Orlando, Florida – Tijuana Flats, a popular Florida-based Tex-Mex restaurant chain, has made the difficult decision to declare bankruptcy, close 11 of its locations, and transition ownership to a new group, Flatheads LLC. The fast-casual chain filed for Chapter 11 bankruptcy protection, citing assets ranging from $1 million to $10 million and liabilities between $10 million and $50 million, with nearly $19 million in secured debt.
The company’s strategic review started in November, leading to a detailed analysis of each location’s financial performance, occupancy costs, and market conditions. Despite the closures and restructuring, Tijuana Flats reassured its franchisees of continued support and emphasized that the remaining locations will operate as usual.
Joe Christina, appointed as CEO in 2022, expressed optimism about the transition, stating that the new ownership group aims to reinvest in the brand’s core values that initially attracted a loyal customer base to Tijuana Flats. Christina affirmed his commitment to leading the company through this period of change.
The challenges faced by Tijuana Flats were attributed to various factors, including a complex interplay of adverse events, increased operational costs post-pandemic, and adjustments in consumer spending habits. Efforts to expand the menu, while well-intentioned, inadvertently led to higher costs and diminished customer satisfaction, contributing to a decline in sales.
With system sales reaching nearly $170 million last year, Tijuana Flats experienced a modest 3.8% growth in unit volumes, although system sales growth over the past five years averaged only 0.1%. These figures contrast with the fast-casual Mexican sector’s average growth rate of 10.5% over the same period, highlighting the need for strategic adjustments within the company.
The specifics of the new ownership group, Flatheads LLC, remain undisclosed, with the company’s address listed in court documents as an office in Encino, California. Moving forward, Tijuana Flats will navigate the complexities of bankruptcy proceedings while striving to revitalize its operations under new ownership.