(Thechieftainspear) –While many casual dining chains are scaling back in 2024, an iconic restaurant brand from the past is gearing up for a fresh start. Chi-Chi’s, a once-thriving Mexican restaurant chain, is making a return after a 20-year absence, thanks to the efforts of Michael McDermott.
McDermott, the son of Chi-Chi’s co-founder Marno McDermott, recently announced plans to relaunch the brand, which originally debuted in the 1970s. Despite past setbacks, he believes Chi-Chi’s has the potential to thrive once again.
“I’ve been in this business long enough to know that restaurant trends are cyclical,” McDermott said. Having worked with brands like Kona Grill and Rojo Mexican Grill, he sees strong nostalgia and market potential for Chi-Chi’s.
Chi-Chi’s First Locations and Future Expansion
The first step in Chi-Chi’s revival will take place in St. Louis Park, Minnesota, just outside of Minneapolis—near the location of the first Chi-Chi’s restaurant, which opened in 1975. A former Rojo Mexican Grill restaurant will be transformed into the new Chi-Chi’s, with a second location planned for Maple Grove, Minnesota.
McDermott also revealed plans for a broader expansion across the Midwest and East Coast, similar to the brand’s original growth strategy. Additionally, he is exploring potential entry into the Southwest, though he acknowledged the region’s competitive dining landscape.
Bringing Back Classic Menu Favorites
Chi-Chi’s loyal fans can expect to see a mix of original favorites and modern additions on the menu. Signature items such as seafood enchiladas, deep-fried ice cream, and chimichangas will make a return, while newer offerings—such as birria tacos—are under consideration. Some dishes from Rojo Mexican Grill will also be carried over.
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The restaurant’s interior will reflect elements of Chi-Chi’s early years, incorporating 1970s and 80s design influences like hanging plants and warm color schemes, while blending in a more contemporary aesthetic.
Investment Opportunity for Fans
In a unique move, Chi-Chi’s is offering everyday investors a chance to own a piece of the brand. Through a partnership with StartEngine, the company is allowing individuals to invest with a minimum contribution of $250.
These investments will help fund expansion efforts, including company-owned and franchised locations. While the shares being offered do not include voting rights, McDermott emphasized his openness to engaging with investors.
As of early March, nearly $582,000 had been raised from 195 investors, with additional contributions coming from McDermott and key advisors. The company has made over 2.2 million shares available for purchase, priced at $1.54 per share.
What Led to Chi-Chi’s Closure?
Chi-Chi’s experienced significant growth in the late 20th century, expanding to over 200 locations. However, financial troubles led the company to file for bankruptcy in 2003.
Shortly after, the brand suffered a major blow when a hepatitis A outbreak was linked to a Pennsylvania location. More than 600 people fell ill, and four deaths were reported due to contaminated green onions served at the restaurant. Legal claims followed, and Chi-Chi’s was unable to recover.
By 2004, all remaining U.S. locations had shut down. The Chi-Chi’s trademark was later acquired by Hormel Foods, which has continued to sell Mexican food products under the brand name. Hormel has confirmed that these products will remain available even as the restaurant chain is revived.
With McDermott at the helm, Chi-Chi’s is now poised for a fresh start, aiming to bring back a beloved dining experience for a new generation of customers .
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