Matador Restaurant Group, a Del Taco franchisee operating 22 outlets, has declared bankruptcy amidst financial struggles.
The South Carolina, US-based company reported assets and liabilities each between $1m and $10m, alongside more than $2.7m in merchant cash advance (MCA) debts.
Matador's owner, Red Door Brands, manages other food chains including Little Caesars and Arby's. But they have not faced similar financial issues and will undergo separate bankruptcy proceedings, as reported in RestaurantBusinessOnline.
Each filing pointed to the Del Taco operations and the MCA financing as the root of their problems.
Court documents reveal that the Del Taco restaurants began struggling in late 2024 due to “company growth, an unexpected decline in sales and rising operational costs.”
The company resorted to MCA financing as a temporary solution to address cash flow problems, based on the advice of its brokers.
MCA providers in the case of Matador have recently intensified collection efforts, with several creditors asserting their interests through UCC-1 [Uniform Commercial Code] financing statements and one placing a lien on the company's accounts.
This action has complicated the brand’s operations, prompting the bankruptcy filing to halt collections and facilitate reorganisation.
In February 2025, Del Taco signed an agreement to open ten outlets in Indiana.
The following month, Del Taco abruptly closed almost all its restaurants in Colorado, US, without unveiling details of its decision. These closures, undertaken by franchisee Newport Ventures, are reportedly due to bankruptcy proceedings involving the franchisee.
In June 2025, the chain announced plans for a significant expansion into the Louisville, Kentucky area through a five-store development deal with new franchisee and local restaurant operator Karan Pandher, marking the chain’s first entry into the Louisville market.
