Spectre Brands

GhostFull-service Mexican restaurants · Louisville, Kentucky

Chi-Chi’s

First restaurant opened 1975 or 1976. Chapter 11 filed Oct 8, 2003. Restaurants closed Sep 20, 2004. One reopened Oct 6, 2025.

Chi-Chi’s is remembered as the chain a hepatitis outbreak killed. Its owner’s SEC filings show it was bankrupt four weeks before anyone knew about the outbreak.

Why ghost: Hormel Foods still sells salsa, chips and tortillas under the Chi-Chi’s name, and a restaurant licensed by Hormel to the founder’s son has traded as Chi-Chi’s in St. Louis Park, Minnesota since October 6, 2025; the original chain closed in September 2004.21283638

A stone office building with two red neon Chi-Chi’s signs over arched ground-floor openings and people crossing the street
A licensed Chi-Chi’s in Brussels, 2011Photo: Sarah Stierch, via Wikimedia Commons, CC BY 4.0.
A pale yellow web page with a cartoon to-go box mascot, a list of links marked with gold stars and the line Life always needs a little Salsa
chi-chis.com, April 1999Cropped from an Internet Archive capture of April 22, 1999. Shown for commentary.
A stucco mall entrance with a red tile awning and the ghost outline of removed sign letters on the wall
A closed Chi-Chi’s at a dead mall, 2013Photo: Nicholas Eckhart from Elyria, Ohio, United States of America, via Wikimedia Commons, CC BY 2.0.

Chi-Chi’s started in half of a bar in Richfield, Minnesota and was billed at its peak as the largest Mexican restaurant chain east of the Mississippi. It was sold to Foodmaker in 1988 and folded into Family Restaurants, later Prandium, in 1994, each time with borrowed money. Sales at its restaurants fell in six of the seven years from 1996 to 2002. On October 8, 2003 Chi-Chi’s filed for Chapter 11. In November, health officials traced a hepatitis A outbreak to green onions served at its restaurant in the Beaver Valley Mall near Pittsburgh. The last restaurants closed in September 2004 when Outback Steakhouse bought the real estate. The name survived on grocery shelves, and in 2025 it went back on one restaurant. This page is built from the SEC filings of the chain’s owners, the CDC’s reports and the press of the time, and it says where they disagree.

The chain in four numbers

235
restaurants operated or franchised when Family Restaurants took the chain over in January 19943
$144.8M
of goodwill from that purchase written off within the same year3
601
hepatitis A patients traced to one restaurant in 2003; three died, by the CDC’s final count13
$42.5M
paid by Outback Steakhouse for the rights to 76 properties. The name was not part of the sale1820

Key findings

  1. It was bankrupt before the outbreak. Chi-Chi’s, Inc. filed for Chapter 11 on October 8, 2003. Pennsylvania’s health department issued its first advisory about the Beaver Valley Mall restaurant on November 3 (26 days later, derived).925
  2. The sales decline was ten years old. Comparable-restaurant sales fell 11.5% in 1996, 8.2% in 1997 and 6.6% in 2002, and rose in only one year between. Company-operated restaurants went from 184 to 128.457
  3. Each owner bought it with debt. Foodmaker paid $235M in 1988. The 1994 deal that created Family Restaurants was financed with $450M of notes and a $150M credit line, and the $144.8M of goodwill it put on the books for Chi-Chi’s was written off that year. The parent went through its own Chapter 11 in 2002.23746
  4. The outbreak ended the sale, not the solvency. A buyer had signed a letter of intent for Chi-Chi’s when it filed. After 601 infections and three deaths at one restaurant, the chain said sales were hurt systemwide and later claimed $55M for the lost deal. It paid more than $40M in settlements.9131523
  5. The name outlived the restaurants twice. Outback bought sites, not the brand. Hormel kept selling Chi-Chi’s salsa, licensed restaurants went on trading in Europe for years, and in 2025 Hormel licensed the name to the founder’s son for a new restaurant.20262940

Post-mortem No. 037 · Every figure links to a numbered source · Derived figures, estimates and unverified claims are labeled

The story

A bar in Minnesota, three owners and a bucket of green onions

Two stories are told about Chi-Chi’s. In one, a hepatitis outbreak destroyed a healthy chain. In the other, which is the one in the filings, a chain that had been shrinking for a decade ran out of money first and then ran out of luck.

Chapter 1 of 6

$2M

first-year sales, against a forecast of $400,000

A plain web page headed Chi-Chi’s History with paragraphs of text under the subheadings Roots and Building the Team
The “Chi-Chi’s History” page of chi-chis.com as the Internet Archive captured it on May 9, 1998. It dates the first restaurant to 1976.1

1975 – 1986 · Richfield and Louisville

Half of a football player’s bar

The first Chi-Chi’s opened in half of the Left Guard, a bar and restaurant in Richfield, Minnesota owned by Max McGee, a former Green Bay Packers receiver.142 The idea was Marno McDermott’s. He had already built a Mexican fast-food business, Zapata Foods, and sold it to Heublein for $4M, and he believed Minnesotans would pay for a sit-down version.1 The company’s own history said the name was his wife’s nickname.1

Sources do not agree on the year. A reference history and the revived company say 1975; the chain’s own website in 1998 said 1976.1238 They agree on what happened next. The first-year forecast was $400,000 and sales reached $2M.12

A Minneapolis stockbroker, John Stephens, bought the rights to operate and franchise the restaurants. In October 1977 Shelly Frank, a 33-year-old vice president at Kentucky Fried Chicken, became president, and the headquarters moved to his home town of Louisville.1 In five years the system went from four restaurants to 92 and revenue from slightly more than $1M to $97.6M.1 A former executive later summed up the offer: “It took Mexican food and really put in full-service quality with fast-food pricing.”15

A reference history says 42 restaurants opened in 1985 alone, that net income peaked in 1984 at $16.7M and that the chain had 200 restaurants by 1986. It also describes what the pace cost: restaurants of 10,000 to 12,000 square feet that were too large to run profitably, failed entries into New York and New England, and management turnover as high as 80% in company-owned restaurants.2

You got a lot of food for a reasonable price. And there were the margaritas.

Jack Butorac, former Chi-Chi’s vice president, The Courier-Journal, Nov 30, 200315

Chapter 2 of 6

$235M

paid by Foodmaker in April 1988, as reported later

Commercial · 1987A fajita commercial dated 1987 Uploaded by augustv123, who dates it to 1987, the year before Foodmaker bought the chain.442 Watch on YouTube

1986 – 1994 · Foodmaker

Sold to the owners of Jack in the Box

Frank retired in 1986 and Hal Smith, who had run Chili’s, took over. By a reference history’s account he cut corporate staff by 18%, shortened managers’ hours, brought management turnover down to 35% within a year and closed 21 marginal restaurants, taking a $20M write-off.2

In April 1988 Foodmaker Inc. of San Diego, the owner of Jack in the Box, bought the company. The price is given as about $235M for 129 company-operated restaurants, with 77 more franchised.1215 The same history calls 1990 the chain’s best year, with sales of $450M, and says that by 1992 guest counts were falling at its 160 company-owned and 65 franchised restaurants while Taco Bell and casual-dining chains took customers.2 Foodmaker’s own accounts show Chi-Chi’s sales of $404.5M in the fiscal year that ended on October 3, 1993.11

Not everyone blamed the market. Jack Butorac, who left Chi-Chi’s two years before the sale, told Louisville’s Courier-Journal in 2003 that Foodmaker “tried to convert it to a California concept,” and that the company had borrowed against Chi-Chi’s real estate to pay for the purchase.15 That is one former executive’s view; we have no filing that tests it.

In 1992 Chi-Chi’s bought a major franchisee, Consul Restaurant Corp., out of Chapter 11 for $8.7M in cash and kept 22 of its 26 restaurants.211

They tried to convert it to a California concept.

Jack Butorac, on Foodmaker, The Courier-Journal, Nov 30, 200315

Chapter 3 of 6

−11.5%

fall in sales at comparable Chi-Chi’s restaurants in 1996

Original illustration of a closed restaurant with a blank sign. Not a drawing of a real location.

1994 – 2002 · Family Restaurants and Prandium

A write-off in the first year

On January 27, 1994 Foodmaker, Apollo and Green Equity Investors took control of Restaurant Enterprises Group, which had been through a bankruptcy reorganization, renamed it Family Restaurants Inc. and merged Chi-Chi’s into it.211 The filing put the price of Chi-Chi’s at about $270.0M including assumed debt, for a business that operated or franchised 235 restaurants. The new company sold $300.0M of senior notes and $150.0M of discount notes and opened a $150.0M credit line.346

Before the year was out it wrote off all $144.78M of the goodwill recorded for Chi-Chi’s.3

From 1996 the filings report the division on its own, and the numbers run one way. Company-operated restaurants went from 184 at the end of 1996 to 128 at the end of 2002. Sales went from $278.1M to $186.4M, a fall of 33% (derived). Sales at comparable restaurants dropped 11.5% in 1996 and 8.2% in 1997, rose 1.8% in 1998, then fell every year after.4567 In late 1998 the company marked 48 Chi-Chi’s for sale or closure and set aside $22.9M for it.5

The parent kept changing shape around it. It sold its family-restaurant division in 1996, bought Koo Koo Roo and Hamburger Hamlet in October 1998, renamed itself Prandium in 1999 and sold El Torito in June 2000, which left Chi-Chi’s as its largest business.246 On May 6, 2002 Prandium filed a pre-packaged Chapter 11 of its own. The plan took effect on July 2. Nine months later its annual report said the results raised “substantial doubt about the Company’s ability to continue as a going concern.”7

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

Prandium Inc., annual report for 2002, filed Mar 31, 20037

Chapter 4 of 6

601

patients in the CDC’s final count; three died

Original illustration of green onions stored root side down in a bucket of ice, as the CDC described the restaurant’s practice.12 Not a photograph.

Oct – Nov 2003 · Delaware and Monaca

Bankruptcy first, then the outbreak

A plan to sell all of Prandium for $6.4M in cash fell apart in the summer of 2003 when one of the investors pulled out.817 On October 8, 2003 Chi-Chi’s, Inc. and Koo Koo Roo filed for Chapter 11 in Delaware. Chi-Chi’s listed debts of more than $100M and said it ran 128 restaurants in 20 states. It had a non-binding letter of intent from a buyer, a company controlled by the entertainment promoter Jack Utsick.91516

That same week, people who ate at the Chi-Chi’s in the Beaver Valley Mall in Monaca, Pennsylvania were being infected with hepatitis A. Of the patients who could recall a single visit, 84% had eaten there between October 3 and October 6.13 Nobody knew until emergency-room doctors noticed the cases. The state health department issued an advisory on November 3 and the restaurant closed.25

The CDC found the source in the mild salsa, which was made in batches of 40 to 80 quarts with raw green onions and served free with chips to every table. The onions had been grown in Mexico and were contaminated before they reached the restaurant. They were stored for up to five days in a shared bucket with the ice they were shipped in, which the investigators said let clean and contaminated bundles mix.1213 No restaurant worker was the source.13

The CDC’s final count was 601 patients, at least 124 of them hospitalised, and three deaths. About 9,000 people were given immune globulin.1213 The Associated Press called it the biggest known outbreak of hepatitis A in U.S. history.14 The chain pulled green onions from every restaurant. Its sale did not happen.1415

There’s no definitive information that green onions played a role. However, we don’t know. Authorities are looking at them.

Bill Zavertnik, chief operating officer of Chi-Chi’s, Associated Press, Nov 15, 200314

Chapter 5 of 6

76

restaurant properties whose rights went to Outback Steakhouse

A textured orange web page with one line of text thanking customers of the past 27 years and saying Adios
The whole of chi-chis.com after the closing, from an Internet Archive capture of October 10, 2004.22

2004 · Adios

Outback buys the buildings

Chi-Chi’s spent 2004 in Chapter 11 settling claims from the outbreak through its insurers. By September about 150 of some 325 claims had been settled for $7M.20

On August 3, 2004 the bankruptcy court approved Outback Steakhouse as the winning bidder for the “designation rights” to 76 properties: the power to take each site for itself, pass it to someone else or hand it back. Outback paid $42.5M.18 It wanted the sites for its own restaurants. Its senior vice president told the Associated Press that the deal did not include the Chi-Chi’s brand, its restaurant operations or any recipes.20

The sale closed on September 20, 2004, and the restaurants stopped trading.1921 The chain’s website was replaced with one sentence on a stucco-coloured background.22 A recorded message on its guest-relations line said the chain was no longer in business.20

By the end of the year Outback had assigned its rights to 25 of the properties to a third party for $9.975M, told Chi-Chi’s to keep 15, and still held 35.19

We would like to thank all of our loyal customers of the past 27 years and with a tear in our eye, say ¡Adios!

chi-chis.com, as archived in October 200422

Chapter 6 of 6

1

Chi-Chi’s restaurant open in the United States in October 2026

News segment · 2025FOX 9: “Chi-Chi’s reopens in Minnesota after 20 years” The Minneapolis station’s report on the St. Louis Park opening, published on its own channel in 2025.44 The station’s written reports are among our sources.35 Watch on YouTube

2004 – 2026 · The name

A jar of salsa and one restaurant

The lawsuits outlasted the restaurants. By December 2005 the chain and its insurers had paid more than $40M, including $6.25M to a man who needed a liver transplant, and an $800,000 class settlement for people who had only needed shots: 4,931 of them received $162.23 each.2324

The name never left the supermarket. Hormel Foods sells Chi-Chi’s salsa, chips and tortillas, and since 2009 the brand has sat in MegaMex Foods, Hormel’s joint venture with Mexico’s Herdez Del Fuerte.2628 Abroad, franchised restaurants carried on. A Belgian operator had fifteen in Belgium and two in Germany in 2014, and two in Luxembourg closed in September 2019 when their franchise agreement ended.3940

In December 2024 Michael McDermott, Marno McDermott’s son, announced an agreement with Hormel, which owns the trademarks, to open restaurants under the name.2930 He raised money from the public through a crowdfunding campaign with a $250 minimum; it had brought in $2.4M shortly before the opening.3233 On October 6, 2025 a Chi-Chi’s opened at 1602 West End Boulevard in St. Louis Park, Minnesota, in the space of his Rojo Mexican Grill.3536 A second conversion, in Maple Grove, did not go ahead; that building was reported to be too small.37

When we checked on October 8, 2026 the restaurant’s website listed that one location.38

Chi-Chi’s is coming back stronger than ever.

Michael McDermott, press release quoted by Fox 9, Aug 19, 202534

Timeline

Fifty years, 36 moments

From half a bar in Richfield to one restaurant in St. Louis Park. Filter by thread.

All 36 events as a list
  1. 1975–76
    Corporate

    The first restaurant

    Marno McDermott opens Chi-Chi’s in half of Max McGee’s Left Guard bar in Richfield, Minnesota. Sources give 1975 or 1976.1242

  2. Oct1977
    Corporate

    Shelly Frank and Louisville

    Frank leaves Kentucky Fried Chicken to run the company for John Stephens & Co., which holds the franchise rights. Headquarters move to Louisville.1

  3. 1983
    Money

    Profit of $9.1M

    Company-owned restaurants have gone from one to 46 in two years, by a reference history’s account.2

  4. 1984
    Money

    Peak profit

    Net income reaches $16.7M, the highest the reference history records.2

  5. 1985
    Corporate

    42 openings in a year

    27 company-owned and 15 franchised restaurants open.2

  6. 1986
    Corporate

    Hal Smith takes over

    Frank retires. The chain has 200 restaurants and falling profits.2

  7. Apr1988
    Money

    Foodmaker buys the chain

    The owner of Jack in the Box pays about $235M.1215

  8. 1990
    Money

    Best year for sales

    Sales of $450M, as a reference history gives them.2

  9. Jun1992
    Corporate

    Smith quits

    He cites personal reasons. Two presidents follow within a year.2

  10. Oct1992
    Corporate

    Consul bought out of Chapter 11

    Chi-Chi’s pays $8.7M in cash for a major franchisee and keeps 22 of its 26 restaurants.211

  11. Jan 271994
    Money

    Family Restaurants Inc.

    Foodmaker contributes Chi-Chi’s to a new company owned with Apollo and Green Equity Investors. The price is about $270.0M including assumed debt.31146

  12. Q41994
    Money

    $144.78M written off

    All the goodwill recorded for the Chi-Chi’s merger is written off in its first year.3

  13. Apr1996
    Corporate

    A new president

    Roger Chamness joins as president of Chi-Chi’s.1

  14. 1996
    Money

    Sales fall 11.5%

    Comparable-restaurant sales drop 11.5%; the division’s EBITDA is a loss of $4.3M.4

  15. Q41998
    Corporate

    48 restaurants marked for divestment

    The parent records a provision of $22.9M. Twenty of the 48 are later kept because their leases cannot be ended.56

  16. 1999
    Corporate

    Prandium

    Family Restaurants renames itself Prandium Inc.2

  17. Jun 282000
    Corporate

    El Torito sold

    Chi-Chi’s becomes the parent’s largest remaining chain.6

  18. May 62002
    Bankruptcy & end

    Prandium files Chapter 11

    A pre-packaged plan for the parent and one subsidiary. It is confirmed on June 20 and takes effect on July 2. The operating subsidiaries, including Chi-Chi’s, are not part of it.7

  19. Dec 302002
    Corporate

    The chief executive resigns

    Kevin S. Relyea leaves. In February 2003 two members of the turnaround firm Alvarez & Marsal take over.7

  20. May 142003
    Money

    A $6.4M offer for the parent

    Investors sign a non-binding letter of intent to buy Prandium for $6.4M in cash plus contingent payments. The deal falls apart that summer.817

  21. Oct 3–62003
    The outbreak

    The exposure

    Most of the patrons who will fall ill eat at the Beaver Valley Mall restaurant in these four days.1213

  22. Oct 82003
    Bankruptcy & end

    Chi-Chi’s files Chapter 11

    Chi-Chi’s, Inc. and Koo Koo Roo file in Delaware. Chi-Chi’s has a letter of intent from a buyer.916

  23. Oct 312003
    Corporate

    Prandium deregisters

    The parent files a Form 15 and stops reporting to the SEC. It has about 264 stockholders of record.10

  24. Nov 32003
    The outbreak

    The advisory

    Pennsylvania’s health department issues an advisory and the restaurant closes.25

  25. Nov 142003
    The outbreak

    A third death

    At least 490 people are ill. The chain removes green onions from all its restaurants.14

  26. Nov 212003
    The outbreak

    The CDC names green onions

    A dispatch reports about 555 cases as of November 20 and traces the onions to Mexico.12

  27. Aug 32004
    Bankruptcy & end

    Outback wins the auction

    The bankruptcy court approves Outback Steakhouse as bidder for the designation rights to 76 properties, for $42.5M.18

  28. Sep 202004
    Bankruptcy & end

    The restaurants close

    The Outback deal closes and Chi-Chi’s ceases operations. Its website says “Adios.”192122

  29. Sep 12005
    The outbreak

    The final count

    The CDC’s investigators publish their study: 601 patients, three deaths, at least 124 hospitalised.13

  30. Sep2005
    The outbreak

    A $6.25M settlement

    A federal judge approves a settlement for a man who needed a liver transplant.24

  31. Dec2005
    The outbreak

    $162.23 each

    Cheques go out to 4,931 people who received shots, from an $800,000 class settlement. Total settlements pass $40M.23

  32. Oct 262009
    Afterlife

    MegaMex Foods

    Hormel and Herdez Del Fuerte close a 50/50 joint venture whose brands include Chi-Chi’s.26

  33. Sep 292019
    Afterlife

    Luxembourg closes

    The two Chi-Chi’s restaurants in Luxembourg close at the end of a franchise agreement. One had opened in 1989.39

  34. Dec2024
    Afterlife

    A licence for the founder’s son

    Michael McDermott announces an agreement with Hormel to open Chi-Chi’s restaurants.293031

  35. Oct 62025
    Afterlife

    St. Louis Park

    The first new Chi-Chi’s opens at 1602 West End Boulevard.3536

  36. Nov2025
    Afterlife

    No second conversion

    The Rojo Mexican Grill in Maple Grove closes without becoming a Chi-Chi’s; a different site is said to be planned.37

The money

Seven years of filings, one direction

Chi-Chi’s was a division of other companies after 1988, so its own accounts are thin. Its parent reported the division separately from 1996 to 2002, and those seven years are the core of this section. Earlier figures come from the chain’s own history page and a reference history, and are marked.

Restaurants: up in ten years, down in twenty

Restaurants in the system at the dates a source gives a count. The kinds of count differ; see the source line.

01002003001975–76c. 19811986Jan ’941996199820002002Sep ’04Oct ’2512345601002003001975–76198619962000Oct ’25123456
  1. c. 1981 · year five 92 company-owned and franchised restaurants, from four in the first full year.1
  2. Jan ’94 · the third owner 235 restaurants operated or franchised when Family Restaurants takes over.3
  3. 1996 · reported on its own 184 company-operated and 18 franchised or licensed at the end of 1996.4
  4. 2002 · the last annual report 128 company-operated and 8 franchised or licensed, all 8 of them abroad.7
  5. Sep ’04 · closed The U.S. restaurants cease operations on September 20, 2004.21
  6. Oct ’25 · one again A licensed restaurant opens in St. Louis Park, Minnesota.36
Data table
Restaurants: up in ten years, down in twenty
Date of the count (not evenly spaced)Restaurants
1975–761
c. 198192
1986200
Jan ’94235
1996202
1998177
2000153
2002136
Sep ’040
Oct ’251
1975–76: the first restaurant.12 92 in “year five”, which we place about 1981.1 200 by 1986, from a reference history.2 235 operated or franchised in January 1994.3 1996 to 2002: company-operated plus franchised and licensed at each year end (184+18, 165+12, 140+13, 128+8).457 Zero is the U.S. chain after September 20, 2004; licensed restaurants abroad stayed open and are not counted.2140

Chi-Chi’s sales, as its owners reported them

$ millions. The first bar is Foodmaker’s fiscal year to October 3, 1993 (53 weeks); 1994 and 1995 were not reported separately.

Data table
Chi-Chi’s sales, as its owners reported them
PeriodSales ($M)
FY1993$404.5M
1994n/a
1995n/a
1996$278.1M
1997$245.8M
1998$243.7M
1999$227.7M
2000$217.5M
2001$205.9M
2002$186.4M
FY1993: Foodmaker’s annual report, which consolidated Chi-Chi’s.11 1996 and 1997: Family Restaurants.4 1998 and 1999: Prandium.5 2000 to 2002: Prandium.67 Figures are rounded from thousands. Fiscal 2000 had 53 weeks.7 From 1996 to 2002 sales fell 33% (derived).

