Chi-Chi’s is making a comeback 20 years after its last restaurant closed

The Return of Chi-Chi’s: A Nostalgic Bite with a Modern Twist

In a blast from the past, Chi-Chi’s, the beloved Mexican restaurant chain, is gearing up for a major comeback. Hormel Foods, the current trademark holder, has partnered with Michael McDermott—son of Chi-Chi’s cofounder, Marno McDermott—to relaunch the iconic brand in 2025. While the exact locations and menu details remain under wraps, this revival promises a fresh dining experience that still captures the signature Tex-Mex flavors that once made Chi-Chi’s a household name.

Chi-Chi’s first opened in 1975 in Minnesota, co-founded by McDermott and Green Bay Packers legend Max McGee. At its peak, it boasted over 200 locations and was known for its festive interiors and dishes like sizzling fajitas and indulgent fried ice cream. But the dream unraveled after a tragic hepatitis A outbreak in 2003 linked to tainted green onions at a Pittsburgh-area location, which led to hundreds of illnesses, several deaths, and the chain’s eventual closure. Outback Steakhouse swooped in, purchasing the remaining assets for $40 million and repurposing Chi-Chi’s spaces for its brands.

Fast-forward to today. Michael McDermott, with his proven track record in the restaurant world—including launching and later selling Kona Grill—plans to rebuild Chi-Chi’s legacy. His vision? To blend nostalgia with a modern dining experience that connects with contemporary tastes. “We’re taking the brand’s cherished history and reimagining it for today’s consumers,” McDermott explained, emphasizing a balance of familiarity and innovation.

Interestingly, the Chi-Chi’s name never truly disappeared—it lives on in grocery store aisles through chips, salsas, and margaritas under Hormel Foods. Now, the restaurant revival aligns with a broader trend: a wave of nostalgic brands reemerging in a challenging restaurant landscape. While chains like Chili’s thrive, others like Red Lobster and TGI Fridays grapple with financial woes. Industry experts believe that harnessing nostalgia through classic menu revivals or exclusive promotions is a winning formula to attract diners.

As Chi-Chi’s prepares for its grand return, it faces a marketplace filled with rising costs, labor shortages, and changing consumer expectations. But if the blend of memory and modernization clicks, Chi-Chi’s might once again become the go-to spot for family dinners and celebrations……….[read more]

Rising Dough

What role does nostalgia play in driving consumer behavior, and how can businesses balance past appeal with modern trends to attract loyal customers and new audiences?