The Rise And Fall Of Chi-Chi's: What Happened To The Popular Restaurant Chain?

Mexican restaurants make up a good portion of chains and eateries in America. It isn't just in states that share a border with Mexico either. While Texas and California definitely have their fair share of Mexican eateries, Mexican food makes up 10% of all restaurants in the United States. This influence is felt even in places that are not solely focused on Mexican food, with chain restaurants like Applebee's and Red Lobster serving margaritas all over the country.

One Mexican chain that you will no longer see amongst the crowd is Chi-Chi's. The once popular restaurant chain quickly saw its downfall in 2003 when a hepatitis A outbreak was traced back to the green onions used at one of its locations in Monaca, Pennsylvania, just outside of Pittsburg. The outbreak was the largest in American history, resulting in 4 deaths and a total of 650 people affected.

Combined with financial issues that the chain was already having (it had filed for bankruptcy in 2003 as well), the resulting class action lawsuit was the final nail in the coffin for Chi-Chi's. It officially closed all of its restaurants in America in 2004, selling the real estate locations to rival Outback Steakhouse for a mere $40 million. Some restaurants remained overseas in Germany and Belgium, but those locations also closed in 2022. As of 2024, the last Chi-Chi's location left, located in Vienna, Austria, finally shuttered its doors.

The chain got its start in Minneapolis, Minnesota in 1975, and within ten years the chain had 237 locations across the United States. The chain saw great success throughout the '80s and '90s, with many still having warm recollections of the restaurant from their childhood. At one point, the chain even expanded overseas into place as far flung as Kuwait and the United Arab Emirates.

However, the number started to steadily decline throughout the late '90s due to increasing competition and a series of ownership changes. By 2002, there were only 144 locations left. In October 2003, the chain filed for bankruptcy; a month later, the outbreak occurred. Initially, 181 people were affected by the outbreak, along with 13 employees. The numbers continued to increase rapidly as the CDC investigated the case.

Eventually, the cause was revealed to be green onions, specifically those that had not been cooked or had been heated only minimally. The precise source was not exactly identified but was only confirmed as coming from green onions either grown or processed in one or more farms in Mexico. Chi-Chi's settled lawsuits related to the outbreak by July 2004 but when combined with the bankruptcy filing and constant leadership turnover, it was too late. As of now, Chi-Chi's is just a nostalgic memory for kids raised in the '80s and '90s.