Founded in 1975 in Minnesota by Marno McDermott and former Green Bay Packers player Max McGee, Chi-Chi’s once had more than 200 locations across the United States. The chain, known for its vibrant interiors and Tex-Mex menu, served dishes ranging from sizzling fajitas to decadent fried ice cream. However, Chi-Chi’s closed in 2004 after a devastating hepatitis A outbreak at a Pittsburgh-area restaurant, linked to green onions in its complimentary salsa. The outbreak sickened over 600 people, led to four deaths, and resulted in hundreds of lawsuits.

The outbreak became the largest hepatitis A incident in U.S. history, prompting nationwide food safety reforms. In the aftermath, Outback Steakhouse acquired Chi-Chi’s in a $40 million deal, shutting down the remaining restaurants and repurposing the locations for its other brands.

Michael McDermott, an industry veteran who previously founded Kona Grill and sold it in 2019, will now bring Chi-Chi’s back with a fresh concept. “We 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,” McDermott stated in a press release.

While the restaurant chain is making its return, Hormel will continue to produce Chi-Chi’s branded food products, including chips, salsas, and margaritas, which have been available in stores since the late 1980s.

The revival of Chi-Chi’s comes at a time when other nostalgic restaurant chains are experiencing mixed fortunes. Chili’s has seen strong earnings recently, while Red Lobster and TGI Fridays have faced financial struggles, with Red Lobster introducing a new happy hour and other menu changes to rejuvenate the brand. TGI Fridays, on the other hand, has quietly closed several locations in recent weeks.

As Chi-Chi’s looks to re-enter the market, it aims to blend nostalgia with modern dining trends to attract a new generation of customers while retaining its loyal fanbase.

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