Casual restaurant chains were hit hard in 2024, with big names like Red Lobster and TGI Fridays succumbing to financial challenges.
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Almost 80% of restaurants reported rising food costs in 2024, mostly in the 1% to 5% range, according to Restaurant365’s 2025 State of the Restaurant Industry Report. Given restaurants’ tight margins, even modest food cost increases can put companies over the brink.Â
Related: Popular beverage brand files for Chapter 11 bankruptcy
Labor costs didn’t help the restaurant industry either. They were also an issue for 90% of restaurants, largely fueled by minimum wage hikes that impacted 25 states.Â
As a result, the restaurant industry experienced a wave of bankruptcies, including a popular Tex-Mex chain that’s now attempting to emerge stronger.
Tex-Mex chain gets a menu revival after filing for Chapter 11 bankruptcy in 2024.
Jeff Greenberg/Getty Images
Tex-Mex chain falters, enters bankruptcy
Tex-Mex chain Tijuana Flats wasn’t spared. In April 2024, Tijuana Flats filed for Chapter 11 bankruptcy in the hopes of restructuring its debt and revisiting its broad strategy in a highly saturated market for casual Tex-Mex food.
In addition to filing Chapter 11, Tijuana Flats shuttered 40 locations and sold the company to a new ownership group, Flatheads LLC. The chain has since reduced its debt load and restructured its operations.
Now, Tijuana Flats is raring to recapture its share of the Tex-Mex market, and it has big plans in store for 2025.
Tijuana Flats launches menu makeover
Despite a roughly 90-store footprint, Tijuana Flats doesn’t have the same name recognition and fan base as Chipotle Mexican Grill, which has roughly 3,600 locations nationwide and is barreling toward a goal of opening 7,000 locations by the end of the decade. Taco Bell also dominates much of the Tex-Mex market, with roughly 8,000 U.S. locations, according to data company ScrapeHero.
As part of its path forward, Tijuana Flats is putting customer feedback first and introducing menu changes that go beyond its otherwise run-of-the-mill selection.
Related: Another popular restaurant chain files for Chapter 11 bankruptcy
In an Instagram post, the chain announced it will be bringing back fan favorites such as its Mexican rice while improving ingredients like its blackened chicken and grilled steak.
Tijuana Flats is also partnering with a family-owned Mexican food company to introduce more authentic recipes. Following a successful limited-time beta launch, the chain will soon add street tacos to its menu. That’s in addition to a refreshing coconut limeade drink and cookie dough flautas for dessert.
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In addition to menu changes, guests can look forward to a broad refresh of Tijuana Flats storefronts. In a press release, the brand said it’s looking to focus on families and will be tailoring marketing promotions to offer its customers exceptional value.
Tijuana Flats also intends to branch out into new markets. It currently has stores in Florida, Alabama, North Carolina, Kentucky, and Tennessee.
Will Tijuana Flats be a successful restaurant revival?
At a time when the market is overloaded with Tex-Mex food and fast-casual restaurants are struggling, Tijuana Flats needs to up its game to survive. Its move toward more authentic Mexican street food could be a key differentiator, given that its core menu otherwise consists of run-of-the-mill staples like burritos, quesadillas, and other Americanized Mexican entrees.
Menu revamps are a fairly common strategy for struggling restaurant chains to employ. Following its emergence from bankruptcy, Red Lobster brought hush puppies, a fan favorite, back to its menus. It also added new items that include bacon-wrapped scallops and a lobster pappardelle.
Restaurants across a range of price points are also becoming keenly aware that menu refreshes may be the key to their profitability — and survival.
Related: Burger King Adds Yet Another Weird New Item to Its Menu
In 2024, Panera Bread overhauled its menu and brought nine new offerings into the fold. Maggiano’s Little Italy rolled out new pasta dishes and an upgraded cocktail menu. And Subway expanded its offerings with its Sidekicks snack lineup.
Market expansion is another popular tactic sluggish restaurant chains are trying. World of Beer, which emerged from Chapter 11 this past December, aims to open four to five stores per year over the next half-decade.
“Emerging from Chapter 11 is pivotal for our business,” said Jim Greco, chief executive officer of Tijuana Flats. “This process positions us to focus on what truly matters — delivering exceptional hospitality, value and flavors to our guests.”
The combination of an exciting new menu and renovated storefronts could be enough to propel Tijuana Flats on a successful path forward. And at a time when restaurant prices are broadly up 3.6% annually, one thing Tijuana Flats has going for it is its wallet-friendly price point.
Introducing a few signature items that differentiate Tijuana Flats from competing Tex-Mex chains could help the company achieve the post-bankruptcy revival it’s hoping for.
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