Sales at comparable restaurants

Change on the year before, in percent, as reported in each year’s filing.

Data table
Sales at comparable restaurants
PeriodComparable-restaurant sales (%)
1996-11.5%
1997-8.2%
19981.8%
1999-0.5%
2000-1.1%
2001-1.2%
2002-6.6%
Family Restaurants and Prandium annual reports.4567 In 2002 the fall was $13.1M on a comparable base.7

What the division earned before overheads above it

Chi-Chi’s divisional EBITDA, $ millions. It covers restaurant cash flow less the division’s own administration, before interest, depreciation and the parent’s costs.

Data table
What the division earned before overheads above it
PeriodDivisional EBITDA ($M)
1996$-4.3M
1997$0.0M
1998$1.4M
1999$5.9M
2000$0.6M
2001$4.8M
2002$9.2M
Family Restaurants and Prandium annual reports.4567 Exact figures in thousands: (4,278), 36, 1,426, 5,942, 557, 4,775 and 9,161. The 2002 figure is 4.9% of sales (derived). The filings’ definition excludes interest and depreciation, so this is not profit.

The 1994 deal, as the two sides described it

What Family Restaurants paid for Chi-Chi’s, $ millions.

$270M Purchase price, per Family Restaurants
$173M 64%Cash to Foodmaker$62M 23%Stake in Family Restaurants$35M 13%Chi-Chi’s debt assumed$173M 64%Cash to Foodmaker$62M 23%Stake in Family Restaurants$35M 13%Chi-Chi’s debt assumed
  • Cash to Foodmaker. “approximately $173 million”11
  • Stake in Family Restaurants. A 39% interest, valued at $62M11
  • Chi-Chi’s debt assumed. “approximately $35 million”11
Data table
The 1994 deal, as the two sides described it
Where it wentAmountShareNote
Cash to Foodmaker$173M64%“approximately $173 million”
Stake in Family Restaurants$62M23%A 39% interest, valued at $62M
Chi-Chi’s debt assumed$35M13%“approximately $35 million”
The total is Family Restaurants’ figure of about $270.0M, “including the assumption of capitalized lease and debt obligations.”46 The three parts are Foodmaker’s.11 That they add up to the total is our arithmetic (derived), and the two filings differ slightly on the cash; see the data notes. Foodmaker also received a warrant.

What Outback actually bought

The 76 properties in the designation-rights sale, by how Chi-Chi’s held them (shares derived).

  1. 30%Owned land and building23 properties
  2. 30%Ground leases23 properties
  3. 20%Sale-leasebacks with purchase options15 properties
  4. 20%Ordinary leases15 properties
Data table
What Outback actually bought
Kind of propertyShare of the 76
Owned land and building30%
Ground leases30%
Sale-leasebacks with purchase options20%
Ordinary leases20%
Outback Steakhouse, Form 8-K, September 3, 2004.18 Shares are derived and rounded to whole squares: 23 of 76 is 30.3% and 15 of 76 is 19.7%. The price works out to about $559,000 a property (derived: $42.5M ÷ 76).

Where the 76 properties stood at the end of 2004

Outback’s account of its designation rights three months after closing.

76 Properties in the sale
35 46%Still held by Outback25 33%Rights assigned to a third party15 20%Chi-Chi’s required to keep1 1%Excluded by Chi-Chi’s35 46%Still held by Outback25 33%Rights assigned to a third party15 20%Chi-Chi’s required to keep1 1%Excluded by Chi-Chi’s
  • Still held by Outback. 14 owned, 10 sale-leasebacks, 9 ground leases, 2 leases19
  • Rights assigned to a third party. For $9,975,000, October 200419
  • Chi-Chi’s required to keep. November 200419
  • Excluded by Chi-Chi’s. Outback was paid $1,100,00019
Data table
Where the 76 properties stood at the end of 2004
Where it wentAmountShareNote
Still held by Outback3546%14 owned, 10 sale-leasebacks, 9 ground leases, 2 leases
Rights assigned to a third party2533%For $9,975,000, October 2004
Chi-Chi’s required to keep1520%November 2004
Excluded by Chi-Chi’s11%Outback was paid $1,100,000
Outback Steakhouse, annual report for 2004.19

Fifteen people given shots for every one who fell ill

9,000people given immune globulin, approximately12
=
15 ×patients with hepatitis A13 (601; each icon is the 601 patients)

Derived 9,000 ÷ 601 ≈ 15.0. The 9,000 is the CDC’s approximate figure from November 2003; the 601 is its final count, published in 2005.1213

Data table
Fifteen people given shots for every one who fell ill
Value
people given immune globulin, approximately9,000
patients with hepatitis A601
Ratio15 (derived)

How the count grew

Cases attributed to the Beaver Valley Mall restaurant, by source and date.

Associated Press, Nov 14, 2003
at least 490
Three deaths14
CDC dispatch, as of Nov 20, 2003
about 555
Three deaths12
CDC investigators, published Sep 2005
601
Three deaths; at least 124 hospitalised13
Press reports, 2004 and 2005
660
Four deaths2023
Data table
How the count grew
SourceCasesNote
Associated Press, Nov 14, 2003at least 490Three deaths
CDC dispatch, as of Nov 20, 2003about 555Three deaths
CDC investigators, published Sep 2005601Three deaths; at least 124 hospitalised
Press reports, 2004 and 2005660Four deaths
Associated Press1420, CDC1213 and the Pittsburgh Tribune-Review.23 We use the CDC’s published count and note the press figure; see “Conflicts between sources.”

The bill for the outbreak

$40M+
paid by the chain and its insurers to settle cases by December 200523
$6.25M
the largest settlement we found, for a man who needed a liver transplant24
$162.23
to each of 4,931 people who had received shots, from an $800,000 class settlement23
$55M
that Chi-Chi’s sought from suppliers, saying the outbreak ended a planned sale of the chain23
Pittsburgh Tribune-Review, December 21, 200523 and the Associated Press.24 About 550 lawsuits were filed.23 4,931 × $162.23 is $799,956 (derived).
A Chi-Chi’s restaurant, from the filings
5,000–10,600square feet of floor space in a typical restaurant37
200–400guests seated in the restaurant and lounge37
$7.62average check in 19974
$11.51average food check in 20027
Family Restaurants and Prandium annual reports.347 The filings label the measure “average check” in 1997 and “average food check” in 2002, so the two may not be like for like.
A bright yellow and red stucco restaurant with a tile roof and an Asian King Buffet sign
2012 A building identified by its photographer as a former Chi-Chi’s, trading as a buffet in November 2012. The colours are heavily processed in the original.Photo: Corey Coyle, via Wikimedia Commons, CC BY 3.0.

Part 3 of 6

Brand

Commercials & footage · Old website · Brand gallery

Commercials & footage

Margaritas on television, then the evening news

Five commercials as collectors have preserved them, one local news report from the first week of the outbreak and one from the reopening. Airing years of the commercials come from the uploaders and we could not confirm them.

