Abuelo’s, a well-known Mexican restaurant chain, has recently filed for bankruptcy, closing 24 of its locations. The chain, once operating 40 restaurants across the United States, now has only 16 remaining.
Bankruptcy Filing Details
Abuelo’s filed its bankruptcy petition in the U.S. Bankruptcy Court for the Northern District of Texas. The company is owned by Food Concepts International, which also filed for bankruptcy earlier in September.
Reasons for Bankruptcy
The restaurant chain cites several reasons for this significant decline:
- Declining sales
- Rising operational costs
- Challenges in staffing
- Shifting consumer preferences
In its disclosure, Abuelo’s reported debts and liabilities ranging from $10 million to $50 million.
Impacts on Operations
Despite the bankruptcy, Abuelo’s stated it would continue normal operations. They emphasized their commitment to employees, vendors, and customers. The restaurant chain aims to provide the same quality and hospitality that customers expect.
Performance Challenges
Over the past few years, Abuelo’s has faced considerable challenges. Reports indicate a 5.9% drop in restaurant traffic in 2023, with this decline continuing into 2024.
Cost-Saving Measures
To combat decreasing sales, Abuelo’s has taken measures to cut costs. This includes closing underperforming locations and reducing overhead expenses.
Current Locations
Abuelo’s now operates in several states, including:
- Arizona
- Arkansas
- Florida
- Kansas
- Oklahoma
- South Carolina
- Texas
As Abuelo’s navigates this challenging period, the company aims to stabilize its operations and future prospects.
