# Chi-Chi's
**Chi-Chi's** is an American chain of casual Mexican (Tex-Mex) restaurants founded in Minnesota in 1975 by restaurateur Marno McDermott and former [Green Bay Packers](https://www.edgepedia.org/green-bay-packers) player Max McGee. The chain grew to more than 200 locations nationwide at its peak before collapsing into bankruptcy in 2003, its reputation damaged by a hepatitis A outbreak traced to contaminated green onions. The last U.S. restaurant closed in 2004, but the brand survived as a [Hormel Foods](https://www.edgepedia.org/hormel-foods) grocery line, and in 2025 the founder's son Michael McDermott reopened the chain with a flagship restaurant in the [Minneapolis](https://www.edgepedia.org/minneapolis) suburb of St. Louis Park.[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) • [2](https://hospitalitytech.com/resurrected-restaurant-brand-celebrates-one-year)
| Key fact | Detail |
|---|---|
| Founded | 1975, in the Minneapolis area, by Marno McDermott and Max McGee[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) |
| Name | Taken from the nickname of Marno McDermott's wife, Chi Chi McDermott[3](https://www.fundinguniverse.com/company-histories/chi-chi-s-inc-history/) |
| Peak size | More than 200 locations nationwide in the mid-1980s and 1990s[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) |
| Bankruptcy | Chapter 11 filed October 8, 2003, in the U.S. Bankruptcy Court, District of Delaware[4](https://www.oakpointpartners.com/portfolio/chi-chis-inc) |
| Hepatitis A outbreak | 2003, at the Monaca, Pennsylvania restaurant; about 650 people sickened and four died, the largest hepatitis A outbreak in U.S. history[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) |
| Closure | Last U.S. restaurant closed in 2004[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) |
| Brand after closure | Hormel Foods owns the trademarks and sells Chi-Chi's branded chips and salsas in supermarkets[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) |
| Revival | First new location opened October 6, 2025, in St. Louis Park, Minnesota[2](https://hospitalitytech.com/resurrected-restaurant-brand-celebrates-one-year) |
## Founding and growth
McDermott, a [University of Minnesota](https://www.edgepedia.org/university-of-minnesota) graduate who had earlier created the fast-food concept Zapata Foods, believed there was demand in the Midwest for a full-service Mexican restaurant and recruited McGee, a former professional football player who owned the Left Guard Bar/[Restaurant](https://www.edgepedia.org/restaurant) in Minneapolis. The pair opened Chi-Chi's Mexican Restaurante in a section of that bar, naming it after the nickname of McDermott's wife.[3](https://www.fundinguniverse.com/company-histories/chi-chi-s-inc-history/) The venture was an immediate success: first-year sales surpassed the planned $400,000 and reached $2 million.[3](https://www.fundinguniverse.com/company-histories/chi-chi-s-inc-history/) The company took the brand public four years after founding, and the chain expanded rapidly, with more than 200 locations across the country at its peak in the mid-1980s and 1990s.[5](https://www.fsrmagazine.com/feature/one-year-in-michael-mcdermott-is-writing-chi-chis-next-chapter/?trk=public_post_comment-text) Kiplinger puts the count at 237 locations by 1986.[6](https://www.kiplinger.com/article/business/t062-c000-s001-whatever-happened-to-chi-chi-s-restaurants.html) The company's specialty was Sonoran-style Mexican food.[3](https://www.fundinguniverse.com/company-histories/chi-chi-s-inc-history/)
