Chi-Chi's
| Company type | Franchise |
|---|---|
| Industry | Restaurant, Food products |
| Founded | August 1976 in Richfield, Minnesota, United States |
| Founder | Marno McDermott, Max McGee |
| Headquarters | Belgium |
Area served | Europe, North Africa, China, United States (grocery products) |
Key people | Michael McDermott (revival leader) |
| Products | Mexican-style food products, restaurant services |
| Owner | MegaMex Foods (grocery brand), Chi-Chi's Restaurants, LLC (restaurant operations revival) |
Chi-Chi's represents a Belgian dining franchise and a brand of Mexican-style grocery products owned by MegaMex Foods. The brand is undergoing a revival spearheaded by the son of one of its original founders, who intends to launch two new restaurants in Minnesota. Additionally, the Chi-Chi's name is associated with a range of Mexican food items sold in the U.S., stemming from the original North American restaurant chain’s 1987 sale of naming rights for grocery merchandise.
Restaurant chain
By 2022, Chi-Chi's had diminished to a single restaurant located in Vienna, Austria. The chain was once briefly under the ownership of Tumbleweed, Inc. Previously operating across the United States and Canada, it withdrew from those markets in 2004 and closed its remaining German and Belgian locations by 2022. The Austrian branch maintained an active website until August 2024; however, it was discontinued by November 2024, marking the apparent conclusion of the European presence.
Founding
The creation of Chi-Chi's is credited to restaurateur Marno McDermott—named after his wife’s nickname "Chi Chi"—and former Green Bay Packers athlete Max McGee. The inaugural restaurant debuted in Richfield, Minnesota, in August 1976. Prior to this, McDermott had established the Zapata fast-food Mexican chain, which later transformed into Zantigo. From 1977 through 1986, former KFC executive Shelly Frank directed the company and relocated its headquarters to Louisville, Kentucky. By March 1995, Chi-Chi's had grown to encompass 210 locations.
Management and marketing
In 2001, Chi-Chi's sought trademark protection for the term "salsafication," but the Trademark Trial and Appeal Board rejected the application. The company’s advertising slogans included "A celebration of food" and later evolved to "Life always needs a little salsa."
Bankruptcy, hepatitis A outbreak, and closure in United States and Canada
The final owner of Chi-Chi's in the U.S. and Canada was Prandium Inc., which had filed for bankruptcy on multiple occasions, including years 1993 and 2002. On October 8, 2003, both Chi-Chi's and its subsidiary Koo Koo Roo filed for Chapter 11 bankruptcy protection. That same month, the flagship Richfield, Minnesota restaurant was listed for sale.
In November 2003, shortly after declaring bankruptcy, Chi-Chi's became linked to the largest hepatitis A outbreak recorded in U.S. history, resulting in at least four fatalities and over 660 reported illnesses around Pittsburgh. Investigations identified contaminated green onions at a Beaver Valley Mall location near Monaca, Pennsylvania as the source. By July 2004, Chi-Chi's had settled related legal claims while its number of restaurants had decreased to 65—less than half compared to four years earlier.
In August 2004, Outback Steakhouse made a $42.5 million bid to acquire rights to 76 Chi-Chi's properties but did not purchase the brand name, operational business, or recipes. By September 18, 2004, all remaining Chi-Chi's outlets were shuttered. Outback initially intended to convert many sites but ultimately sold most properties to Kimco Realty Corporation, a real estate investment trust headquartered in New Hyde Park, New York.
Revival
On December 3, 2024, plans were announced for Chi-Chi's restaurant chain to return to the U.S. market in 2025. Michael McDermott, son of original founder Marno McDermott, will oversee operations through Chi-Chi's Restaurants, LLC. Hormel Foods—the current owner of the trademark—has licensed the brand name for physical dining establishments. Shortly thereafter, McDermott disclosed intentions to transform his two Rojo Mexican Grill locations in St. Louis Park and Maple Grove into Chi-Chi’s restaurants.
Europe
Belgian businessman Francis Leroy secured the master franchise rights for Belgium in 2002, subsequently broadening the brand's reach to Europe in 2008, North Africa in 2011, and China in 2012. An attempt to establish a presence in Denmark occurred in 2011 but met with limited success. This resulted in the shutdown of five underperforming outlets in Belgium by mid-2015.
Chi-Chi's made its debut in Austria with a restaurant opening in Vienna in 2018. By January 2022, only three European branches were operational—two located in Liège and one in Brugge, Belgium—with no website activity noted after May 2022. The Brugge establishment ceased operations in October 2022 due to declining business.
Grocery brand
In 1987, Hormel Foods acquired the rights to manufacture and market Chi-Chi's branded salsa and related items within the United States, reaching annual sales of $60 million by 1996. In 2009, Hormel partnered with Mexico-based Herdez Del Fuerte to create MegaMex Foods, LLC, a joint venture with equal ownership aimed at producing and distributing Mexican food products across the U.S. The Chi-Chi's brand became part of a portfolio including Herdez, La Victoria, and Búfalo. The product range under Chi-Chi's features salsas, dips, tortillas, tortilla chips, and taco seasoning mixes, predominantly retailed through major grocery chains and discount outlets.
In April 2021, MegaMex appointed a TikTok influencer as the Chi-Chi's brand ambassador for Cinco de Mayo promotions, demonstrating a deliberate effort to boost brand engagement via social media platforms.