Chi-Chi's

This article is about the Mexican restaurant. For South Korean Girl Group, see CHI CHI.

Chi-Chi's logo

Chi-Chi's was a popular Mexican restaurant chain from 1975 to 2004. It ceased to exist within the United States following a 2003 Hepatitis A outbreak that began at one of its locations in suburban Pittsburgh, Pennsylvania. Chi-Chi's is still in operation in Belgium, Luxembourg, United Arab Emirates, Kuwait, Indonesia and Canada. Chi-Chi's also marketed a line of 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. ^[1] From 1977 to 1986, the chain was run by former KFC executive Shelly Frank.^[2] When Frank came on, the chain moved its headquarters to Frank's hometown of Louisville.

By March 1995, the chain had grown to 210 locations.^[3]

Management and marketing

In 2001, Chi-Chi's applied for a trademark^[4] 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

Chi-Chi's last owner while still in business in the U.S. was Prandium Inc., which had filed for bankruptcy several times, including in 1993 as Restaurant Enterprises Group Inc. and in 2002 as Prandium.^[5] On October 8, 2003, Chi-Chi's and Koo Koo Roo, another Prandium subsidiary, filed for Chapter 11 bankruptcy themselves.^[5]

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,^[6] including high school students who caught the disease from the original victims.^[7] 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.^{[citation needed]} Chi-Chi's settled the hepatitis A lawsuits by July 2004.^[8] 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.^[9]

In August 2004, Outback Steakhouse bid $42.5 million^[10] for the rights to buy its choice of Chi-Chi's 76 properties, but 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 its remaining restaurants.^[9]

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.^{[citation needed]}

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

Several Chi-Chi's restaurants operate in Belgium, Luxembourg, and Kuwait, with much of the original menu intact.^[11] Chi-Chi's Belgium was a subsidiary of the now defunct Chi-Chi's United States, but was spun off when Chi-Chi's filed for Chapter 11.^{[citation needed]}

References

1. ^ ^{a b} "Chi-Chi's Inc.". Funding Universe. http://www.fundinguniverse.com/company-histories/ChiChis-Inc-Company-History.html. Retrieved 2008-10-09. 
2. ^ Schoifet, Mark (January 27, 1986). "Frank exits Chi-Chi's, plans early retirement". Nation's Restaurant News. http://findarticles.com/p/articles/mi_m3190/is_v20/ai_4110276/. Retrieved July 2, 2010. 
3. ^ Benmour, Eric (June 14, 1996). "Chi-Chi's closes oldest store here as pullback continues". Business First of Louisville. http://www.bizjournals.com/louisville/stories/1996/06/17/story1.html. Retrieved July 2, 2010. 
4. ^ "Salsafication trademark application". Trademark Trial and Appeal Board. http://www.uspto.gov/web/offices/com/sol/foia/ttab/other/2001/75537251.pdf. Retrieved 2007-05-16. 
5. ^ ^{a b} Spector, Amy. "Prandium restaurant brands for sale; Koo Koo Roo, Chi-Chi's file for Chapter 11 - News - Prandium Inc". Nation's Restaurant News.' October 20, 2003. FindArticles.com. Accessed October 24, 2007.
6. ^ "Hepatitis A outbreak claims its 4th victim". Deseret News (Salt Lake City). April 4, 2004. FindArticles.com. Accessed October 24, 2007.
7. ^ "Hepatitis A outbreak spreads to students". Deseret News (Salt Lake City). December 14, 2003. FindArticles.com. Accessed October 24, 2007.
8. ^ "Chi-Chi's gets court OK to settle hepatitis A claims". Nation's Restaurant News. July 12, 2004. FindArticles.com. Accessed October 24, 2007.
9. ^ ^{a b} Lockyer, Sarah E. "Chi-Chi's shuts all units; Outback buys site rights: Mexican chain, in Chapter 11, retains brand, operations, recipes, trade secrets". Nation's Restaurant News. October 4, 2004. FindArticles.com. Accessed October 24, 2007.
10. ^ Lockyer, Sarah E. (2004). "Chi-Chi's shuts all units; Outback buys site rights: Mexican chain, in Chapter 11, retains brand, operations, recipes, trade secrets". Nation's Restaurant News. http://findarticles.com/p/articles/mi_m3190/is_40_38/ai_n6232955/. 
11. ^ "Chi-Chi's Belgian subsidiary website"