**Ownership churn.** The chain went through a series of ownership changes: Foodmaker Inc. acquired it in 1988, Family Restaurants Inc. bought it in 1994, and Chi-Chi's parent renamed itself Prandium Inc. in 1999; Prandium filed for Chapter 11 in 2002.[3](https://www.fundinguniverse.com/company-histories/chi-chi-s-inc-history/) By 2002 the location count had slipped to 144, and the chain filed for bankruptcy protection in 2003 amid increasing competition.[6](https://www.kiplinger.com/article/business/t062-c000-s001-whatever-happened-to-chi-chi-s-restaurants.html) • [1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536)
## The 2003 hepatitis A outbreak
About a month after the bankruptcy filing, cases of hepatitis A in the [Pittsburgh](https://www.edgepedia.org/pittsburgh) area were traced to the Chi-Chi's restaurant at the Beaver Valley Mall in Monaca, Pennsylvania. The outbreak, linked to green onions used as a garnish and in the restaurant's salsas, killed four people and sickened about 650 to 660; it is described as the largest hepatitis A outbreak in U.S. history and drew several hundred lawsuits.[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) • [5](https://www.fsrmagazine.com/feature/one-year-in-michael-mcdermott-is-writing-chi-chis-next-chapter/?trk=public_post_comment-text) • [7](https://www.restaurantbusinessonline.com/financing/chi-chis-restaurants-set-return-after-disappearing-20-years-ago?os=wtmbrGj5xBaH)
The [Centers for Disease Control and Prevention](https://www.edgepedia.org/centers-for-disease-control-and-prevention) investigated with the [Pennsylvania Department of Health](https://www.edgepedia.org/pennsylvania-department-of-health). By November 20, 2003, approximately 555 persons with hepatitis A had been identified, including at least 13 food service workers at the restaurant and 75 residents of six other states who had dined there. A case-control study implicated green onions as the source: mild salsa, which contained chopped fresh green onions, was eaten by 94% of case-patients versus 39% of controls. The green onions supplied to the restaurant were grown in Mexico, and the outbreak strain's genetic sequence was similar to that of hepatitis A cases linked to green onions in Tennessee, Georgia, and North Carolina in the same period.[8](https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5247a5.htm) Preparation practices amplified the exposure: onions from multiple boxes mingled in a common bucket for up to five days, and the mild salsa they went into had a three-day shelf life and was served free to patrons at seating.[8](https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5247a5.htm) A University of Hawaii food-safety publication reports that Chi-Chi's paid $50 million in total compensation for the outbreak.[9](https://www.ctahr.hawaii.edu/oc/freepubs/pdf/FST-32.pdf)
## Closure and the grocery brand
The last Chi-Chi's restaurant closed its doors in 2004.[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) [Outback Steakhouse](https://www.edgepedia.org/outback-steakhouse)'s parent bought the remaining 76 restaurants that year for $42.5 million to convert them into its own restaurants.[10](https://www.fsrmagazine.com/growth/casual-dining/chi-chis-prepares-for-reboot-with-roots-in-the-past/) The restaurant business ended, but the brand lived on in the supermarket aisle: Hormel Foods, based in Austin, Minnesota, owns the Chi-Chi's trademarks and produces Chi-Chi's-branded chips, salsas, tortillas, and seasonings, which remained available throughout the two decades without a restaurant.[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) • [11](https://www.startribune.com/chi-chis-mexican-restaurant-making-minnesota-comeback/601190603)
