Beloved for over three decades, this iconic restaurant chain captured the hearts of millions with its sizzling fajitas, deep-fried ice cream, and Friday-night margaritas. Generations of families created countless lasting memories within its walls, until it suddenly disappeared, leaving only nostalgia behind.
While the Mexican restaurant still lives on in grocery stores, its physical locations have been on hiatus for two decades. For many fans, the hope of its return had long faded, but now, that dream is coming true, as the beloved restaurant is finally making a highly anticipated comeback.
Chi-Chi’s Mexican Restaurant is officially returning and set to open its doors on October 6 at 1602 West End Blvd. in St Louis Park, Minneapolis, Minnesota. As of September 30, the restaurant permits have been filed, and construction of the first location is already underway.
Chi-Chi’s Mexican Restaurant makes a surprising comeback
The Mexican restaurant chain began plotting a revival in December last year, when CEO Michael McDermott, grandson of Chi-Chi’s co-founder Marno McDermott, struck a deal with Hormel Foods, the owner of Chi-Chi’s trademark and retail products, to relaunch physical restaurants under a new company called Chi-Chi’s Restaurants LLC.
“I grew up inside Chi-Chi’s restaurants. I watched my father and uncle build something people loved — not just a restaurant, but an experience that made people happy,” said McDermott. “After years of running my own restaurants, I woke up one morning during meditation and realized: It’s time.”
To fund the reopening, McDermott launched an online funding campaign aiming to raise $3.5 million to open two Minnesota locations and a franchise model for a potential national expansion. Contributors can invest a minimum of $250 in exchange for a stake in the company.
With less than a month remaining, over $2.4 million has already been pledged by 2,074 investors.
Chi-Chi’s restaurants had a tumultuous past
Chi-Chi’s filed for Chapter 11 bankruptcy in October 2003, closing dozens of locations. Months later, it was revealed to be the source of the largest hepatitis A outbreak in U.S. history, linked to contaminated green onions, which affected 660 people and caused four deaths.
In 2004, Outback Steakhouse Inc. acquired the remaining 76 Chi-Chi’s restaurants for $42.5 million, converting most into its own brands, including Outback Steakhouse, Carrabba’s Italian Grills, Bonefish Grills, Fleming’s Prime Steakhouse and Wine Bars, Roy’s, and Cheeseburger in Paradise.
With no remaining U.S. locations, Chi-Chi’s continued only as a brand of Mexican food grocery products, though a single location in Vienna, Austria, has kept its restaurant alive internationally.
Mexican restaurant industry grows
After years of declining foot traffic and sales, and with many major restaurant chains filing for bankruptcy and conducting mass store closures, the restaurant industry is now experiencing a revival, particularly in the Mexican food category.
According to the U.S. Department of Commerce, sales of food services and drinking places grew 5.5% year-over-year to $787 billion.
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Mexican restaurants, in particular, are surging in popularity in the U.S. IBISWorld forecasts the industry’s revenue to reach $96.4 billion by 2025, with an annual growth rate of 4.7% over the past five years.
“Mexican restaurants are beloved for their vibrant flavors, affordability, and cultural authenticity. Many restaurants in the country — from New York to Arizona — capitalize on the demand for customizable, flavorful dishes like tacos, burritos, and enchiladas,” said Restroworks Head of Marketing & Corporate Communications Nikunj Kewalramani.
“The presence of a growing Hispanic and Mexican American population has also fueled the demand for more authentic and more expensive Mexican restaurants, expanding the appeal beyond fast casual formats.”
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