Fewer people eating out the past few years and higher costs explain why Abuelo’s – the Lubbock-based national restaurant chain – filed for Chapter 11 bankruptcy last month, according to updated bankruptcy records.
However, there’s some good news. The newest records show two company shareholders – Randall Andrews and David Sharbutt – will loan Abuelo’s $500,000 now and up to $1 million later in the bankruptcy process. We’ll explain that in a bit.
And the company – which once had close to 40 restaurants in 13 states – has cut back, now operating 16 restaurants in seven states.
LubbockLights.com reached out to attorneys for Abuelo’s companies last Wednesday via email. They have not yet responded.
Technically, three companies filed bankruptcy. They are Abuelo’s International, L.P. (Abuelo’s), Food Concepts International, L.P. (Food Concepts) and Food Concepts International Holdings, Inc. (FCI Holdings). FCI Holdings is the parent company.
Summary of assets and liabilities
Cash, assets, real property
Abuelo’s $12.3 million
Food Concepts $157,322
FCI Holdings $18.8 million
$31.25 million total assets
Total liabilities
Abuelo’s $11.97 million
Food Concepts $10.65 million
FCI Holdings $8.1 million
$30.65 million
Secured claims
Abuelo’s $8.1 million
Food Concepts $8.1 million
FCI Holdings (Schedule D left blank)
$16.2 million claims secured by property
Unsecured claims
Abuelo’s $3.8 million
Food Concepts $2.5 million
FCI Holdings $8.1 million
$14.4 million unsecured (priority & non-priority combined)
Inventory as of the date of filing bankruptcy $643,536
Source: Bankruptcy schedules A through H of all three companies combined including Form 206Sum.
An analysis of the schedules filed by the three Abuelos companies showed them treading water in terms of assets and debts. Abuelo’s (all three together) had more than $31 million in assets and nearly $31 million debts.
For 2024 Abuelo’s reported less than $87.6 million in gross revenue or about $7.3 million per month (based on the filing for FCI Holding). For 2025 year-to-date, it was $5.77 million per month.
Some of the contingent debts were listed as unknown in the bankruptcy schedules. Roughly two weeks into the case, Abuelo’s filed a proposed 18-week budget in court covering from the first week of September through the first week of January 2026.
Highlights of 18-week budget – proposed in court
Gross revenue (operating receipts)
$25.47 million
Expenses
Payroll / labor
$7.33 million
Food & beverage
$7.33 million
Rent / lease
$1.42 million
Utilities
$1.37 million
Supplies/IT
$1.67 million
Insurance
$0.323 million
Miscellaneous
$0.309 million
Non-operating disbursements
$2.17 million
Net cash from operations
$1.37 million
Ending cash in September
$1.73 million
Ending cash in January 2026
$1.22 million
Net cash flow (loss)
($800,000)
Numbers here are rounded. Non-operating costs include restructuring, interest on loans, paying down balances for critical vendors and the like.
Click here to read Abuelo’s 18-week proposed budget.
When trouble began
Abuelo’s “began seeing headwinds in 2023 as inflation persisted and consumer willingness to spend on discretionary items, such as dining out, remained low,” said Robert Lin, president of FCI Holdings.
In 2023, Abuelo’s suffered a 5.9 percent drop in traffic from 2022, along with “increased wage pressure.”
“Unfortunately, consumer weakness, labor shortages, and rising labor and food costs continued through 2024,” Lin claimed in court records.
He also mentioned severe weather in parts of the country caused $550,000 or more of lost revenue in 2025.
Lin claimed takeout sales were up 7.7 percent last year as people preferred to eat at home. But that cut into drink sales.
The economic factors Lin mentioned are on top of nearly $6 million in debt payments by Abuelo’s and another $1.7 million by Food Concepts in the 90 days prior to bankruptcy – which is more than $2.5 million per month on average.
Even before the bankruptcy, Abuelo’s had already reduced corporate overhead and closed certain “low performing” locations, he said.
The bankruptcy schedules said Abuelos recently closed another seven restaurants in addition to earlier closings. The recent ones were Texas locations in Austin, Katy, League City and Plano along with locations in Chandler, Arizona; Kissimmee, Florida; and Tulsa, Oklahoma. (See more complete list of open and closed locations below.)
Two lenders come forward
Andrews and Sharbutt offered financing to get Abuelos through bankruptcy. They were described as current shareholders and members of FCI Holding’s board of directors, court records showed.
They agreed to do something called “debtor in possession financing.” Their loan gets the priority on payback. They offered $500,000 at first and another $1 million if needed for a total of $1.5 million.