## Revival
In December 2024, Hormel Foods reached an agreement granting Michael McDermott, the founder's son, the right to use the Chi-Chi's name on physical restaurant locations expected to open in 2025.[12](https://www.prnewswire.com/news-releases/chi-chis-restaurants-set-for-comeback-after-two-decades-302321339.html) McDermott is an experienced operator who founded Kona Grill and Rojo Mexican Grill, and he formed Chi-Chi's Restaurants, Inc., incorporated in Minnesota on January 9, 2025, to run the revived chain.[1](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536) • [13](https://www.sec.gov/Archives/edgar/data/2056316/000166516025000304/offeringmemoformc.pdf) Snell & Wilmer partner Howard Sobelman secured the long-term licensing agreement covering the trademark and logo for the initial restaurant and future franchises; the company planned its first two locations in Minnesota with expansion across the Midwest and East Coast.[14](https://www.swlaw.com/client_news/snell-wilmer-secures-long-term-licensing-agreement-to-help-relaunch-chi-chis-restaurant-chain/)
**The flagship opening.** The first new Chi-Chi's opened on October 6, 2025, in St. Louis Park, Minnesota, in the former Rojo Mexican Grill space, marking the brand's return after about 20 years.[2](https://hospitalitytech.com/resurrected-restaurant-brand-celebrates-one-year) • [5](https://www.fsrmagazine.com/feature/one-year-in-michael-mcdermott-is-writing-chi-chis-next-chapter/?trk=public_post_comment-text) The company's financial filings describe plans to convert existing Rojo Mexican Grill locations into Chi-Chi's restaurants; it invested $600,000 into Rojo Maple Grove, LLC for that conversion.[15](https://www.sec.gov/Archives/edgar/data/2056316/000205631626000004/form_car.pdf) A company offering memorandum circulated on the StartEngine crowdfunding platform invited public investment in the revival.[13](https://www.sec.gov/Archives/edgar/data/2056316/000166516025000304/offeringmemoformc.pdf)
**First-year operations.** The revived restaurant balances nostalgia with new offerings. The menu keeps recognizable items such as [chimichangas](https://www.edgepedia.org/chimichanga) and [fried ice cream](https://www.edgepedia.org/fried-ice-cream) while adding modern dishes like birria and short rib tacos.[5](https://www.fsrmagazine.com/feature/one-year-in-michael-mcdermott-is-writing-chi-chis-next-chapter/?trk=public_post_comment-text) In August 2026 the company launched a lunch menu and returned three of the most-requested legacy items, the Twice Grilled BBQ Burrito, Seafood Nachos, and Margarita Chicken Tacos made with the brand's margarita marinade.[16](https://www.prnewswire.com/news-releases/chi-chis-revives-fan-favorites-introduces-lunch-menu-as-brand-comeback-gains-momentum-302853378.html) The company says it prepares nearly everything in-house, from salsas and dressings to flour tortillas, and has welcomed guests who traveled specifically to relive memories of the original restaurants.[16](https://www.prnewswire.com/news-releases/chi-chis-revives-fan-favorites-introduces-lunch-menu-as-brand-comeback-gains-momentum-302853378.html) On the trademark side, Hormel's new federal application for CHI-CHI'S covering restaurant services was registered on the principal register on September 1, 2026.[17](https://www.trademarkelite.com/trademark/trademark-detail/98849155/CHI-CHI-S) The company reports that it is evaluating additional future locations as interest in the brand grows.[16](https://www.prnewswire.com/news-releases/chi-chis-revives-fan-favorites-introduces-lunch-menu-as-brand-comeback-gains-momentum-302853378.html)
## Context: a nostalgia-brand revival
Chi-Chi's revival fits a wider pattern of defunct American restaurant brands being brought back, following similar attempts at Steak & Ale and The Ground Round.[7](https://www.restaurantbusinessonline.com/financing/chi-chis-restaurants-set-return-after-disappearing-20-years-ago?os=wtmbrGj5xBaH) Reporting on the reopening notes that it rides a wave of millennial nostalgia, and that reactions are mixed: some fans celebrate the return while others have moved on to independent Mexican restaurants, with observers suggesting the chain's success will hinge on food quality.[18](https://www.independent.co.uk/news/world/americas/chi-chis-restaurant-nostalgia-economy-brands-b2846920.html) • [19](https://www.delish.com/food-news/a69165561/chi-chis-return-fan-reactions/)
