|Industry||Restaurants, grocery products|
|Fate||Bankruptcy (as restaurants in the U.S. and Canada)|
Richfield, Minnesota, U.S.
|Defunct||September 18, 2004 (as restaurants in the U.S. and Canada)|
Chi-Chi's is a Mexican-restaurant chain in operation in China, Belgium, Luxembourg, the United Arab Emirates, Kuwait, and Indonesia. The chain also once operated in the United States and Canada but exited those countries in 2004. 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 took leadership, the chain moved its headquarters to his hometown of Louisville. By March 1995, the chain had grown to 210 locations.
Chi-Chi's master franchise belongs now to a Swiss company which franchises Chi-Chi's in Europe, the Middle East, Asia, and North Africa, the best-represented country being Belgium, with 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 and Canada
Chi-Chi's last owner while the company was still in business in the U.S. was Prandium Inc., which had filed for bankruptcy several times, including in 1993 as Restaurant Enterprises Group Inc. and again 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 near 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 already had only 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 its choice of Chi-Chi's 76 properties, but 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 its remaining restaurants. Outback had hoped to convert many of the properties to its 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 a Dick's Sporting Goods store.
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- "Chi-Chi's - Accueil".
- "Salsafication trademark application" (PDF). Trademark Trial and Appeal Board. Retrieved 2007-05-16.
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- Chi-Chi's plans $35.2m sale of outlets, leases.(News Digests)(Brief Article) | HighBeam Business: Arrive Prepared