Another Mexican restaurant chain is pulling out of a major U.S. market, reversing an expansion that began just over a year ago.

The exit comes after the chain introduced a new restaurant format in the area, expanded that concept to additional locations, and positioned the market as an important part of its growth strategy.

Now, all of its remaining restaurants in the area have closed.

Founded in 2003 in Fort Worth, Texas, Fuzzy’s is a Mexican restaurant chain known for its tacos and margaritas. Dine Brands Global Inc. (DIN) acquired Fuzzy’s in late 2022, expanding into the fast-casual segment.

Fuzzy’s closes all Houston restaurants

Fuzzy’s has closed all of its remaining restaurants in the Houston area, ending the chain’s presence in the market.

The impacted locations include:

• Katy: 613 S. Mason Rd
• Kingwood: 4360 Kingwood Dr.
• Sugar Land: 1912 Wescott Ave. Ste. 250

The three restaurants were operated by Fuzzy’s franchisee Nazarian Global Enterprises (NGE Group). NGE did not issue a detailed public statement regarding the closures.

Fuzzy’s returns to Houston

The shutdown comes just over a year after Fuzzy’s introduced its new hospitality-driven model in Sugar Land.

NGE opened the first Houston restaurant under the new concept in June 2025. Called Fuzzy’s Tacos and Margs, the location introduced a full-service dining experience, technology enhancements, and a revamped menu. The concept was designed to blend elements of fast-casual and full-service dining.

Unlike traditional Fuzzy’s locations, where guests order at the counter and collect their food at a pickup window, the Sugar Land restaurant offered tableside service. Guests could take a seat while a server, known as a “Tacotender,” took their order.

The new format aimed to put hospitality at the center of the experience while simplifying the process for customers.

“We’re excited to pilot this new model that puts hospitality front and center while simplifying the overall experience for our guests,” Fuzzy’s President Patrick Kirk said in a company announcement at the time.

Kirk said the new model was intended to help the brand find a balance between fast-casual and full-service dining, with a streamlined menu, new taco offerings, and an expanded margarita lineup.

The concept then expanded to Kingwood in November 2025 and Katy in December of the same year.

Fuzzy’s previous closures

The Houston restaurants are not the only Fuzzy’s locations to close over the past year.

The chain had previously attempted to establish a presence in Houston, opening a Fuzzy’s Taco Shop location in the area in 2016 before eventually leaving.

Fuzzy’s ended June 28, 2026, with 97 restaurants, down significantly from the 113 locations it had at the same time the previous year, according to its second quarter of fiscal 2026 earnings report.

The chain’s net system sales also declined more than 5.3% during the quarter, while traffic decreased. Franchise revenue fell 0.7%, which Dine Brands attributed in part to the reduction in the number of restaurants.

However, same-store sales rose 4.6% during the quarter, helped by menu price increases.

Dine Brands CEO John Peyton said during the company’s latest earnings call that off-premise sales remained an important contributor to Fuzzy’s performance.

“Off-premise remains a meaningful and consistent contributor to the brand’s quarter-over-quarter improvement,” Peyton said.

He also said Dine Brands was encouraged by Fuzzy’s performance during the first half of the year and remained focused on building on that momentum.

The Houston closures come as Fuzzy’s continues to operate restaurants across the broader footprint, despite the decline in its total restaurant count over the past year.

Mexican restaurant chain closures

While the reason behind Fuzzy’s shutdowns remains unclear, the closures come as several Mexican restaurant chains have faced financial challenges, closures, or restructuring efforts.

Here’s some of my previous coverage of Mexican restaurant closures:

• Gringos Locos: Closed all of its Orlando-area restaurants in August 2026.
• On the Border Cantina Mexican Grill & Cantina: Closed all remaining locations in June 2026.
• Del Taco: Closed several restaurants and exited multiple markets following separate franchisee bankruptcies.
• Taco Giro: Closed seven of its restaurants following multiple ICE raids across various locations in December 2025.

Related: Popular Mexican restaurant adds new menu, new store concept