In the first few days of the case, judge Edward L. Morris agreed to this idea, saying in his ruling, “Without obtaining financing on a post-petition basis, the debtors will not be able to pay their operating expenses.”
The loan itself carries no interest, but the default rate is 12 percent. The loan terminates on next August 30, or after certain things (like the approval of a restructuring plan) are completed in the bankruptcy. The biggest creditors are a bank, a commercial leasing company and three food vendors.
Lin asked the bankruptcy judge to authorize the restaurant to pay ongoing salary, food vendors, utilities and other similar expenses and Morris granted the request.
Struggle vs. hope
Lin expressed optimism the company can survive.
“The ongoing operations are anticipated to continue to generate revenues sufficient to not only support current operating expenses, but an exit from this reorganization proceeding,” Lin wrote.
82nd Street and Quaker Avenue. Credit: Staff photo.
Abuelo’s, Food Concepts and FCI Holding have the “exclusive” right to file a reorganization plan in the first 120 days of the case. A judge can extend the deadline to 18 months. Once the exclusivity period expires, creditors can file competing plans.
Lin also listed payroll details as they were in early September.
“All told, approximately 1,014 employees are paid hourly, … and approximately 88 employees are salaried,” he wrote.
He listed the biweekly payroll for Abuelo’s as $658,000, plus more than $11,000 for deposit into 401k plans. Add to that federal employment taxes of more than $226,000.
Additionally, the biweekly payroll at Food Concepts was nearly $69,000 plus more than $10,000 for 401k and employment taxes of more than $22,000
The history
The Abuelo’s website said its first location was Amarillo. No later than 2004, the parent company was operating its headquarters in Lubbock, according to kcbd.com.
“The Debtors own and operate a chain of full-service, casual dining Mexican restaurants serving made-from-scratch Mexican food. The Debtors’ first restaurant opened in 1989, and they now operate a total of 16 restaurants located in 9 states throughout the nation,” Lin’s declaration said.
However, LubbockLights.com could only verify seven states currently from the bankruptcy case.
It used to be nine states, based on screen captures from the Abuelo’s website between 2019 and 2023 from web.archive.org. A 2016 press release said Abuelo’s was opening a 40th location. We found 37 of them and cross referenced those with the current Abuelo’s website to show which locations are still open.
Arizona
Arkansas
Florida
Kissimmee
Lakeland (open)
Indiana
Kansas
Wichita Ridge Road (open)
Wichita Waterfront (open)
Kentucky
Missouri
Ohio
Columbus
Warrensville Heights
Oklahoma
OKC-Bricktown
OKC-North
Tulsa East
Tulsa Nickel Creek (open)
South Carolina
Tennessee
Bartlett
Chattanooga
Knoxville
Texas
Abilene (open)
Amarillo (open)
Arlington (open)
Austin
College Station
Fort Worth (open)
Hurst (open)
Katy
League City
Lubbock (open)
Midland (open)
Plano
The Colony (open)
Tyler (open)
Virginia
Echoes of Don Pablo
Abuelo’s claims on its website to be “the #1 Mexican Restaurant in America.”
That might sound reminiscent of Don Pablo’s, which made a similar claim in the past.
According to thetakeout.com, “Don Pablo’s first hit the scene in 1985 … Its inaugural restaurant opened in Lubbock, Texas, offering a range of classic Tex-Mex cuisine …”
“The restaurant offered all the typical Tex-Mex staples. Menus were packed with the … tacos, fajitas, nachos, salads and Don Pablo’s signature margaritas, made with fresh lime juice, while its flour tortillas were made fresh throughout the day at its in-house tortilla stand, all served cafeteria-style,” thetakeout.com reported.
Nation’s Restaurant News (NRN.com) quoted bankruptcy filings from 2016 and reported, “The chain was founded in 1985 in Lubbock, Tex. At one point, the company said in a filing, it had 120 locations around the country and was one of the largest full-service Mexican chains in the country.”
“The casual dining industry is highly competitive and faces increased competition from fast-casual dining options. … Despite the relatively steady economy in most of the United States, the casual dining environment remains depressed,” NRN.com quoted court records as saying.
Lin described Abuelo’s “casual dining” as under pressure from inflation, lower consumer willingness to eat out and a combination of labor shortages with increased wages and food costs.
Unlike Abuelo’s with one owner, Don Pablo’s had five owners during its run starting with DF&R Restaurants, Inc. and ending with Food Management Partners, which closed the last location in 2019.
The timing of Don Pablo’s closure in Lubbock is not documented precisely online, but the property, in the 4600 block of 50th Street, sold to a bank in late 2007.
Related
Related posts