## References
1. [Chi-Chi's plans new restaurants more than 20 years after its bankruptcy, AP News](https://apnews.com/article/56cb8587fd2b90656e7fd2e698596536)
2. [Resurrected Restaurant Brand Celebrates One Year, Hospitality Technology](https://hospitalitytech.com/resurrected-restaurant-brand-celebrates-one-year)
3. [History of Chi-Chi's Inc., FundingUniverse](https://www.fundinguniverse.com/company-histories/chi-chi-s-inc-history/)
4. [Chi-Chi's, Inc. Remnant Assets, Oak Point Partners](https://www.oakpointpartners.com/portfolio/chi-chis-inc)
5. [One Year In, Michael McDermott is Writing Chi-Chi's Next Chapter, FSR Magazine](https://www.fsrmagazine.com/feature/one-year-in-michael-mcdermott-is-writing-chi-chis-next-chapter/?trk=public_post_comment-text)
6. [Whatever Happened to Chi-Chi's Restaurants?, Kiplinger](https://www.kiplinger.com/article/business/t062-c000-s001-whatever-happened-to-chi-chi-s-restaurants.html)
7. [Chi-Chi's restaurants set to return after disappearing 20 years ago, Restaurant Business](https://www.restaurantbusinessonline.com/financing/chi-chis-restaurants-set-return-after-disappearing-20-years-ago?os=wtmbrGj5xBaH)
8. [Hepatitis A Outbreak Associated with Green Onions at a Restaurant, Monaca, Pennsylvania, 2003, CDC MMWR](https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5247a5.htm)
9. [Food Safety Technology: Addressing Foodborne Threats, University of Hawaii CTAHR](https://www.ctahr.hawaii.edu/oc/freepubs/pdf/FST-32.pdf)
10. [Chi-Chi’s Prepares for Reboot with Roots in the Past - FSR magazine](https://www.fsrmagazine.com/growth/casual-dining/chi-chis-prepares-for-reboot-with-roots-in-the-past/)
11. [Chi-Chi's Mexican restaurant is staging a comeback after 20 years, Star Tribune](https://www.startribune.com/chi-chis-mexican-restaurant-making-minnesota-comeback/601190603)
12. [CHI-CHI'S Restaurants Set for Comeback After Two Decades, PR Newswire](https://www.prnewswire.com/news-releases/chi-chis-restaurants-set-for-comeback-after-two-decades-302321339.html)
13. [CHI-CHI'S RESTAURANTS, INC. offering memorandum, SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2056316/000166516025000304/offeringmemoformc.pdf)
14. [Snell & Wilmer Secures Long-Term Licensing Agreement to Help Relaunch Chi-Chi's Restaurant Chain](https://www.swlaw.com/client_news/snell-wilmer-secures-long-term-licensing-agreement-to-help-relaunch-chi-chis-restaurant-chain/)
15. [C-AR, Chi-Chi's Restaurants, Inc., April 21, 2026, SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2056316/000205631626000004/form_car.pdf)
16. [Chi-Chi's Revives Fan Favorites, Introduces Lunch Menu as Brand Comeback Gains Momentum, PR Newswire](https://www.prnewswire.com/news-releases/chi-chis-revives-fan-favorites-introduces-lunch-menu-as-brand-comeback-gains-momentum-302853378.html)
17. [CHI-CHI'S Trademark, USPTO Serial 98849155, TrademarkElite](https://www.trademarkelite.com/trademark/trademark-detail/98849155/CHI-CHI-S)
18. [Why the 90s is tasting pretty darned good in this economy, The Independent](https://www.independent.co.uk/news/world/americas/chi-chis-restaurant-nostalgia-economy-brands-b2846920.html)
19. [Chi Chi's Returns After 20 Years, But Do Customers Actually Want It?, Delish](https://www.delish.com/food-news/a69165561/chi-chis-return-fan-reactions/)
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*Topic: Encyclopedia › Arts and culture › Food, customs, and everyday culture › Food, cooking and hospitality › Restaurants, chefs, and culinary practice › Restaurant chains and fast food › Defunct restaurant chains and fast-food closures*
*Initially written Sep 17, 2026 · Reviewed: Oct 25, 2026 · Edited: Oct 15, 2026; Oct 25, 2026 · Last review: Oct 25, 2026*
*Copyright 2026 EdgeChat AI, a subsidiary of Biostate AI.*
License: Edgepedia Community License 1.0, https://www.edgepedia.org/edgepedia/license