The Chi-Chi's Controversy You Totally Forgot About

Since the closing of all of its brick and mortar locations in the United States, many people have wondered what happened to Chi-Chi's. The restaurant opened its doors in 1975 in Minneapolis. Its founders, former wide receiver for the Green Bay Packers Max McGee and restaurateur Marno McDermott, recognized a gap in availability and a demand for Mexican food in the area. The restaurant chain saw some success from its inception but ultimately met its demise by 2004. 

There has not been a Chi-Chi's restaurant in the United States for almost 20 years, and there's a few reasons for that. The once-beloved Midwestern Tex-Mex restaurant endured failed expansion attempts and bankruptcy during its tenure, but the final straw that ended the chain was a hepatitis outbreak. In 2003, contaminated green onions were served at a Chi-Chi's location in the Pittsburgh area. The tainted onions caused more than 600 cases of hepatitis A and killed four people.

Chi-Chi's did live on a little bit longer through some international locations, and the brand rights were bought by Hormel in 1987 which means Chi-Chi's food products can still be bought in grocery stores. Let's get into the nitty gritty of Chi-Chi's downfall and its upcoming resurrection.

As previously mentioned, Chi-Chi's saw some initial success. The restaurant was known for specializing in Sonoran food, Sonora being a Northwestern state in Mexico with not-so-spicy cuisine. By 1986 the chain had expanded to more than 200 locations across the Midwest and further, but then it hit some snags.

While Chi-Chi's unique dining experience and cuisine played well in the Midwest, it had trouble taking off in other regions of the country. Restaurant openings in New York, New England area, Atlanta, Texas, New Mexico, and San Diego all turned out to be failures. By the early 1990s, Chi-Chi's was losing its footprint. These closures and increased competition in the dining space led the restaurant to file for bankruptcy in 2003. 

This was the worst possible time for a food safety controversy to strike — and yet, that's what happened. In fact, the wave of illnesses traced back to a Pittsburgh-area Chi-Chi's in 2003 is still considered the largest food-borne hepatitis A outbreak ever in the U.S. While an investigation determined that Chi-Chi's hygiene practices were likely not at fault — the green onions were probably already contaminated when they arrived at the restaurant — the scandal was too much for the chain to recover from, and all U.S. locations were closed by 2004. That was the end of Chi-Chi's restaurants in the U.S. Or, until next year that is.

Hormel Foods, which still owns the trademark for Chi-Chi's, has just announced that it has made a deal with Michael McDermott, son of the original founder, allowing for the use of the Chi-Chi's name on physical restaurant locations that are expected to open in 2025.

"I still have fond memories of growing up in the Chi-Chi's restaurants that my father built throughout their time, instilling in me the passion and determination to pursue my own career in the restaurant industry," said McDermott in a press release. The former founder's son created Chi-Chi's Restaurants, LLC, a company meant to revive the restaurant chain's former glory.

As part of that revival plan, McDermott plans to maintain some of the original elements of Chi-Chi's that customers were so fond of and continue to enjoy through Hormel including its packaged salsas, tortillas, and seasonings. McDermott plans to start this journey in the same areas where Chi-Chi's first saw success — the Midwest and some of the East Coast.

"We are excited to see the immense outpour of support from fans new and old surrounding the news of Chi Chi's return- while we are currently in the early stages of planning ... we can say the first two stores will be opened in Minnesota in 2025," McDermott added in a statement to The Takeout.