Another long-standing Mexican restaurant chain has closed nearly all of its locations, ending years of family dinners, weekly happy hours and a loyal customer base. Due to an unexpected event, a more serious crisis has now hit the business: the sudden loss of many employees.
Mexican restaurants in the U.S. have faced rising labor and food costs fueled by inflation, higher interest rates on their bonds and more cautious consumer spending. This beloved Arizona chain was no exception.
Founded in 2008 by two brothers as a single restaurant in Tucson, the Mexican restaurant chain is known for authentic Sonoran and Tampico-style Mexican cuisine with an emphasis on seafood. It has also become a popular hangout thanks to its wide range of Michelada drinks and fun cocktails.
However, after 17 years of building a strong community in Arizona and Mexico, its future is now uncertain, not only because of the economic challenges facing the wider industry, but also because of much more serious legal issues.
Taco Giro has confirmed that seven of its restaurants will remain closed until further notice. The sudden closings follow several ICE raids at various locations, in which 46 kitchen workers, representing 10 percent of its staff, were arrested on Dec. 5, KGUN9 reported.
After the raids took place, Taco Giro closed all nine of its Arizona restaurants while keeping the Mexico location open, all of which are still listed on its website. The chain also used social media platforms, posting updates in both English and Spanish to notify customers of the shutdowns.
“Our restaurant will be temporarily closed while we take a short break to make some necessary adjustments so we can continue to offer the warm service and unique flavors you love,” Taco Giro wrote in a social media post. “We will be ready to welcome you back very soon with the same love, passion and flavors that always make you feel at home.”
Since then, Taco Giro has slowly reopened its locations, with three currently in operation. The chain also revealed it may close two other underperforming restaurants, which were already part of its plans before the raids.
Below are all current Taco Giro location statuses as of December 10th on Google Maps.
8320 N. Thornydale Rd., Tucson: Permanently closed
2097 E. Fry Blvd, Sierra Vista: Open
1402 S. Craycroft Rd., Tucson: Listed as open but not confirmed
13160 E. Colossal Cave Rd. #100, Vail: Permanently closed
Blvd. El Greco 70, Plaza Cumbres, 84066 Heroica Nogales, Sonora, Mexico: Open
Taco Giro closes most restaurants after ICE raids.Shutterstock” loading=”lazy” height=”540″ width=”960″ class=”yf-1gfnohs loader”/>
Taco Giro closes most restaurants after ICE raids.Shutterstock
According to ICE, the raids were part of a multi-year investigation into labor exploitation, tax violations and immigration violations. Sixteen warrants were executed at nine restaurants and seven related homes in Tucson, conducted with the assistance of local agencies in Cochise County and Sierra Vista.
“This multi-year investigation targeting TCOs allegedly involved in human smuggling, peonage-derived human trafficking resulted in the closure of the restaurants,” said Special Agent in Charge Ray Rede.
“This agency will not stand for it, and those who wish to continue such practices are on notice — there will be more law enforcement operations in Arizona.”
Cesar Rodriguez, Taco Giro’s chief operating officer, told the Tucson Sentinel that employees were required to provide a copy of their ID and complete all state and federal tax forms, including the I-9 Employment Verification Document, at the time of hire.
Rodriguez also disputed ICE’s allegations and added that he did not know the whereabouts of the arrested workers.
“The allegation is that they were paying the employees who were undocumented in cash under the table,” Rodriguez told the Tucson Sentinel. “There were a lot of false accusations that we were drug smugglers and child traffickers. It was just ridiculous.”
While Taco Giro’s closings are tied to legal issues, the restaurant industry is still a tough business.
The US Bureau of Labor Statistics reports that about 17 percent of new restaurants close within the first year. Long-term survival is even more difficult, with around half of restaurants closing within five years and only 34.6% surviving after 10 years, according to Oysterlink.
In addition, food service traffic fell 1% in the quarter ending June 2025, according to Circana.
“Small businesses can struggle to operate in tough economic conditions. Exit rates typically decline with firm age and cash flow, which can help companies weather recessions. Historically, the average life expectancy of small businesses has hovered around five years,” according to JPMorganChase analysts.
More closed restaurants:
However, there is hope that Taco Giro will make a full comeback.
Mexican restaurants, in particular, are growing in popularity in the US. IBISWorld projects that industry revenues will reach $96.4 billion by 2025, with an annual growth rate of 4.7% over the past five years.
“Mexican restaurants are beloved for their vibrant flavors, affordability and cultural authenticity. Many restaurants across the country—from New York to Arizona—are capitalizing on the demand for personalized, flavorful dishes,” said Restroworks Head of Marketing and Corporate Communications, Nikunj Kewalramani.
“The presence of a growing Hispanic and Mexican-American population has also fueled demand for more authentic and upscale Mexican restaurants, expanding the appeal beyond fast casual.”
Related: 65-year-old fast-food chain sues major operator after closings
This story was originally published by TheStreet on December 10, 2025, where it first appeared in the Restaurants section. Add TheStreet as a favorite source by clicking here.
