presence in the U.S. for 36 years, has filed for bankruptcy, leading to the closure of 24 of its locations. Once boasting a total of 40 stores, the chain now operates just 16 locations across several states including Arizona, Texas, and Florida. The filing was made in the U.S. Bankruptcy Court located in the Northern District of Texas.
The restaurant chain, owned by Food Concepts International, cited a series of challenges that contributed to its financial decline. These include significant drops in sales, increased operational costs, staffing difficulties, and shifts in consumer preferences. The company reported debts and liabilities ranging from $10 million to $50 million.
Food Concepts International also filed for bankruptcy in early September, prompting the two companies to request a joint handling of their cases. In a statement, Abuelo’s emphasized that this decision is part of a “strategic restructuring process” aimed at improving its long-term financial stability. They reassured stakeholders, stating, “We will continue normal operations and remain committed to maintaining stability for our employees, vendors and customers.”
Despite these assurances, the chain has faced ongoing struggles. According to FSR Magazine, Abuelo’s has been dealing with declining traffic, which saw a drop of 5.9% in 2023 and continued into 2024. In response to these challenges, the company has already closed underperforming locations and reduced overhead costs.
Abuelo’s remains committed to its existing customers and aims to provide the same level of quality and hospitality that it has been known for over the years. The restaurant chain’s current footprint includes establishments in states such as Arkansas, Oklahoma, and South Carolina, among others.
As the company navigates this period of financial restructuring, it faces the task of adapting to changing market conditions while striving to maintain its customer base and operational viability.