Chi-Chi’s Restaurant Revival
Chi-Chi’s, the beloved Tex-Mex restaurant chain, is making a grand comeback after a nearly two-decade hiatus. After closing its doors in 2004 due to financial difficulties and the fallout from a devastating hepatitis A outbreak, Chi-Chi’s is poised to reclaim its place in the hearts of American diners. This remarkable revival, spearheaded by Michael McDermott, the son of the chain’s original founder, aims to blend nostalgia with modern dining trends, offering both familiar comfort foods and exciting new options for today’s discerning palate. The new Chi-Chi’s promises to revive the festive atmosphere and vibrant flavors that made it a household name during its heyday while incorporating contemporary tastes and innovations. With the first new Chi-Chi’s location set to open in St. Louis Park, Minnesota, in 2025, it’s a new chapter in the storied legacy of one of America’s most iconic restaurant brands.
Founded in 1975 by Marno McDermott and Max McGee, a former Green Bay Packers player, Chi-Chi’s was an instant success. The first restaurant, located in Richfield, Minnesota, was designed to offer diners a casual yet festive environment to enjoy Tex-Mex food and margaritas. At a time when Mexican food was still gaining popularity in the United States, Chi-Chi’s was one of the pioneers of Tex-Mex dining, offering a fun, family-friendly atmosphere paired with a menu of bold flavors and unique takes on traditional Mexican dishes. The restaurant chain quickly became a fixture in American dining culture, expanding rapidly across the country.
During its peak, Chi-Chi’s boasted over 200 locations across the United States. The chain’s menu featured a range of Tex-Mex staples like tacos, fajitas, and enchiladas, but what set Chi-Chi’s apart was its innovative approach to food. The famous chimichangas, served crispy and golden, and the seafood enchiladas, often praised for their fresh, flavorful fillings, became signature dishes that attracted loyal customers. In addition to its food offerings, Chi-Chi’s became synonymous with festive dining experiences. The lively atmosphere, complete with vibrant decor and colorful margaritas, made it a popular choice for everything from casual family dinners to special celebrations. For many, Chi-Chi’s was more than just a restaurant; it was a part of the American dining experience.
However, despite its early success, Chi-Chi’s began to face challenges in the early 2000s. The chain struggled to adapt to the rapidly changing dining landscape, with increasing competition from fast-casual Mexican chains and other restaurants offering similar Tex-Mex fare. In 2002, Chi-Chi’s filed for Chapter 11 bankruptcy protection as the company sought to reorganize and recover from mounting financial losses. The next few years proved to be even more difficult for the chain. In 2003, a hepatitis A outbreak at a Chi-Chi’s location in Beaver Valley Mall, Pennsylvania, further damaged the brand’s reputation. The outbreak, traced to contaminated green onions used in the restaurant’s dishes, resulted in over 600 reported cases of illness and four deaths. This became the largest hepatitis A outbreak in U.S. history, and the ensuing lawsuits and negative media coverage caused significant damage to Chi-Chi’s already struggling brand.
The hepatitis A incident, combined with the company’s ongoing financial difficulties, led to the eventual closure of all remaining Chi-Chi’s locations in 2004. The brand’s assets were acquired by Outback Steakhouse for $42.5 million, which chose to phase out the Chi-Chi’s name and convert its locations into Outback Steakhouse or other concepts. Despite the closure of its restaurants, the Chi-Chi’s brand continued to live on in a different form. In 2004, Hormel Foods acquired the rights to the Chi-Chi’s grocery product line, including salsas, tortilla chips, and margarita mixes, allowing the brand to continue to reach customers through retail sales. Over the years, these products have remained popular, even as the restaurant chain itself faded from public view.
The revival of Chi-Chi’s, spearheaded by Michael McDermott, is a story of resilience and nostalgia. In 2024, McDermott, who grew up with the Chi-Chi’s brand as a part of his family’s legacy, announced plans to revive the restaurant chain in partnership with Hormel Foods. His goal is to bring the Chi-Chi’s experience into the modern era, blending the classic Tex-Mex dishes and festive atmosphere with innovations that appeal to contemporary tastes. The first new Chi-Chi’s restaurant is set to open in St. Louis Park, Minnesota, in 2025, with future locations planned in other parts of the United States. The revival has been met with excitement and curiosity from both long-time fans of the brand and a new generation of diners eager to experience the nostalgia of Chi-Chi’s.
The new Chi-Chi’s will retain many of the elements that made the original restaurants so beloved while incorporating updates to the menu and restaurant design. The familiar Tex-Mex staples, including chimichangas, quesabirria tacos, seafood enchiladas, and the iconic fried ice cream, will be featured alongside new, contemporary options that reflect current food trends. For example, the restaurant will offer more plant-based options and dishes that cater to health-conscious consumers, such as grilled chicken fajitas and fresh, lighter takes on traditional Mexican fare. While the brand’s iconic margaritas will remain a key part of the experience, the new Chi-Chi’s will also offer an enhanced bar menu with a selection of craft cocktails and tequila offerings.
