Sample data — illustrative, not for citation
On The Border
mexican · OTB Holdings · est. 1982
On The Border is a casual-dining restaurant chain serving Tex-Mex food such as fajitas, enchiladas, and margaritas. A franchisee operates a full-service sit-down restaurant with a bar, serving families and groups for lunch and dinner.
On The Border net unit count declined -18.0% from 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Not enough disclosure
Distress
No verified FDD extraction to judge from. Any figures shown are labelled sample data or independent federal records.
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 56 | 50 | 45 |
| Opened | 1 | 1 | 1 |
| Transfers | 1 | 1 | 1 |
| Terminations | 3 | 3 | 2 |
| Non-renewals | 1 | 1 | 1 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 3 | 2 | 2 |
| Outlets at end | 50 | 45 | 41 |
| Net change | -6 | -5 | -4 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 5 SBA-backed loans to On The Border franchisees since 2010. Most are still open, so there is not yet a resolved cohort large enough to rate.
—
5 resolved · too thin to rate
—
avg. charged-off $ ÷ approved $
—
default rate × loss severity
$266,300
what recent franchisees borrowed
—
approval → charge-off, defaulted loans
—
distinct banks lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO ON THE BORDER BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
To open (Item 7)
$1.5M–$4M
all-in investment range
Franchise fee (Item 5)
$50K
upfront, one-time
Royalty (Item 6)
5%
of sales, ongoing
Your figure — this brand discloses no Item 19 earnings; validate with current & former owners.
Royalty you'd pay / yr
$50K
5% of sales, before profit
Over a 10-yr term
$500K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for On The Border with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 9 wage cases against operators of this system, recovering $2K in back wages for 6 workers, including 2 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
9
Back wages owed
$2K
Employees affected
6
Since 2020
2
2 of these cases involved child-labor violations, covering 3 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual On The Border franchisees — separately owned businesses operating under the brand name — not On The Border itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2024.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
On The Border closing all company-owned locations
news:KOKH · 1mo ago
On The Border closing company-owned restaurants, Arkansas locations impacted
news:5newsonline.com · 1mo ago
On The Border to close locations one year after being pulled from bankruptcy
news:NBC 5 Dallas-Fort Worth · 1mo ago
Dallas-founded On The Border closes all company-owned restaurants
news:CultureMap Dallas · 1mo ago
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing On The Border's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →