BREAKING: Iconic Restaurant Chain Is Making a Comeback 20 Years After Bankruptcy
Chi-Chi’s reopens its first store — regional expansion and national franchising plans underway

It’s official: Chi-Chi’s is back.

More than two decades after its dramatic collapse, the once-beloved Mexican-style restaurant chain is relaunching itself, promising to revive nostalgic flavors while adapting for a new generation of diners. With its first new store already open and plans for regional expansion and nationwide franchising in motion, the Chi-Chi’s comeback could turn into one of the most ambitious restaurant revivals in recent memory.

A Brand Frozen in Time — Until Now

Chi-Chi’s first won hearts in 1975, when restaurateur Marno McDermott (nicknamed “Chi Chi” by his wife) opened the original location in Richfield, Minnesota, in partnership with former Green Bay Packers player Max McGee. Over the late 1970s and through the 1980s, the chain expanded aggressively. At its height in the early 1990s, Chi-Chi’s operated over 200 locations across the United States.

But a string of ownership changes, rising competition, financial strain, and a public health crisis all conspired to pull the chain under. In 2003, Chi-Chi’s suffered a catastrophic hepatitis A outbreak, traced to contaminated green onions served at a restaurant in Monaca, Pennsylvania. Over 650 people fell ill, and four died.  The legal and reputational fallout was swift and severe. The chain filed for Chapter 11 bankruptcy protection in October 2003, and by September 2004 it had shuttered all its restaurants.

Even though the physical restaurants vanished, the Chi-Chi’s brand endured. In 1987, Hormel Foods had acquired rights to market Chi-Chi’s branded salsas, dips, chips, and other grocery products, which continued to sell in supermarkets nationwide.  So while diners lost the restaurants, the name never fully left American households.

Fast forward to late 2024: after years of speculation and behind-the-scenes negotiation, the next chapter in the Chi-Chi’s saga began.

The New Beginning: Opening Day & Revival Strategy

On October 6, 2025, Chi-Chi’s reopened its first new U.S. restaurant in St. Louis Park, Minnesota, just outside Minneapolis.  The timing is loaded with symbolism — this is the home turf where Chi-Chi’s first broke ground, and where it once had a deep fan following.

This revival is being spearheaded by Michael McDermott, son of co-founder Marno McDermott, who has struck a licensing agreement with Hormel to use the Chi-Chi’s name for restaurant operations. McDermott is no stranger to the restaurant world — he has founded and run other concepts, such as Rojo Mexican Grill and Kona Grill.

According to Nation’s Restaurant News, the relaunched Chi-Chi’s will be a modernized version of its former self — combining fan favorites with fresh menu additions, an upgraded bar program, and design tweaks to align with contemporary dining expectations. Press materials emphasize the balance between nostalgia and innovation.

The rollout is not just symbolic. The business plan, as revealed in public commentary and trade reporting, centers on:

Regional expansion first, building momentum in select states before scaling

Franchising opportunities to help scale quickly and distribute risk

Brand consistency through careful oversight of menu, design, and service standards

Adaptability to local tastes while maintaining core Chi-Chi’s identity

Given the often-turbulent nature of restaurant revivals, this is a high-stakes move. But McDermott seems bullish: “Chi-Chi’s is back stronger than ever,” he said in a press release.

Nostalgia + Risk: What’s Driving Public Buzz

The reaction among fans and industry watchers has been electric.

On social media, long-time patrons and brand enthusiasts have posted excitement, memories, and speculation. Many are eager to try the signature Chimichangas, Original Nachos Grande, and other classic Tex-Mex staples they missed.  At the same time, some commentators express caution: can a brand tarnished by scandal fully rebound?

Industry analysts note that reviving a defunct chain is always a delicate operation. The brand must walk a tightrope: appeal to nostalgia without appearing stale; expand quickly without sacrificing quality; and manage public sentiment in a media environment skeptical of comebacks.

Yet, Chi-Chi’s advantages are strong:

Brand recall: Many Americans still remember the chain fondly

Existing supply chain: Because the Chi-Chi’s grocery products continued under Hormel, there’s a built-in logistics and branding foundation

Emotional resonance: For many, dining at Chi-Chi’s evokes personal memories — family nights, group dinners, special occasions

It’s telling that McDermott chose Minnesota for the relaunch; the Twin Cities region was once a Chi-Chi’s stronghold, and that regional loyalty may help provide a safer launch pad.

