The 1970s Mexican Chain That Came Back 20 Years After Closing

If you're a certain age, there are likely chain restaurants from your childhood that you wish would make a comeback. Maybe you miss the Ground Round, an off-shoot of Howard Johnson's hotels — lucky for you, a married couple has reopened a location in Massachusetts. And here's additional news that will restore your belief in miracles: Beloved 1970s Mexican chain Chi-Chi's has made a comeback in 2025, just over 20 years after the last location closed its doors.

Hormel Foods reached an agreement with Michael McDermott, the son of Chi-Chi's original founder, Marno McDermott, in 2024, allowing the entrepreneur to use the brand name to open revamped Chi-Chi's locations. Hormel owns the trademark for Chi-Chi's and has kept the brand alive through salsa, dips, tortillas, chips, and cooking mix lines sold in grocery stores.

So while other restaurant chains are declaring bankruptcy and shuttering locations, Chi-Chi's is set to open its first two new locations in Minnesota, taking over former Rojo Mexican Grill restaurants in St. Louis Park and Maple Grove. And while there are certainly items we want to see on the comeback menu, it will feature a blend of old favorites, carryovers from the Rojo restaurant, and maybe some brand-new ones, too.

Why did Chi-Chi's close in the first place?

Chi-Chi's was riding high throughout the 1980s, after a promising start when the chain first opened in 1975. At its height in 1986, it had over 200 locations spread across the U.S., but 17 years later that number was down to a little over half. This decline was due to several factors, including oversized restaurant layouts that were inefficient to run; locations that failed in certain cities, including New York City and San Diego; poor corporate communication; and shifting consumer trends. All of these elements combined so that in 2002 Chi-Chi's filed for Chapter 11 bankruptcy. The chain might have been able to emerge from these financial protections renewed, were it not for a major calamity the following year.

Emergency room doctors reported signs of a Hepatitis A outbreak to the Beaver County Health Department after treating patients in late October 2003. An investigation revealed that the source of the disease was green onions from a local Chi-Chi's, used fresh and raw in its mild salsa, which was distributed free with chips at every table.

All told, over 9,000 people were exposed to Hepatitis A, and four people died from liver failure caused by the illness. This was the final stake through Chi-Chi's heart, and the last U.S. location closed in 2004.

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