Del Taco franchise goes bankrupt sparking closure fears
And it adds to a string of troubles for Del Taco itself. The brand — which competes with Taco Bell and offers $3 to $15 meals like steak tacos, guacamole and chicken burritos, and breakfast wraps — has struggled with falling sales. '[Expletive], I like the fish tacos,' one Del Taco fan said on Reddit.
In court filings, Matador blamed its filing on a web of weaker-than-expected sales and high-interest cash advances. The company's financial spiral began in late 2024, when it was hit by a triple threat: declining revenue, surging operational costs, and rapid expansion. To stay afloat, Matador took out over $2.7 million in merchant cash advances (MCAs) from nine different lenders.
But the short-term loans came with steep fees and aggressive repayment terms. Lenders began siphoning money directly from the company's accounts, choking cash flow and making daily operations impossible. In its bankruptcy filing, Matador declared between $1 million and $10 million in both assets and liabilities. Matador is owned by Red Door Brands, which also operates Little Caesars, Arby's, and McAlister's Deli locations in the Southeast. But only the Del Taco business ran into trouble.
So far, the company hasn't announced any closures related to the filing. Matador operates most of the Del Taco restaurants in Alabama, though a recently opened location in Huntsville is not part of the brand. Del Taco national sales aren't faring much better. The chain, which has about 600 restaurants nationwide, has logged five straight quarters of same-store sales declines.
Parent company Jack in the Box — which acquired the brand for $585 million in 2022 — is now actively seeking a buyer. Matador is the second major Del Taco franchisee to declare bankruptcy in the past year. In February, Newport Ventures, which operated 18 Colorado restaurants, shuttered all of its locations after three months in court. The parent company started reopening 17 of those locations in June.
Del Taco and Red Door Brands didn't immediately respond to DailyMail.com's requests for comment. They're not alone in the restaurant industry fallout. Several other iconic fast food and fast casual eateries have recently plummeted into bankruptcy court.
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