What Happened to the Old Stores — and What’s Changed Since

To understand how big a pivot this is, a brief look back:

By 2004, Chi-Chi’s U.S. footprint had dwindled to around 65 locations. Ownership had changed hands, profitability declined, and the reputational blow from the hepatitis A outbreak was devastating.  In that final weekend of operations (September 18, 2004), all remaining locations shut down.  Some of those real estate properties were sold or converted into other restaurant uses by buyers such as Outback Steakhouse. Since then, the brand survived only in grocery aisles — but with limited cross-over to the restaurant side. Because Hormel retained rights to do food products under the name, Chi-Chi’s stayed in public consciousness in a constrained way. What’s changed now:

Food safety, health regulation, and consumer expectations have evolved dramatically

Restaurant tech (delivery, online ordering, analytics) adds new levers for growth

People are more willing to revisit “retro” or revival concepts — especially with clever marketing

Capital markets and franchising infrastructure are more mature and specialized

Still, the brand will need to contend with stiff competition in the Mexican / Tex-Mex space, local independents, and consumer skepticism about whether the old magic can translate into a modern success.

The Granite Run Store and Beyond: What to Expect

You asked specifically about the Granite Run store — likely referencing a location that used to be or was planned to be a Chi-Chi’s. While I found no published confirmation that a Granite Run location is part of the announced relaunch, the strategy suggests that mid-Atlantic / Northeastern markets (where Chi-Chi’s had presence in its heyday) could be in later waves of expansion.

In fact, trade and local reporting hint that conversion of existing restaurants into Chi-Chi’s may be on the table. Some of McDermott’s existing Rojo Mexican Grill restaurants are rumored to be rebranded into Chi-Chi’s as part of the rollout. That model would allow for faster scaling in known markets. A Granite Run location, if viable and strategically placed, could very well be in future phases.

So for now, “stay tuned” is the best advice: this comeback is unfolding in stages, and earlier success will determine how aggressively the brand pushes into new territories.

Challenges, Risks & Red Lines

Even with the nostalgia wind at its back, Chi-Chi’s revival faces significant hurdles:

Brand baggage & consumer wariness
The hepatitis A incident still lingers in memory in some markets. Overcoming that stigma takes more than marketing — it requires credible operations, inspection transparency, and perhaps bold gestures of accountability.

Franchise execution
Franchising fast is tempting, but poor execution or uneven locations could tarnish the revival before it gains critical mass.

Operational costs & labor pressures
Real estate costs, wage inflation, food supply chains, and local regulations vary wildly across states. The margin for error is thin.

Competition and differentiation
The Mexican / Tex-Mex category is crowded—both from major chains and local favorites. Chi-Chi’s must clearly define what it does better or differently.

Consistency in guest experience
One of the pitfalls of revivals is that early locations become proof points. If the first few stores misfire on service, food quality, or ambiance, negative buzz can spread quickly.

Balancing legacy and modernization
Too much nostalgia risks being dated; too much change risks alienating core fans. The revived brand must strike a delicate balance.

What Success Might Look Like — and When

If Chi-Chi’s executes well, here are some milestones to watch:

Positive opening sales and traffic in St. Louis Park, exceeding forecasts

Strong social media and press reception — influencer reviews, local food critics

First wave of franchise agreements in midwest or Sun Belt states

Flagship stores in legacy markets like Pennsylvania, Ohio, New Jersey, etc. (perhaps including Granite Run)

Smart partnerships and co-branding to boost visibility

Brand synergy with grocery side — cross-promotion for Chi-Chi’s salsa and food products, driving awareness

Given the inherent delays in restaurant rollouts, 2026 is likely to be the true test year. If Chi-Chi’s can show traction by end of 2026 — growing to perhaps 10–25 locations with consistent margins — the narrative will shift from “revival experiment” to “resurgent brand.”

Final Take

Chi-Chi’s resurrection is an audacious bet. The brand’s strength lies in its deep nostalgic roots, name recognition, and the emotional connection many Americans retain. But nostalgia alone won’t carry it through. The success of this relaunch will depend on execution — on food quality, service, brand consistency, smart scaling, and deft balance between past and present.

For those who once walked into a Chi-Chi’s with tortilla chips, salsa, friends, and family, this reopening is more than just a restaurant news story. It’s a chance to revisit a familiar experience — and discover whether the flavors of the past can thrive in a new era.

Keep your eye on October 6, 2025 in St. Louis Park. That’s when the first chapter of this new era begins. And yes — it’s only a matter of time before other locations, perhaps even Granite Run, reemerge from the shadows.