Commercial · 1985A Chi-Chi’s commercial dated 1985 Uploaded by deputay and dated 1985 by the uploader.44 A reference history says 42 restaurants opened that year.2 Watch on YouTube
Commercial · 1987A fajita commercial dated 1987 Uploaded by augustv123, who dates it to 1987, the year before Foodmaker bought the chain.442 Watch on YouTube
Commercial · 1991A Chi-Chi’s commercial dated 1991 Uploaded by Betamax King and dated 1991 by the uploader, in the Foodmaker years.44 Watch on YouTube
Commercial · 1996A “20th anniversary” commercial dated 1996 Uploaded by Captain Mr. Oracle, whose title dates it to 1996 and calls it a 20th-anniversary spot.44 If that is right, the chain was counting from 1976, the year its own website gave for the first restaurant.1 Watch on YouTube
Commercial · 1991Chi-Chi’s salsa, the grocery product A commercial for the jarred salsa, uploaded by vintagecommercial and dated 1991 by the uploader.44 The grocery line is the part of the brand that never closed.28 Watch on YouTube
News segment · 2003KDKA: “Chi Chi’s Hepatitis Crisis” A two-minute Pittsburgh television report, uploaded by the channel Dr. Audrey Guskey and dated November 4, 2003 in the upload’s title, the day after the state’s advisory.4425 We could not confirm the air date independently. Watch on YouTube
News segment · 2025FOX 9: “Chi-Chi’s reopens in Minnesota after 20 years” The Minneapolis station’s report on the St. Louis Park opening, published on its own channel in 2025.44 The station’s written reports are among our sources.35 Watch on YouTube

Videos are embedded from the services that host them and load only when you press play. YouTube embeds use youtube-nocookie.com. Each video belongs to its uploader or rights holder and is shown here for commentary; we do not host any of the files. We found no embeddable footage of the September 2004 closings.

Old website

chi-chis.com, 1998 to 2004

Three Internet Archive captures of the chain’s own site: its account of its history, its home page under Koo Koo Roo Enterprises, and the page that replaced everything in September 2004.

Screenshot of http://www.chi-chis.com/history.htm as archived May 9, 1998

Captured May 9, 1998

“Chi-Chi’s History”

The company’s own version: a corner of a Minneapolis bar, a first-year forecast of $400,000 and sales of $2M, 92 restaurants by year five.1

Open this capture on the Wayback Machine

Text preserved in the archived pages

Chi-Chi’s origin is as remarkable as its success. It started in one corner of a Minneapolis bar (now known as the Richfield Chi-Chi’s)
History page, captured May 1998
Life always needs a little Salsa
Home page, captured April 1999

Part 4 of 6

People

People · Press

The people

Founders, operators and the lawyers

Titles are as given in the sources. Later careers are left out where we have no source.

People (14)
Name and roleWhat they didAfterwards
Marno McDermottFounder

A University of Minnesota graduate who discovered Mexican food in California, built Zapata Foods and sold it to Heublein for $4M, then opened Chi-Chi’s as a sit-down version.1

His son Michael revived the name in 2025.29
Max McGeeCo-founder

A former Green Bay Packers wide receiver who owned the Left Guard bar and restaurant. Half of it became the first Chi-Chi’s.142

John StephensStockbroker and franchisor

A Minneapolis stockbroker who bought the rights to operate and franchise Chi-Chi’s through his publicly traded company.1

Shelly FrankPresident and chief executive, 1977–1986

Negotiated Heublein’s purchase of Zapata, then worked on new concepts at Kentucky Fried Chicken. He joined at 33 and moved the headquarters to Louisville.1

Retired in 1986, by a reference history’s account.2
Hal SmithChief executive, 1986–1992

Came from Chili’s. He cut corporate staff, shortened managers’ hours and stayed on under Foodmaker until he quit in June 1992.2

Joe MicatrottoPresident after 1992

A long-time Chi-Chi’s employee who became president when Smith’s successor moved on after six months, and who went on to lead Family Restaurants.2

Kevin S. RelyeaChairman and chief executive of Prandium

Ran the parent through its 2002 Chapter 11 and resigned all his positions on December 30, 2002.27

Hugh G. HiltonChief executive of Prandium from Feb 2003

A member of the turnaround firm Alvarez & Marsal, appointed interim chief executive. He signed the filing that reported Chi-Chi’s Chapter 11.79

Bill ZavertnikChief operating officer of Chi-Chi’s, 2003

The company’s voice in the first weeks of the outbreak. He announced that green onions had been removed from every kitchen before the cause was confirmed.14

Jack UtsickWould-be buyer

An entertainment promoter whose company Worldwide Entertainment was majority owner of the entity that signed a letter of intent for Chi-Chi’s in October 2003.915

William MarlerPlaintiffs’ lawyer

A Seattle lawyer who represented about a third of the claimants and handled the class action for people who received shots.2023

Joseph KadowSenior vice president, Outback Steakhouse

Explained the purchase: Outback wanted locations, and took no brand, operations or recipes.20

Francis LeroyLicensee for Europe

A Belgian operator who held the Chi-Chi’s rights for Europe, North Africa and Asia in 2014 and spoke of 400 restaurants in Europe.40

Michael McDermottFounder of Chi-Chi’s Restaurants LLC

The founder’s son, with a career at Kona Grill and Rojo Mexican Grill. He announced the agreement with Hormel in 2024 and opened the St. Louis Park restaurant in 2025.3036

The clippings

What they said at the time

Press (11)
We would like to thank all of our loyal customers of the past 27 years and with a tear in our eye, say ¡Adios!
chi-chis.com, as archived in October 200422
However, the outbreak at Restaurant A was unusually large.
Centers for Disease Control and Prevention, MMWR, Nov 200312

  1. Jack Butorac, former Chi-Chi’s vice president, The Courier-Journal, Nov 30, 200315

    It took Mexican food and really put in full-service quality with fast-food pricing.

  2. Jack Butorac, on Foodmaker’s management, The Courier-Journal, Nov 30, 2003. His figure; we could not check it15

    In two years they lost 55 percent of their sales doing menu changes. It was a huge strategic error.

  3. William G. Knuff III, Prandium director, Orange County Business Journal, Nov 9, 200317

    The question we have to ask ourselves now is do we have enough time and resources to see this company through its darkest hour.

  4. Barbara Barrickman, shopper at the Beaver Valley Mall, Associated Press, Nov 15, 200314

    I won’t go to Chi-Chi’s again.

  5. Ron Paul, president of Technomic, The Courier-Journal, Nov 30, 200315

    It’s going to be a tough sell.

  6. Joseph Kadow, Outback Steakhouse, Associated Press, Sep 200420

    We felt it was a good opportunity to acquire a large number of good locations that we can use for our brands.

  7. William Marler, plaintiffs’ lawyer, Pittsburgh Tribune-Review, Dec 21, 200523

    I think Chi-Chi’s and their insurance companies have done a remarkable job at getting this done.

  8. Tracy Polovina, who ate at the restaurant and received a shot, Pittsburgh Tribune-Review, Dec 21, 200523

    It wasn’t their fault.

  9. Michael McDermott, statement quoted by Nation’s Restaurant News, Dec 4, 202430

    I still have fond memories of growing up in the Chi-Chi’s restaurants that my father built throughout their time, instilling in me the passion and determination to pursue my own career in the restaurant industry.
A stucco mall entrance with a red tile awning and the faint outline of removed letters
2013 A former Chi-Chi’s at the closed Parkway Center Mall, June 2013. The outline of the removed sign is still on the wall.Photo: Nicholas Eckhart from Elyria, Ohio, United States of America, via Wikimedia Commons, CC BY 2.0.

Part 5 of 6

Verdict

Cause of death · What if · Afterlife

Cause of death

The autopsy

Tap a cause to see the evidence. The percentages are our editorial weighting. The evidence under each one is sourced.

Cause of death, by editorial weight

One square is one percentage point. The weights are our judgment, not a measurement.

