Viva las Chi-Chi’s. In an era when nostalgia has never been more popular, the long-dormant Mexican restaurant chain is set for a comeback – nearly 20 years after it closed its final U.S. location.
News of that announcement sparked intrigue among former fans of Chi-Chi’s, which had 210 locations during its heyday in the mid-1990s.
“We are excited to see the immense outpour of support from fans new and old surrounding the news of Chi-Chi’s return,” said Michael McDermott, the son of the chain’s founder, in a statement sent to The Food Institute.
“While we are currently in the early stages of planning by securing funding, we can say the first two stores will be opened in Minnesota in 2025,” McDermott noted.
His goal is to “explore the original development path Chi-Chi’s took, through both company and franchised opportunities within the Midwest and East Coast.”
Coincidentally, another left-for-dead restaurant chain – Steak and Ale, which filed for Chapter 7 bankruptcy in 2008 – reopened a location recently in Burnsville, Minnesota, banking on the fact that many modern consumers seek value when dining out.
McDermott has struck a deal with Minnesota-based Hormel – which owns the Chi-Chi’s trademarks – to use the name on physical restaurant locations, reported The Minnesota Star Tribune. Though the last restaurant location closed in 2004, the brand lives on in the supermarket aisle with packaged seasonings, salsas, chips, and tortillas.
Chi-Chi’s restaurants thrived for much of the 1980s and ‘90s, thanks in no small part to their endless baskets of chips and fresh salsa, supersized margaritas, and sizable chimichangas.
McDermott hopes to revive the restaurant chain with an updated, full-service dining experience while sticking close to its original menu.
Restaurateur Marno McDermott (whose wife was nicknamed Chi Chi) and former Green Bay Packers football star Max McGee opened the first Chi-Chi’s in Richfield, Minnesota in 1975, according to the Star Tribune. After a series of ownership changes in the 1980s and ‘90s, the chain began to struggle, eventually filing for Chapter 11 bankruptcy in 2003. Shortly after, an outbreak of hepatitis A in the Pittsburgh area was linked to green onions served at a local Chi-Chi’s and resulted in four deaths.
In 2004, the Mexican chain closed its remaining 65 U.S. locations, which were acquired by Outback Steakhouse for $42.5 million, noted Restaurant Business. The brand lived on internationally as well as in grocery stores under Hormel, after it acquired the rights to produce Chi-Chi’s-branded products in 1987.
Recently, Michael McDermott founded Chi-Chi’s Restaurants LLC as he looks to revive the chain. His professional career includes time spent working with brands like Kona Grill and Rojo Mexican Grill.
He’s determined to honor his family’s legacy, by combining the classic Chi-Chi’s restaurant experience with modern influences.
“I still have fond memories,” Michael McDermott noted of dining at Chi-Chi’s during his youth. “We have seen the impact our restaurant has had on individuals and families across the country and believe there is a strong opportunity to bring the brand back in a way that resonates with today’s consumer – an updated dining experience with the same great taste and Mexican flavor.”
The Food Institute Podcast
Is it possible to balance a legacy brand and innovative ideas for a food company? Bibie Wu, chief communications and technical development officer with Del Monte, shares how her company respects its past while looking to the future, and how her dual roles in marketing and product development inform each other and improve the company.
