Chi-Chi's

Chi-Chi's

Industry	Restaurants, grocery products
Fate	Bankruptcy (as restaurants in the U.S. and Canada)
Founded	1975
Defunct	2004 (as restaurants in the U.S. and Canada)
Products	Mexican food
Parent	Hormel
Website	www.chichis.com

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 that business in 2004 in those territories. Currently Chi-Chi's is also a brand of Mexican themed grocery foods (later purchased by Hormel) with an emphasis on salsa.

Founding

Front of former Chi-Chi's restaurant in Alexandria, Virginia.

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.^[1] From 1977 to 1986, the chain was run by former KFC executive Shelly Frank.^[2] 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.^[3]

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 most representative country being Belgium with 15 units.^[4]

Management and marketing

In 2001, Chi-Chi's applied for a trademark^[5] 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."^[1]

Bankruptcy, hepatitis A, and closure in United States and Canada

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.^[6] On October 8, 2003, Chi-Chi's and Koo Koo Roo, another Prandium subsidiary, filed for Chapter 11 bankruptcy themselves.^[6]

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,^[7] including high school students who caught the disease from the original victims.^[8] 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.^[9] Chi-Chi's settled the hepatitis A lawsuits by July 2004.^[10] 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.^[11]

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.^[11] 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.^[12] 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.

Grocery brand

Hormel Foods, who had bought the rights to use the Chi-Chi's brand on grocery items, continues to produce Chi-Chi's salsa and related products, and uses the chichis.com domain name to market them.

See also

• Chi-Chi's Europe

References