In a dramatic restructuring effort following its Chapter 11 bankruptcy filing, a once-popular Major Mexican restaurant chain has permanently closed 77 U.S. locations as of June 2025, signaling turbulence in the casual dining sector. The closures impact multiple major states, including California, Texas, and Florida, leaving both loyal customers and employees scrambling. Here’s how the move impacts travelers, diners, and the broader food industry.
Behind the Closures: Bankruptcy and Strategic Downsizing
The chain, which operated over 300 locations pre-bankruptcy, cited rising labor costs, supply chain disruptions, and declining foot traffic as key factors in its collapse. Court filings reveal:
- 77 underperforming locations closed immediately, with 45% in shopping malls or tourist-heavy areas.
- Remaining restaurants will adopt a “slimmed-down” menu and digital ordering systems to cut costs.
- Gift cards and loyalty points will be honored only at surviving outlets through December 2025.
This downsizing mirrors struggles seen in brands like Rubio’s and TGI Fridays, which also shuttered dozens of locations post-pandemic. Analysts warn more closures could follow if consumer spending softens.
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Competitors Capitalize: New Players Fill the Void
As the chain retreats, rivals like Chipotle, Qdoba, and regional favorite Torchy’s Tacos are expanding into vacated markets. Chipotle recently announced 100 new U.S. locations in 2025, targeting suburban areas where the bankrupt chain once dominated.
Local vs. National Impact:
| Chain | 2025 U.S. Locations | Avg. Meal Price | Notable Perks |
|---|---|---|---|
| Bankrupt Chain | ~225 | 12–15 | Legacy loyalty program |
| Chipotle | 3,400+ | 8–11 | Free guac for rewards members |
| Torchy’s Tacos | 450 | 10–14 | Seasonal specials (e.g., Diablo Sauce) |
Industry Outlook: Casual Dining’s Uncertain Future
The bankruptcy underscores broader challenges:
- Labor costs rose 22% industry-wide since 2022.
- Delivery dependency slashes profit margins by 15–30%.
- Consumer preferences shift toward fast-casual brands with app-based convenience.
“This is a wake-up call,” says hospitality analyst Luis Gomez. “Legacy chains must innovate or face extinction.”
