Chi-Chi's Mexican Restaurant Chain Is Coming Back After Closing 20 Years Ago

Chi-Chi's Mexican Restaurant chain once had 200 locations throughout the U.S., after launching in the Midwest during the 1970s. The chain was well-known enough at the time that it even sparked a Saturday Night Live skit. However, it has also generated controversy.

The restaurant chain is trying to stage a comeback after 20 years, starting with a single restaurant in its home state of Minnesota. Some key details surrounding the Chi-Chi's comeback:

• According to the Minneapolis Star-Tribune, the "Minnesota-born chain" launched "nearly 50 years ago and introduced many Midwesterners to Tex-Mex food." At that time, many Midwesterners had limited exposure to Mexican cuisine.
• The first new restaurant in the comeback attempt opens in St. Louis Park, MN, on October 6, according to the Star-Tribune.
• Along the way, though, the restaurant chain has received some criticism, including over its name and questions of authenticity.
• The growing Hispanic population in the U.S. has "elevated the role of Latin cuisine in shaping American dining culture," with authentic regional specialties finding devoted fans, and marking a significant change in the food landscape from Chi-Chi's heyday, when the chain was considered the "Midwest king of Tex-Mex dining," according to Forbes.

A Former Green Bay Packers Player Originally Helped Launch Chi-Chi's Mexican Restaurant Chain

Chi-Chi's is ready to open its first restaurant in 20 years https://t.co/tI9kQoj6jv pic.twitter.com/RcBiaPwMrM

— Restaurant Development Experts, LLC. (@RDE_Restaurants) October 1, 2025

According to CNN, Chi-Chi's "started in Minnesota in 1975 by Marno McDermott and Green Bay Packers player Max McGee."

The chain closed down in 2004 after a hepatitis A outbreak in Pennsylvania was "traced to green onions served in its complimentary salsa, sickening about 650 people," CNN reported, adding that four people died and there were "several hundred lawsuits."

Outback Steakhouse eventually purchased 76 Chi-Chi's restaurants for $42.5 million after a bankruptcy the year before the hepatitis outbreak.

The Chi-Chi's Restaurant Chain Promises an 'Upgraded' Experience

A press release says that the chain is now "led by restaurant industry veteran Michael McDermott, son of CHI-CHI's co-founder Marno McDermott." The release promises guests "a mix of enhanced menu items, original favorites," and "an upgraded bar experience."

"More than 2,000 people have already invested over $2.3 million through the brand's equity crowdfunding campaign on StartEngine," the press release says.

"The St. Louis Park location will serve as the flagship for the brand's relaunch, with additional locations planned in the future," it adds.

The Restaurant Chain's Name Has Provoked Criticism

According to Tasting Table, the chain got its start in Minnesota during an era when "there weren't many options for Mexican cuisine in the region, and its popularity took off."

The name for the chain came from McDermott's wife, "whose nickname was Chi-Chi," according to Tasting Table.

However, the chain has run into controversy. According to Tasting Table, "advocates for diversity have stepped forward with their concern on the ignorance of the name," noting that "chi-chis" is "Spanish slang for a woman's breasts." The chain faced a "backlash" after it was accused by some of "cultural appropriation," Tasting Table reported.

Pictured: (l-r) Darrell Hammond as Al Gore, Will Ferrell as George W. Bush during "Chi-Chi's" skit on December 16, 2000 NBCUniversal via Getty Images via Getty Images)

(Photo by Dana Edelson/NBCU Photo Bank/

The chain was also accused of trying to expand too fast, and some locations outside the Midwest were "a major flop," Tasting Table reported. In addition, the tradition of giving a birthday sombrero to customers has been criticized.

According to Forbes, at its height, Chi-Chi's "was a household name in parts of the US, serving sizzling fajitas and oversized margaritas to millions of Americans." However, Forbes noted that, today, consumers have many more options for authentic Mexican food, a modern landscape "shaped in part by the growing influence of a broader Latin diaspora."

On Reddit threads, people who remember Chi-Chi's are debating the chain's comeback, with some feeling nostalgic and others offering different perspectives and criticisms.

Thus, according to Forbes, the "question isn’t just about nostalgia," but whether Chi-Chi's "can carve out a place in this transformed landscape" at all.

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