In a time when Taco Bell, Chipotle, Costa Vida, and other Mexican-inspired chain restaurants are sprinkled throughout most of the country, it’s refreshing to see a small-scale, regional chain succeed.
Unfortunately, some good things have to come to an end, which was the case for one such Tex-Mex chain.
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You might not have heard of Z’Tejas unless you live in Texas or Arizona, or have visited an area with one of its locations. Considering Z’Tejas only had 14 locations at its highest point, that’s pretty small-scale.
But even though it was small, it was mighty enough to last for 36 years before sadly coming to an end.
Just what made Z’Tejas so special?
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Z’Tejas described its cuisine, saying, “Tex-Mex isn’t just food—it’s a bold, flavor-packed tradition rooted in the blending of Mexican flavors with Texas ranch-style cooking.”
According to a piece in Nation’s Restaurant News, you could find cast-iron cornbread, street corn risotto, and fajitas on the menu, as well as “handcrafted cocktails, curated wines, and local beer.”
The menu isn’t available anymore due to the closure, but photos of the menu also show street tacos, catfish beignets, raw ahi chipotle citrus bites, and other flavorful-sounding foods.
In addition to lunch and dinner, Z’Tejas offered brunch as well as hosted private events.
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Z’Tejas started its roots in 1989 with its first location in Austin, Texas. The original owners were Larry Foles and Guy Villavaso, but ownership changed hands a few times over Z’Tejas’ lifespan.
With its made-from-scratch menu, its popularity grew, prompting the opening of 13 more locations at its highest point. The locations were primarily in Arizona and Texas, with additional locations in California, Utah, and as far northwest as Washington. That is, before the financial troubles hit…
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Unfortunately, Z’Tejas hit rocky times (not uncommon for smaller businesses). The small chain filed for Chapter 11 bankruptcy in 2015 and then again in 2017.
At the time of the second bankruptcy filing, four locations had already been shuttered. At the time of the first bankruptcy filing, Z’Tejas was reported to have $9.25 million in debt with only $300,000 in available cash.
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According to the bankruptcy filing in 2015, the manager and president of Z’Tejas was Steven Micheletti. In 2017 (after the second bankruptcy filing in two years), investors Randy Cohen and Michael Stone bought Z’Tejas out of bankruptcy.
The two whittled the locations down to a more simplistic amount of four, with Cohen taking sole ownership of the company in 2020.
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There were several challenges facing Z’Tejas over the years. Let’s take a look at a few of them.
High unemployment areas: Z’Tejas locations tended to be in areas with historically high unemployment rates. These areas experience reduced consumer spending due to financial insecurity, which trickles down to local businesses.
Less dining out: In the initial bankruptcy filing in 2015, one of the issues cited was that people were dining out less. Given that this was pre-COVID, I can only imagine how much worse things got with the pandemic and all of the woes the restaurant industry faced…
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Sales down: With people dining out less, it’s not surprising that Z’Tejas’ sales dropped nearly 3% in 2013, and then another 5% in 2014, prompting the first bankruptcy filing.
Increased costs: Additionally, the 2015 bankruptcy filing cited increasing costs of certain foods, as well as increased labor costs, as reasons for the filing.
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It’s not far-fetched to assume that the pandemic could have been the nail in Z’Tejas’ coffin. 110,000 eating and drinking establishments closed, and 2.5 million restaurant industry jobs were lost in 2020, so saying that 2020 was a rough year for the restaurant industry is putting it extremely lightly.
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Cohen, the sole owner of Z’Tejas, officially closed the last remaining location in Kyle, Texas, on June 30, 2025. Cohen told the Phoenix Business Journal that he sold Z’Tjas to focus on other business ventures.
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Z’Tejas issued the following statement: “After nearly three decades of serving communities across Texas and Arizona, it’s time to say goodbye to this chapter. With our lease coming to an end and the challenges of today’s market, we’ve made the very difficult decision to close (Z’Tejas) — our last remaining outpost.”
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It’s always sad to see smaller businesses close. After all, a small business is backed by someone’s dreams and aspirations, as well as lots of hard work and dedication.
The fact that Z’Tejas lasted 36 years – and through the pandemic – is impressive. Did you ever get a chance to dine at Z’Tejas? If so, what did you think? Share your experiences in the comments!
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