  1. 30%Three owners, each using debt
  2. 25%Ten years of falling sales
  3. 20%The hepatitis A outbreak
  4. 15%Expansion in the 1980s
  5. 10%A parent with other problems
Data table
Cause of death, by editorial weight
CauseWeight
Three owners, each using debt30%
Ten years of falling sales25%
The hepatitis A outbreak20%
Expansion in the 1980s15%
A parent with other problems10%

Foodmaker paid about $235M in 1988 and, by a former executive’s account, borrowed against Chi-Chi’s real estate to do it. The 1994 deal was financed with $450M of notes and wrote off $144.78M of Chi-Chi’s goodwill within the year. The parent filed its own Chapter 11 in 2002, warned of going-concern doubt nine months later, and Chi-Chi’s listed more than $100M of debts when it filed.37151646

Comparable-restaurant sales fell in six of the seven years from 1996 to 2002, by 11.5% and 8.2% at the start and 6.6% at the end. Division sales dropped from $278.1M to $186.4M. A reference history describes guest counts already falling in 1992 as Taco Bell and casual-dining chains took customers.2457

601 people were infected and three died after eating at one restaurant. The chain said sales were damaged systemwide, a consultant called it “a tough sell,” the planned sale did not close, and more than $40M went to settlements. It came four weeks after the Chapter 11 filing, so it cannot be the cause of the insolvency. It is the reason there was no buyer for the business as a going concern.9131523

The chain opened 42 restaurants in 1985 alone. A reference history lists the results: restaurants of 10,000 to 12,000 square feet that were too big to run profitably, clustered sites that cut each other’s sales, failures in New York and New England, and a $20M write-off for 21 closures by 1988.2

From 1994 Chi-Chi’s shared an owner with El Torito, then Koo Koo Roo and Hamburger Hamlet. A 1996 restructuring cut two-thirds of the jobs at its Louisville office. The parent bought and sold whole divisions, changed its name, lost its chief executive at the end of 2002 and its finance chief in August 2003, and was run by a turnaround firm when Chi-Chi’s filed.671517

Editorial judgment: the weights are an interpretive model by the Spectre Brands editors, not a measured quantity. The filings show what happened to sales and debt, and the CDC shows what happened in Monaca. How far the outbreak shortened the chain’s life is a matter of opinion: the company itself argued in court that it destroyed a sale.

The fork in the road

What if…

Three points where the story could have gone differently. The “What if” panels are speculation, labeled as such.

What happened

Chi-Chi’s filed for Chapter 11 on October 8, 2003 with a non-binding letter of intent from a buyer. The outbreak became public on November 3. The sale never closed, and the chain later sought $55M from suppliers for the lost deal.9152325

What if speculative

A sale might have closed and some restaurants might have traded on under a new owner. The same sources give reasons to doubt it: the letter of intent was non-binding, a former executive understood the deal to be off before the outbreak, and comparable sales had just fallen 6.6% in a year.715 A smaller Chi-Chi’s under an entertainment promoter is the optimistic case.

What happened

Foodmaker put Chi-Chi’s into Family Restaurants in January 1994 in a deal financed with $450M of notes. The $144.78M of goodwill attached to Chi-Chi’s was written off that year, and comparable sales fell 11.5% in 1996.3446

What if speculative

Kept inside Foodmaker, Chi-Chi’s would have had one owner and less debt directly above it. But Foodmaker was dealing with its own food-safety crisis at Jack in the Box in 1993, and guest counts at Chi-Chi’s were already falling, according to a reference history.211 A different owner would not have changed what customers were choosing instead.

What happened

In late 1998 the parent marked 48 Chi-Chi’s restaurants for divestment, then kept 20 of them because it could not get out of the leases. Company-operated restaurants drifted down from 184 in 1996 to 128 in 2002.467

What if speculative

A faster cut to the best hundred restaurants in the mid-1990s might have left a profitable regional chain; the division’s EBITDA did improve as weak sites closed, to $9.2M in 2002.7 The leases are the obstacle the filings name, and the money to buy them out would have had to come from a parent that had none to spare.

Where are they now

The afterlife

Chi-Chi’s

  1. The grocery brand

    On shelves

    Chi-Chi’s salsas, dips, tortillas and chips are sold by Hormel Foods, whose 2025 annual report lists the name among its significant owned or licensed trademarks. The brand has been part of MegaMex Foods, Hormel’s joint venture with Herdez Del Fuerte, since 2009.262728

  2. One restaurant in Minnesota

    Open

    Chi-Chi’s Restaurants LLC, formed by Michael McDermott under licence from Hormel, opened at 1602 West End Boulevard, St. Louis Park on October 6, 2025. Its website listed that single location on October 8, 2026.303638

  3. The second restaurant

    Stalled

    McDermott said two restaurants would open in Minnesota in 2025. The Maple Grove site he named closed in November 2025 without converting; a local report said a Chi-Chi’s would open at a different location “yet to be determined.” We found no announcement of one.293237

  4. The buildings

    Converted

    Outback Steakhouse bought the rights to 76 properties to turn into its own brands or sell on. By the end of 2004 it still held 35.1920 The Beaver Valley Mall restaurant became a Three Amigos.23 Other buildings have had other tenants, such as the buffet in our gallery.43

  5. The company

    Liquidated

    Chi-Chi’s, Inc. was liquidated in its Chapter 11 case. Its parent, Prandium, stopped reporting to the SEC on October 31, 2003.1023 What creditors finally received is not in our sources.

  6. The lawsuits

    Settled

    About 550 suits were filed. By December 2005 more than $40M had been paid and fewer than ten cases were outstanding, according to the plaintiffs’ lawyer who handled the class action.23

  7. The restaurants abroad

    Mostly gone

    The parent counted eight franchised or licensed Chi-Chi’s abroad at the end of 2002.7 A Belgian operator had fifteen in Belgium and two in Germany in 2014; the two in Luxembourg closed in 2019.3940 A 2022 magazine article, later updated, says the Belgian restaurants closed in 2022 and the last one, in Vienna, in 2024. We could not confirm that from a primary source, so treat it as unverified.41

  8. The finding

    Documented

    The CDC’s investigators concluded that green onions contaminated before they arrived caused the outbreak, and that putting them in large batches of salsa served to every customer contributed to its size. Their first report said the onions were likely contaminated in the distribution system or during growing, harvest, packing or cooling.1213

Who owned the name

Two founders, a stockbroker’s public company, three leveraged owners, a bankruptcy court and a food company.

  1. 1975–76

    Marno McDermott and Max McGee

    Open the first restaurant in half of McGee’s bar in Richfield, Minnesota.142

  2. 1977

    John Stephens & Co., later Chi-Chi’s Inc.

    A publicly traded company holds the rights to operate and franchise. Shelly Frank runs it from Louisville.1

  3. Apr 1988

    Foodmaker Inc.

    The owner of Jack in the Box buys the company.12

    about $235M
  4. Jan 1994

    Family Restaurants Inc.

