On The Border Mexican Grill Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$1,425,500 - $5,058,000
Franchise Fee
$30,000
Total US Locations
120
Business Summary
On The Border Mexican Grill & Cantina offers franchises for full-service, casual dining restaurants that specialize in Mexican and Tex-Mex food, along with a full-service bar. These restaurants also provide catering, delivery, and other off-premises services, and can be free-standing or located in retail in-line spaces in metropolitan and suburban areas.
Corporate History
The On The Border Mexican Grill & Cantina concept began operating restaurants in 1994, with OTB Acquisition LLC, the current franchisor, formed in 2010. The company initially offered franchises between 1996 and 2010. After a pause, On The Border Mexican Grill & Cantina resumed offering and selling franchises in the United States starting September 1, 2020, while continuously operating its own restaurants and supporting existing franchisees during the interim period. As of late 2023, the brand had 120 restaurants operating in the United States, with 109 being company-owned and 11 franchised, plus an additional 14 franchised locations in South Korea.
Financial Overview
Investment Range
$1,425,500 - $5,058,000
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$30,000
Royalty %
4%
Marketing %
2%
Equipment Costs (Low)
$750,000
Equipment Costs (High)
$3,320,000
Working Capital
$300,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
On The Border Mexican Grill & Cantina's financial statements show net losses of approximately $5.7 million in 2023 and $10.5 million in 2022, following a net income of $7.5 million in 2021. The company's cash and cash equivalents also decreased significantly, from about $13.7 million in 2021 to $4.6 million in 2023. While the independent auditors issued an unqualified opinion, meaning the financial statements are presented fairly in all material respects, the consistent net losses and reduction in cash balances in the two most recent fiscal years are important financial considerations.
Financing Details
On The Border Mexican Grill & Cantina does not offer any direct or indirect financing to its franchisees. Additionally, it does not guarantee any notes, leases, or other obligations, nor does it receive payment or other consideration for placing financing.
Performance Metrics
Total US Locations
120
Franchised Units
11
Corporate Units
109
Avg Square Footage
4,700
Franchising Since
1996
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
On The Border Mexican Grill & Cantina has no litigation required to be disclosed in Item 3 of its Franchise Disclosure Document. This means there are no reportable legal proceedings or lawsuits involving the franchisor, its predecessors, affiliates, or management that meet disclosure requirements.
Bankruptcy History
On The Border Mexican Grill & Cantina has no bankruptcy information to disclose regarding the franchisor, its parent company, predecessors, affiliates, or general partners.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, On The Border Mexican Grill & Cantina franchisees must be in good standing, with no overdue amounts to the franchisor, its affiliates, or suppliers. They must also notify the franchisor of their intent to renew between 180 and 365 days before the initial term expires. Before renewal, franchisees are required to completely renovate and remodel their restaurant location to meet On The Border Mexican Grill & Cantina's current brand standards, at their own cost. They must also have a legal right to occupy the premises for the entire new renewal term, sign a general release of claims in favor of the franchisor, pay a renewal fee equal to half of the then-current initial franchise fee, and satisfy all current qualification and training requirements.
Training & Support Program
Franchisor Assistance
Before opening, On The Border Mexican Grill & Cantina helps franchisees with site selection guidelines and reviews proposed locations, though the franchisee is responsible for securing the site. The franchisor provides prototypical architectural plans and specifications for the restaurant build-out and reviews the franchisee's plans. On The Border Mexican Grill & Cantina also provides an initial training program for the General Manager, Kitchen Manager, Assistant Managers, and up to two additional trainees at no tuition cost, but the franchisee covers all related expenses like travel and lodging. For the first and second restaurants, On The Border Mexican Grill & Cantina provides an on-site grand opening team and supervision for 3 to 4 weeks, for which the franchisee pays a fee. The franchisor provides lists of required equipment, signage, fixtures, inventory, and approved suppliers. After opening, On The Border Mexican Grill & Cantina makes other training programs available at its discretion and may provide continuing advisory assistance on system standards, equipment, food products, and preparation. The franchisor maintains and revises its Operations Manual, which franchisees must follow, and reviews and approves all advertising materials created by franchisees. On The Border Mexican Grill & Cantina also requires participation in its marketing fund and local advertising efforts.
Initial Training Hours
320
Training Location
Dallas, TX
Ongoing Support
After opening, On The Border Mexican Grill & Cantina may, at its discretion, offer supplemental training programs, conventions, and meetings. The franchisor also provides continuing advisory assistance, including advice and written materials on system standards, new developments in restaurant equipment, food products, packaging, and preparation. On The Border Mexican Grill & Cantina provides franchisees with a list of necessary products and equipment, along with a list of approved suppliers. The franchisor also reviews and approves all advertising and promotional materials that franchisees propose to use and requires them to participate in the marketing fund and conduct local advertising. Additionally, On The Border Mexican Grill & Cantina may revise the contents of its Operations Manual, which franchisees must comply with.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
absentee-allowed
Territory Type
Limited
Territory Size Requirements
On The Border Mexican Grill & Cantina grants a protected area, which is the lesser of a 2.5-mile radius around the restaurant or a smaller radius determined by the franchisor based on factors like population density, demographics, and competitors. This protected area means On The Border Mexican Grill & Cantina will not establish another franchised or company-owned restaurant within those boundaries. However, this protection is limited and specifically excludes non-traditional locations (such as airports, stadiums, or food courts) and the right for the franchisor or third parties to sell products bearing the On The Border Mexican Grill & Cantina marks through other distribution channels like grocery stores or ghost kitchens.
Staffing Notes
On The Border Mexican Grill & Cantina requires franchisees to hire and designate an operator who is responsible for the direct, day-to-day oversight and management of the restaurant and must participate personally in the operation. Franchisees are also required to hire and maintain a minimum of three managers, or two managers and one shift supervisor. On The Border Mexican Grill & Cantina provides initial training for the General Manager, Kitchen Manager, Assistant Managers, and a Shift Supervisor. The franchisee is the sole employer of their staff, responsible for all hiring, training, scheduling, compensation, and disciplinary actions, and must conduct ongoing training programs to ensure employees understand and implement the On The Border Mexican Grill & Cantina system standards. While the franchisor recommends individual franchisees maintain on-premises supervision, it is not strictly required.