Chi-Chi’s To Make A Comeback After 20 Years

Chi-Chi’s, the iconic Mexican restaurant chain that shut its doors two decades ago, is preparing for a revival. Hormel Foods, the owner of the Chi-Chi’s trademark, announced plans to bring back the brand under Michael McDermott, the son of the chain’s co-founder. The relaunch is slated for 2025, though details about locations, menu offerings, and restaurant designs remain under wraps.

Founded in Minnesota in 1975 by Marno McDermott and Green Bay Packers player Max McGee, Chi-Chi’s grew to over 200 locations, known for its vibrant atmosphere and expansive Tex-Mex menu. The brand’s popularity waned after a hepatitis A outbreak in 2003 at a Pittsburgh-area location. The incident, linked to contaminated green onions in its complimentary salsa, sickened over 650 people, caused four deaths, and led to hundreds of lawsuits.

The outbreak remains the largest hepatitis A incident in U.S. history, prompting sweeping food safety reforms. By 2004, Chi-Chi’s closed all its restaurants after being acquired by Outback Steakhouse in a $40 million deal. The locations were converted to other concepts, including Outback and Bonefish Grill.

Michael McDermott, a seasoned restaurateur known for founding Kona Grill, aims to blend Chi-Chi’s nostalgic appeal with modern dining expectations. “We believe there’s a strong opportunity to bring the brand back with an updated dining experience while preserving its great taste and Mexican flavor,” McDermott said in a statement.

Despite the restaurant closures, the Chi-Chi’s brand has endured on grocery shelves, with Hormel continuing to produce chips, salsas, and margaritas under the name since the late 1980s.

Chi-Chi’s revival comes amid mixed fortunes for other nostalgic chains. Chili’s has reported strong earnings, while Red Lobster and TGI Fridays have faced financial struggles, including bankruptcy filings and restaurant closures.

Experts believe nostalgia could be a key to Chi-Chi’s success. “Nostalgia has emerged as a powerful driver of customer visits,” said R.J. Hottovy, head of analytical research at Placer.ai. “Reintroducing beloved menu items or offering exclusive experiences resonates with consumers, making it a promising strategy for classic brands like Chi-Chi’s.”