    Owned by Apollo, Foodmaker and Green Equity Investors. Renamed Prandium in 1999.2346

    about $270.0M
  5. Oct 2003

    Chi-Chi’s, Inc., in Chapter 11

    Files in Delaware with 128 restaurants.916

  6. Sep 2004

    Outback Steakhouse (the sites only)

    Buys designation rights to 76 properties. The brand and recipes are not included.1820

    $42.5M
  7. By 2009

    Hormel Foods

    Sells Chi-Chi’s grocery products and, by 2024, is described as the owner of the trademarks. How and when the restaurant marks reached Hormel is not in our sources.2629

  8. Dec 2024

    Hormel Foods, licensed to Chi-Chi’s Restaurants LLC

    A long-term licence lets Michael McDermott use the name and logo on restaurants.3031

Data table
Who owned the name
WhenOwnerWhat happenedPrice
1975–76Marno McDermott and Max McGeeOpen the first restaurant in half of McGee’s bar in Richfield, Minnesota.
1977John Stephens & Co., later Chi-Chi’s Inc.A publicly traded company holds the rights to operate and franchise. Shelly Frank runs it from Louisville.
Apr 1988Foodmaker Inc.The owner of Jack in the Box buys the company.about $235M
Jan 1994Family Restaurants Inc.Owned by Apollo, Foodmaker and Green Equity Investors. Renamed Prandium in 1999.about $270.0M
Oct 2003Chi-Chi’s, Inc., in Chapter 11Files in Delaware with 128 restaurants.
Sep 2004Outback Steakhouse (the sites only)Buys designation rights to 76 properties. The brand and recipes are not included.$42.5M
By 2009Hormel FoodsSells Chi-Chi’s grocery products and, by 2024, is described as the owner of the trademarks. How and when the restaurant marks reached Hormel is not in our sources.
Dec 2024Hormel Foods, licensed to Chi-Chi’s Restaurants LLCA long-term licence lets Michael McDermott use the name and logo on restaurants.
Chi-Chi’s own history page1, a reference history2, SEC filings of Family Restaurants, Prandium, Outback and Hormel391826, the Associated Press20 and trade and local press.293031 A secondary source dates Hormel’s rights to the name on grocery products to 1987; we could not confirm the year.41

Sources & data notes

Show your work

Chi-Chi’s was a subsidiary for its last sixteen years, so the primary sources are the SEC filings of its owners and of the company that bought its real estate, and the CDC’s two reports on the outbreak. Its years as a public company, 1977 to 1988, predate EDGAR; for those we rely on the chain’s own history page and a reference history, and say so.

  1. Chi-Chi’s Inc., “Chi-Chi’s History”, chi-chis.com, as captured by the Internet Archive on May 9, 1998.
  2. “History of Chi-Chi’s Inc.”, FundingUniverse, reproducing the International Directory of Company Histories, vol. 51 (2003). A reference history.
  3. Family Restaurants, Inc., Form 10-K for the year ended Dec 31, 1995, filed Apr 1, 1996 (SEC EDGAR).
  4. Family Restaurants, Inc., Form 10-K for the year ended Dec 28, 1997, filed Mar 30, 1998 (SEC EDGAR).
  5. Prandium, Inc., Form 10-K for the year ended Dec 26, 1999, filed Mar 29, 2000 (SEC EDGAR).
  6. Prandium, Inc., Form 10-K for the year ended Dec 30, 2001, filed Apr 1, 2002 (SEC EDGAR).
  7. Prandium, Inc., Form 10-K for the year ended Dec 29, 2002, filed Mar 31, 2003 (SEC EDGAR).
  8. Prandium, Inc., Form 10-Q for the quarter ended Jun 29, 2003, filed Aug 13, 2003 (SEC EDGAR).
  9. Prandium, Inc., Form 8-K, event of Oct 8, 2003, filed Oct 9, 2003 (SEC EDGAR).
  10. Prandium, Inc., Form 8-K, event of Oct 31, 2003, filed Oct 31, 2003 (SEC EDGAR).
  11. Foodmaker, Inc., Form 10-K for the year ended Oct 2, 1994 (SEC EDGAR).
  12. Centers for Disease Control and Prevention, “Hepatitis A Outbreak Associated with Green Onions at a Restaurant: Monaca, Pennsylvania, 2003”, Morbidity and Mortality Weekly Report, posted Nov 21, 2003 (Internet Archive copy of cdc.gov). The report calls the restaurant “Restaurant A.”
  13. C. Wheeler and others, “An outbreak of hepatitis A associated with green onions”, New England Journal of Medicine 353(9):890–897, Sep 1, 2005. Abstract, as indexed by PubMed.
  14. Charles Sheehan, The Associated Press, “3 dead, 490 sickened in hepatitis A outbreak”, Lawrence Journal-World, Nov 15, 2003.
  15. David Goetz, “Chi-Chi’s becomes tougher sell”, The Courier-Journal (Louisville), Nov 30, 2003, as reproduced on the website of the law firm Marler Clark.
  16. “Chi Chi’s restaurant chain files Chap. 11 bankruptcy”, wire and staff reports, The Vindicator (Youngstown), Oct 12, 2003.
  17. Andy Fixmer, “Prandium Struggles as Sale Falls Through, Debt Burdens”, Orange County Business Journal, Nov 9, 2003.
  18. Outback Steakhouse, Inc., Form 8-K, event of Aug 30, 2004, dated Sep 3, 2004 (SEC EDGAR).
  19. Outback Steakhouse, Inc., Form 10-K for the year ended Dec 31, 2004 (SEC EDGAR).
  20. Bruce Schreiner, The Associated Press, “Outback Steakhouse closes on acquisition of Chi-Chi’s restaurants”, September 2004, as reproduced on Marler Clark’s Hepatitis Blog on Sep 23, 2004.
  21. Sopaporn Saeung, “Chi-Chi’s restaurant closes doors after 27 years”, Indiana Daily Student, Oct 14, 2004.
  22. Chi-Chi’s Inc., closing message, chi-chis.com, as captured by the Internet Archive on Oct 10, 2004.
  23. Jason Cato, “Chi-Chi’s checks to arrive soon”, Pittsburgh Tribune-Review, Dec 21, 2005, as reproduced on the website of Marler Clark.
  24. The Associated Press, “Hepatitis victim settles Chi-Chi’s lawsuit”, NBC News, Sep 30, 2005.
  25. Matt Simmons, “On this day: November 3, 2003, Chi-Chi’s restaurant in Monaca linked to hepatitis A outbreak”, WPXI, Nov 3, 2020. A retrospective.
  26. Hormel Foods Corporation, “Hormel Foods and Herdez Del Fuerte Announce Close of MegaMex Foods Agreement”, press release of Oct 26, 2009, filed as an exhibit to Form 8-K (SEC EDGAR).
  27. Hormel Foods Corporation, Form 10-K for the year ended Oct 26, 2025, filed Dec 5, 2025 (SEC EDGAR).
  28. chichis.com, the Chi-Chi’s grocery brand’s website, © 2026 Hormel Foods, LLC, read on Oct 8, 2026.
  29. “Chi-Chi’s restaurant chain returning in 2025, first stores opening in Minnesota”, FOX 9 Minneapolis-St. Paul, Dec 4, 2024.
  30. Alicia Kelso, “Chi-Chi’s is plotting a comeback next year”, Nation’s Restaurant News, Dec 4, 2024.
  31. “Snell & Wilmer Secures Long-Term Licensing Agreement to Help Relaunch Chi-Chi’s Restaurant Chain”, Snell & Wilmer, Dec 11, 2024. A law firm’s announcement.
  32. “Chi-Chi’s opening its first Minnesota restaurant this year”, FOX 9 Minneapolis-St. Paul, Feb 25, 2025.
  33. “Chi-Chi’s is ready to open its first restaurant in 20 years”, Restaurant Business, 2025 (published before the Oct 6 opening; we did not record the day).
  34. “Chi-Chi’s restaurant in St. Louis Park to begin construction”, FOX 9 Minneapolis-St. Paul, Aug 19, 2025.
  35. Howard Thompson, “When will Chi-Chi’s open? Owner sets opening date for St. Louis Park restaurant”, FOX 9 Minneapolis-St. Paul, Sep 30, 2025.
  36. “CHI-CHI’s opens first restaurant following brand relaunch”, The Forum of Fargo-Moorhead (InForum), Oct 6, 2025.
  37. Corey Bork, “Rojo Mexican Grill in Maple Grove Closes, Chi-Chi’s To Open at Different Location”, CCX Media, Nov 11, 2025.
  38. Chi-Chi’s, St. Louis Park, the restaurant’s website, read on Oct 8, 2026.
  39. “Chi-Chi’s to close on 29 September”, Delano (Paperjam, Luxembourg), Sep 24, 2019.
  40. Johan Van Geyte, “Chi-Chi’s plans large European expansion”, RetailDetail, May 12, 2014.
  41. “What Happened To Chi-Chi’s Restaurants?”, The Takeout, first published Oct 12, 2022 and since updated. A secondary account.
  42. “Chi-Chi’s Mexican Restaurante”, Greetings from Sioux Falls, a local-history website. A secondary account citing the Minneapolis Star of 1977.
  43. Wikimedia Commons: “Chi-Chi’s in Brussels - Sarah Stierch.jpg”, photograph by Sarah Stierch, Aug 9, 2011, CC BY 4.0; “Chi-Chi’s at Parkway Center Mall (15061585908).jpg”, photograph by Nicholas Eckhart, Jun 28, 2013, CC BY 2.0; “Asian King Buffet Former Chi Chi’s - panoramio.jpg”, photograph by Corey Coyle, Nov 18, 2012, CC BY 3.0.
  44. YouTube uploads, with the uploaders’ own titles and dates: deputay, augustv123, Betamax King, Captain Mr. Oracle, vintagecommercial, Dr. Audrey Guskey and FOX 9 Minneapolis-St. Paul.
  45. Chi-Chi’s Inc., home page, chi-chis.com, as captured by the Internet Archive on Apr 22, 1999.
  46. Family Restaurants, Inc., Form 10-K for the year ended Dec 25, 1994, filed Mar 27, 1995 (SEC EDGAR).
Data notes (8)

