While multiple casual dining chains are looking to reduce their footprints this year, a once-beloved but long-shuttered brand is preparing for a comeback.
In late 2024, Michael McDermott announced he would revive Chi-Chi’s, the restaurant company founded by his father, Marno, and former Green Bay Packers wide receiver Max McGee in the 1970s.
It’s been roughly 20 years since Chi-Chi’s closed following several challenges. Despite that, and the struggles other brands are facing, the younger McDermott told Nexstar that Chi-Chi’s is prepared.
“I’ve been doing this long enough to realize, too, that everything is cyclical,” said McDermott, who has built his career in the restaurant industry with brands like Kona Grill and Rojo Mexican Grill. “I just think there’s a lot of brand strength [in Chi-Chi’s] and I think, too, with the locations that we choose, you know, that’s always a big deal in our business and going into the right markets at the right time.”
Chi-Chi’s return will begin in a converted Rojo Mexican Grill in St. Louis Park, located just outside of Minneapolis, not far from where the first-ever Chi-Chi’s opened in 1975. A second Rojo Mexican Grill in nearby Maple Grove will also be converted to a Chi-Chi’s, McDermott told Nexstar.
He noted that the company is planning to develop a franchise program and expand in the Midwest and East Coast as Chi-Chi’s originally did. McDermott also hinted at the Southwest, a region he called “competitive.”
Fans of the original Chi-Chi’s restaurants — named after a fond nickname for McDermott’s mother, Ruthann — can expect to see some familiar menu offerings with the return of the brand. According to McDermott, that includes seafood enchiladas, deep-fried ice cream, and chimichangas. Some of the Rojo’s menu will carry over, while new items — like birria tacos — are being considered.
The decor will be approached in a similar fashion. There will be some influences from the early days of Chi-Chi’s in the 1970s and 80s, like hanging plants and some of the color patterns, but brought “forward,” McDermott said.
Unlike the first Chi-Chi’s restaurants, fans have the chance to get an equity stake in the brand.
Last month, Chi-Chi’s partnered with StartEngine, an “alternative platform that allows everyday investors to invest in startups, collectibles, and other alternative assets,” in order for “investors of all backgrounds to have a seat at the table.”
A minimum investment of $250 is required in exchange for equity in Chi-Chi’s. The company says funds raised may be used to help expand its restaurant footprint, adding that investors “will be part of an early-stage expansion strategy with both company-owned and franchised opportunities.”
While these are non-voting shares, McDermott said he’ll be accessible to any investor hoping to reach out.
As of March 6, 195 have invested via StartEngine with nearly $582,000 having been raised. On March 5, McDermott and two advisors — John Butorac and Kerry Kramp — invested a total of $295,000, a message on the investment page reads. An additional $5,000 investment was made by “an individual related to an insider,” who appears to be McDermott’s mother, considering the following sentence identifies her as such.
The maximum number of shares, currently valued at $1.54 each, being offered is over 2.2 million.
What happened to the original Chi-Chi’s chain?
Chi-Chi’s was started in the 1970s by McDermott’s father and McGee. The brand, and its more than 200 locations, would change ownership several times through the next decades, culminating with a bankruptcy filing in late 2003.
A short time later, hepatitis A cases reported in the Pittsburgh area were traced back to green onions served at a Chi-Chi’s in a nearby Monaca, Pennsylvania, mall. More than 600 people were sickened and four died, according to reports at the time, and roughly half of those who became ill sought damages against Chi-Chi’s.
The last Chi-Chi’s closed its doors in 2004. Hormel Foods bought the Chi-Chi’s trademark afterward and has produced Mexican foods under the brand. The company confirmed that products produced under Chi-Chi’s name will still be available.
