Chi-Chi's plans new restaurants more than 20 years after its bankruptcy

Chi-Chi’s is making a comeback.

The Mexican chain said this week that it plans to open some new restaurants next year. The locations would be the first since Chi-Chi’s filed for bankruptcy protection in 2003.

Michael McDermott, the son of Chi-Chi’s founder, said he struck an agreement with Hormel Foods to open the restaurants. Austin, Minnesota-based Hormel owns the Chi-Chi’s trademark and produces Chi-Chi’s-branded chips and salsas.

"The Chi-Chi's brand is one of the most beloved, respected, and well-known names in the Mexican food category," Hormel said Thursday in a statement. “The legacy and spirit of the brand remain strong, and we’re excited about the upcoming relaunch of Chi-Chi's restaurant locations.”

McDermott, a restauranteur who also founded Kona Grill and Rojo Mexican Grill, didn’t say how many locations he planned to open or where. McDermott said the restaurants would be an updated version of the classic Chi-Chi's.

“We have seen the impact our restaurant has had on individuals and families across the country and believe there is a strong opportunity to bring the brand back in a way that resonates with today’s consumer,” McDermott said in a statement.

Chi-Chi’s was founded in 1975 by Marno McDermott and former Green Bay Packers player Max McGee. It grew rapidly in the 1990s, reaching more than 200 locations nationwide. But by 2003 it had filed for bankruptcy after going through a series of ownership changes and struggling with increasing competition.

Around the time of its bankruptcy filing, Chi-Chi’s reputation was also married by a hepatitis A outbreak at one of its restaurants in Pennsylvania. The outbreak, linked to the green onions it used as a garnish and in its salsas, killed four people and sickened 660.

The last Chi-Chi’s closed its doors in 2004.