Data notes

Derived: Sales fell 33% from 1996 to 2002: 1 − $186.4M ÷ $278.1M.47 $450M of notes is $300.0M of senior notes plus $150.0M principal of discount notes; the discount notes raised $109.0M.46 $173M + $62M + $35M = $270M, which matches Family Restaurants’ stated price of about $270.0M; the pairing of the two filings is ours.1146 2002 divisional EBITDA of $9,161,000 is 4.9% of sales of $186,400,000.7 The waffle shares are 23 ÷ 76 and 15 ÷ 76, and $42.5M ÷ 76 ≈ $559,000.18 35 + 25 + 15 + 1 = 76.19 9,000 ÷ 601 ≈ 15.0.1213 4,931 × $162.23 = $799,956.23 Twenty-six days is October 8 to November 3, 2003.925 “Six of the seven years” counts the comparable-sales figures for 1996 to 2002.457 That Chi-Chi’s was Prandium’s largest chain after 2000 is from its 2001 sales of $205.9M out of $289.9M.6 The timeline’s “fifty years” is 1975–76 to 2025.

The homepage sparkline: The card’s series (1, 92, 200, 235, 202, 177, 153, 136, 76, 0, 1) mixes kinds of count: the company’s own figure for year five1, a reference history’s 200 for 19862, 235 operated or franchised in January 19943, company-operated plus franchised and licensed at the end of 1996, 1998, 2000 and 2002457, the 76 properties in the Outback sale, which is a transaction and not a census of open restaurants18, zero after the closing21 and the one licensed restaurant open since 2025.36

Conflicts between sources: The founding year. A reference history and the revived company say 1975; the chain’s own history page said the original restaurant was created in 1976, a local-history site says it opened in 1976, a 2025 local report says the founder started it in 1976, and the closing message thanked customers “of the past 27 years,” which counts from 1977.1222373842 We head the page 1975 and say so here. The place. The company’s page calls it a Minneapolis bar “now known as the Richfield Chi-Chi’s”; the reference history says “downtown.”12 The name. The company said it was the nickname of McDermott’s wife. A local-history site reports that McDermott told the Minneapolis Star in 1977 it was Spanish slang; we did not read that article, so that is unverified.142 The outbreak. The CDC’s first report gives about 555 cases and three deaths as of November 20, 2003, and its final study 601 patients and three deaths. Press reports from 2004 onward give 660 ill and four dead; we could not find the basis for the higher figures and use the CDC’s.12132023 Restaurants in late 2003. 128 in 20 states in a wire report of the filing; “all its 100 locations” in the AP a month later; and plans to close 11 more in a business journal.141617 The 1988 sale. $235M in two secondary sources; we did not find a contemporary report or filing. The reference history gives 129 company-operated and 77 franchised restaurants at the sale, and a newspaper “more than 230” at the peak.215 The 1994 deal. Family Restaurants says Foodmaker received $205.0M in cash less assumed leases and debt; Foodmaker says $208M less about $35M of debt, or about $173M. Family Restaurants says Chi-Chi’s operated or franchised 235 restaurants; the reference history says 237. A newspaper dates the deal to 1993, when it was agreed.231115 Profits in the 1980s. The reference history gives peak 1984 net income as $16.7M in one paragraph and $15.6M in another.2 Hormel. A magazine says Hormel “bought the rights” to the brand in the United States in 1987; Hormel’s own filings list the trademark among those “owned or licensed.”2741

Secondary and retrospective: Everything before 1994 rests on the chain’s own history page and a reference history, not on filings: first-year sales, the 92 restaurants, 1980s profits, Hal Smith’s changes, the Foodmaker price and the 1990 and 1992 sales figures.12 The Courier-Journal, Tribune-Review and 2004 Associated Press articles were read as reproduced on a plaintiffs’ law firm’s websites, not on the newspapers’ own.152023 The date of Pennsylvania’s advisory comes from a 2020 television retrospective.25 The status of restaurants in Belgium and Vienna comes from one magazine article and is unverified.41 Jack Butorac’s statement that Foodmaker lost 55 percent of sales in two years is his own and is contradicted in direction, if not in detail, by the reference history, which has sales rising to 1990.215

Unknown: Chi-Chi’s own profit or loss for any year after 1988. Division sales for 1994 and 1995. How many restaurants were open on the last day. What creditors of Chi-Chi’s, Inc. recovered and when the case closed. Whether Chi-Chi’s recovered anything from its suppliers. What became of the buyer’s October 2003 letter of intent, beyond the fact that no sale closed. How and when the restaurant trademarks passed to Hormel. The terms of the 2024 licence. Whether any Chi-Chi’s restaurant operates outside the United States today.

How we read the sources: SEC filings were downloaded from EDGAR as full-text submissions and searched; the figures in the charts were read from the “Selected Operating Data” tables.4567 The CDC report would not load from cdc.gov and was read in an Internet Archive copy.12 The New England Journal of Medicine study was read as its abstract only, retrieved through the National Library of Medicine’s interface; the PubMed page itself did not load for us.13 The chain’s own pages were read in Internet Archive captures.12245 Newspaper and trade articles were loaded directly and read in full, except that the NBC News page showed only its opening paragraph and a photo caption.24 We could not load the Star Tribune, The New York Times or the Pittsburgh Post-Gazette, and cite none of them. The two live websites were read on October 8, 2026.2838

Images: Three photographs are from Wikimedia Commons under the licences stated.43 The building in the third is identified as a former Chi-Chi’s only by its photographer’s title. Website images are cropped from Internet Archive captures.12245 We did not use the chain’s logo, and the drawings avoid it. Embedded commercials are shown as they aired and include it. The accent red was matched by eye to the signs in the 2011 photograph.

General knowledge: That Jack in the Box is a fast-food chain and that Taco Bell is a Mexican-style fast-food chain. That Monaca is in Beaver County, north-west of Pittsburgh (also stated in several sources above).

More post-mortems

Howard Johnson’s

1925 – 2022

Ghost
Strategy and management
1,040 to 0 restaurants, 1979 to 2022

Burger Chef

1958 – 1982

Dead
Overexpansion
$83M loss disclosed in 1972, on a $16M purchase

Sambo’s

1957 – 1984

Dead
Strategy and management
447 restaurants closed in under three weeks, November 1981

Browse all 38