|Industry||Restaurants, grocery products|
|Fate||Bankruptcy (as restaurants in the U.S.)|
|Defunct||2004 (as restaurants in the U.S.)|
Chi-Chi's is a Mexican restaurant chain in operation in China, Belgium, Luxembourg, United Arab Emirates, Kuwait and Indonesia. The chain also once operated in the United States. Currently Chi-Chi's is also a brand of Mexican themed grocery foods (later purchased by Hormel) with an emphasis on salsa.
Chi-Chi's was founded in 1975 in Richfield, Minnesota, a suburb of Minneapolis by restaurateur Marno McDermott and former Green Bay Packers player Max McGee. MacDermott had previously founded the Zapata fast food Mexican chain, which later became Zantigo. From 1977 to 1986, the chain was run by former KFC executive Shelly Frank. When Frank came on, the chain moved their headquarters to Frank's hometown of Louisville. By March 1995, the chain had grown to 210 locations.
Chi-Chi's master franchise belongs now to a Swiss company who franchises Chi-Chi's in Europe, the Middle East, Asia, and North Africa, the most representative country being Belgium with already 15 units.
Management and marketing
In 2001, Chi-Chi's applied for a trademark on the word "salsafication" but was denied by the Trademark Trial and Appeal Board. The company's slogans were "A celebration of food" and, later, "Life always needs a little salsa."
Bankruptcy, hepatitis A, and closure in United States
Chi-Chi's last owner while still in business in the U.S. was Prandium Inc., who had filed for bankruptcy several times, including in 1993 as Restaurant Enterprises Group Inc. and in 2002 as Prandium. On October 8, 2003, Chi-Chi's and Koo Koo Roo, another Prandium subsidiary, filed for Chapter 11 bankruptcy themselves.
In November 2003, a month after filing for Chapter 11 bankruptcy, Chi-Chi's was hit with the largest hepatitis A outbreak in U.S. history, with at least four deaths and 660 other victims of illness in the Pittsburgh area, including high school students who caught the disease from the original victims. The hepatitis was traced back to green onions at the Chi-Chi's at Beaver Valley Mall in Monaca, Pennsylvania, about 30 miles (48 km) northwest of Pittsburgh. Chi-Chi's settled the hepatitis A lawsuits by July 2004. At the time the suits were settled, Chi-Chi's only had 65 restaurants, less than half of the number from only four years before.
In August 2004, Outback Steakhouse bid $42.5 million for the rights to buy their choice of Chi-Chi's 76 properties, but they did not purchase the Chi-Chi's name, operations or recipes. On the weekend of September 18, 2004, Chi-Chi's closed all 65 of their remaining restaurants. Outback had hoped to convert many of the properties to their own restaurants, but instead eventually sold the majority of the properties to Kimco Realty Corporation, a real estate investment trust company in New Hyde Park, New York. The location where the hepatitis outbreak started in Monaca has been the home of several different Mexican-themed restaurants in the ensuing years, with parts of the location's site demolished to make room for Dick's Sporting Goods.
- "Chi-Chi's Inc.". Funding Universe. Retrieved 2008-10-09.
- Schoifet, Mark (January 27, 1986). "Frank exits Chi-Chi's, plans early retirement". Nation's Restaurant News. Retrieved July 2, 2010.
- Benmour, Eric (June 14, 1996). "Chi-Chi's closes oldest store here as pullback continues". Business First of Louisville. Retrieved July 2, 2010.
- "Salsafication trademark application". Trademark Trial and Appeal Board. Retrieved 2007-05-16.
- Spector, Amy. "Prandium restaurant brands for sale; Koo Koo Roo, Chi-Chi's file for Chapter 11 - News - Prandium Inc". Nation's Restaurant News.' October 20, 2003. FindArticles.com. Accessed October 24, 2007.[dead link]
- "Hepatitis A outbreak claims its 4th victim". Deseret News (Salt Lake City). April 4, 2004. FindArticles.com. Accessed October 24, 2007.
- "Hepatitis A outbreak spreads to students". Deseret News (Salt Lake City). December 14, 2003. FindArticles.com. Accessed October 24, 2007.
- "Business at Beaver Valley Mall Chi-Chi's nearly back - Pittsburgh Post-Gazette". Pittsburgh Post-Gazette. February 15, 2004.
- "Chi-Chi's gets court OK to settle hepatitis A claims". Nation's Restaurant News. July 12, 2004. FindArticles.com. Accessed October 24, 2007.
- Lockyer, Sarah E. "Chi-Chi's shuts all units; Outback buys site rights: Mexican chain, in Chapter 11, retains brand, operations, recipes, trade secrets". Nation's Restaurant News. October 4, 2004. FindArticles.com. Accessed October 24, 2007.
- Lockyer, Sarah E. (2004). "Chi-Chi's shuts all units; Outback buys site rights: Mexican chain, in Chapter 11, retains brand, operations, recipes, trade secrets". Nation's Restaurant News.
- Chi-Chi's plans $35.2m sale of outlets, leases.(News Digests)(Brief Article) | HighBeam Business: Arrive Prepared