Chi-Chi’s, a Mexican restaurant chain that closed its doors 20 years ago, is planning a comeback next year after reaching an agreement with Hormel Foods. Michael McDermott, the son of one of the founders, will be able to use the Chi-Chi’s name on newly opened restaurants in 2025.
Under the deal, Mr. McDermott plans to secure funding and open two initial locations in Minnesota before expanding to other areas. He aims to recreate the original development path taken by the brand in the Midwest and East Coast. Hormel Foods’ spokesman stated that the legacy and spirit of the brand remain strong.
Chi-Chi’s was founded in 1975 by Marno McDermott and Max McGee, and it once had over 200 locations nationwide. The casual restaurant sold popular dishes like chimichangas and deep-fried burritos. However, the company struggled with a hepatitis A outbreak in 2003, which led to its bankruptcy filing.
Experts say that consumers are unlikely to remember the outbreak but may recall fond memories of visiting Chi-Chi’s as children. Nostalgia has helped revive other brands like Volkswagen and Polaroid. However, reviving a brand from scratch is challenging, and overcoming long absence and stiff competition in the Mexican food market will be crucial for Chi-Chi’s success.
Professor Eric Greenleaf noted that making money in the restaurant business is difficult, while Professor Jeffrey Sharlach emphasized the importance of nostalgia in branding. Sheelagh McNeill contributed research to this story.
Source: https://www.nytimes.com/2024/12/07/business/chi-chis-restaurant-mexican.html