The design of the new Chi-Chi’s will blend the festive, vibrant atmosphere that the chain was known for with a more modern aesthetic. While the colorful decor and lively atmosphere will remain, the new restaurants will feature sleek, contemporary furnishings and an open layout that encourages socializing and a relaxed dining experience. The interior design will also incorporate elements that pay homage to the brand’s history, including vintage Chi-Chi’s memorabilia and nods to the original restaurant’s Mexican-inspired architecture. The goal is to create a space that feels both nostalgic and fresh, providing a welcoming environment for diners of all ages.
Michael McDermott has expressed his deep commitment to honoring his father’s legacy while modernizing the Chi-Chi’s brand for today’s restaurant landscape. “We’re not just reopening Chi-Chi’s for the sake of nostalgia,” he said. “We’re bringing it back because we believe in the brand, the food, and the experience. It’s about creating something that feels both familiar and new.” McDermott also emphasized that the new Chi-Chi’s would focus on providing excellent service and a high-quality dining experience, which he believes will be key to the brand’s long-term success.
As the Chi-Chi’s revival approaches, it’s clear that the restaurant chain is tapping into a larger trend in the dining industry: the return of nostalgic brands. In recent years, several once-popular restaurant chains have been revived, including Ruby Tuesday, Friendly’s, and even the beloved Boston Market. These revivals often combine elements of nostalgia with contemporary updates to appeal to both older customers who remember the brand from its heyday and younger diners who are looking for something new. Chi-Chi’s revival is a perfect example of this trend, as it seeks to combine its rich history with modern dining sensibilities to create a restaurant that feels relevant and exciting to today’s consumers.
The revival of Chi-Chi’s also highlights the growing demand for Tex-Mex cuisine in the United States. In recent years, Mexican and Tex-Mex dishes have become increasingly popular, with consumers seeking out more authentic, flavorful options. Chains like Chipotle, QDOBA, and Taco Bell have capitalized on this trend, offering a range of Tex-Mex dishes that appeal to a wide variety of tastes. Chi-Chi’s aims to capitalize on this demand by offering high-quality, made-from-scratch dishes that showcase the bold flavors of Tex-Mex cuisine.
In addition to the restaurant’s food offerings, Chi-Chi’s will also prioritize community engagement and social responsibility. The brand is committed to sourcing high-quality, sustainable ingredients and supporting local farmers and producers. Chi-Chi’s will also introduce initiatives focused on environmental sustainability, including reducing food waste and using eco-friendly packaging. These efforts align with broader industry trends toward more sustainable and ethical business practices, which are becoming increasingly important to consumers.
For the city of St. Louis Park, the reopening of Chi-Chi’s represents both an exciting opportunity and a chance to reinvigorate the local dining scene. The city, located just outside of Minneapolis, has a rich history and a strong sense of community, making it an ideal location for the first new Chi-Chi’s restaurant. Local residents have expressed excitement at the prospect of the iconic restaurant returning to their city, with many recalling fond memories of dining at the original Chi-Chi’s location. The revival of Chi-Chi’s is expected to attract both local diners and tourists, helping to boost the local economy and add to the city’s vibrant dining options.
While the revival of Chi-Chi’s is still in its early stages, the enthusiasm surrounding the project is undeniable. The new Chi-Chi’s restaurant promises to offer a fresh, exciting take on the beloved Tex-Mex chain while staying true to the brand’s roots. With its focus on quality food, exceptional service, and a festive atmosphere, Chi-Chi’s is poised to once again become a beloved destination for Tex-Mex enthusiasts and a symbol of the enduring appeal of classic American dining establishments.
As the restaurant industry continues to evolve, Chi-Chi’s serves as a reminder that even in the face of challenges, iconic brands can make a successful comeback. Whether it’s the nostalgia of the original Chi-Chi’s or the excitement of new menu offerings and a modern dining experience, the revival of Chi-Chi’s is a story of resilience, innovation, and a commitment to quality that will resonate with diners for years to come.
The revival of Chi-Chi’s is set to be one of the most exciting developments in the restaurant industry in 2025. As the brand prepares to open its doors once again, it brings with it the promise of a memorable dining experience filled with familiar favorites, fresh innovations, and a renewed focus on quality and service. Whether you’re a longtime fan of Chi-Chi’s or a newcomer eager to experience its festive atmosphere, the new Chi-Chi’s is sure to be a destination worth visiting.
In conclusion, Chi-Chi’s revival is an exciting chapter in the history of American dining. With its blend of nostalgia, innovation, and quality, the new Chi-Chi’s is poised to make a major impact on the restaurant industry and capture the hearts of diners across the country. The legacy of Chi-Chi’s is far from over, and its resurgence offers a glimpse into the future of iconic brands in the ever-changing dining landscape.