Although Chi-Chi's itself is long gone in the United States, vanished in a perfect storm
of financial mess and food poisoning, it has left behind it quite a legacy.
Let's celebrate the silliness that was Chi-Chi's, and figure out why they disappeared.
The businessmen who dreamed up Chi-Chi's actually had a pretty solid idea in the beginning.
It was the 1970s, and Mexican food options were pretty nonexistent.
Even Taco Bell hadn't gone nationwide at that point.
A group of Minnesota entrepreneurs felt the time was right for a sit-down Mexican restaurant
in the Midwest and at first, their profits went way beyond their expectations.
That first year in business, they took in $2 million — five times their projected
revenue.
Things were looking good, and it seemed like the sky was the limit for America's new favorite
chain.
Naturally, success like that does not escape the ever-watchful eyes of big money investors.
Within a few years, the franchise operation was bought out, and control was given to one
of the bigwigs at Kentucky Fried Chicken.
While he moved company headquarters from Minneapolis to Louisville, the chain's expansion in the
'70s and early '80s remained centered on the Midwest.
Those Midwestern restaurants remained quite successful, mostly due to the fact that they
faced little or no competition or expectations when it came to Mexican food.
But when Chi-Chi's tried expanding into other markets like New York and Miami, they just
didn't catch on.
Their failures in Texas, California, and New Mexico were, perhaps, to be expected, but
when Chi-Chi's failed to take hold even in New England or the deep South, it started
to seem like the fiesta might be starting to wind down just as it was getting started.
Ironically, Chi-Chi's success was one of the things that set the stage for its subsequent
doom.
In the early '80's, Chi-Chi's was one of the hottest chains going, opening 45 new restaurants
within a two-year period between 1981 and 1983.
Frequently, these new restaurants would see profits of up to $80,000 per week, which was
big stuff for the early '80s, as was the annual overall profits of over $9 million.
By 1984, Chi-Chi's net income was over $16 million, and by 1986 there were more than
200 Chi-Chi's restaurants throughout the nation.
And this was pretty much as good as it got.
But even as they were at their peak, their profits were starting to slide.
It seems that the larger restaurants, which averaged between 10,000 and 12,000 square
feet, were just too large to operate at a profit.
Too-rapid growth also contributed to numerous problems at the corporate level, with an insanely
high 80 percent management turnover rate leading to inconsistencies in food and service that
did the chain no favors.
While Chi-Chi's might have introduced Mexican food to certain markets like the Midwest,
it also opened the door for other Mexican restaurant chains such as El Torito, Casa
Gallardo, and On the Border, all of which would soon be expanding to compete with Chi-Chi's
throughout the U.S.
What's more, Mexican fast food was also becoming a thing with the rise of Taco Bell, which
would pose itself as a serious Chi-Chi's competitor in the 1990s with its purchase of casual dining
chain Chevy's Fresh Mex.
Even McDonald's would get into the Mexican food game, adding breakfast burritos and limited-time
chicken fajitas to their menus.
Then came the new millennium, and with it the rise of fast casual.
Suddenly, restaurants like Baja Fresh, Qdoba, and the big dog Chipotle creating a market
for the budget burrito, and that was bad news for Chi-Chi's.
Non-Mexican casual dining restaurants would also cut into Chi-Chi's target audience, as
diners wishing for a fun but affordable and not too fancy evening out could, by the '90s,
choose from other options including Olive Garden, Macaroni Grill, and Chili's.
This last-named even offered a southwestern-ish kind of menu, and could actually boast Texan
roots.
One of the things Chi-Chi's was known for, back in the day, was perhaps something they'd
have preferred not to publicize.
According to anecdotal evidence unearthed on the internet, certain Chi-Chi's were popular
among teenage drinkers.
Not all that surprising, when you think about it, since a cheap pitcher of strawberry margaritas
is obviously going to appeal to a high school crowd more than, say, a selection of single
malt scotches.
What you need to keep in mind, however, is that in Chi-Chi's earlier years, a certain
amount of teenage drinking was actually legal.
Yes, believe it or not, boomers and early Gen X-ers were legally able to imbibe at age
18, right up until 1984 when the National Minimum Drinking Age Act raised the drinking
age to 21.
Chi-Chi's profits took a tumble after that year.
The higher drinking age cut out the 18-20 crowd, at least those not possessed of convincing
fake IDs.
Needless to say, this eliminated not only high schoolers, but a good chunk of the college
crowd.
Not to mention, the Reagan-era "Just Say No" philosophy was beginning to affect drinking
habits in general, with stiffer state laws being enacted in order to curb drunk driving
and control bar happy hours.
The resulting drop in public alcohol consumption nationwide affected the restaurant industry
as a whole, and Chi-Chi's restaurant profits were definitely feeling the hangover.
As the population of Mexican immigrants continued to grow and expand throughout the United States
in the latter part of the 20th century, these new immigrants brought their food traditions
with them.
What this meant, particularly for those not living in one of the southwestern border states,
was that we were finally able to taste Mexican food as it was meant to be.
And we found, much to our surprise, that it was nothing whatsoever like the food that
Chi-Chi's had been dishing up.
With real Mexican food, cheese is cotija, not cheddar or processed.
Beans are fresh, not from a can.
Sour cream does not smother everything.
Not every type of food can or should be deep fried.
Chimichangas aren't even a thing.
And who even knows what a Chajita is?
As discerning diners came to know Mexican cuisine in all its glorious diversity, from
fine dining to bodegas, and even taco trucks, the days of the El Grande Burro were drawing
to a close.
After Chi-Chi's struggles in the '80s, they were bought out by Foodmaker, Inc., the fast
food conglomerate that owned Jack-in-the-Box.
Things started looking up again for a bit, profit-wise, but the menu certainly didn't
improve.
Any original menu items even remotely resembling Mexican cuisine were replaced by Tex-Mex and
American items like pizza, pasta, burgers, and stir-fry.
Sales soon started to slip again, and restaurants kept on closing.
From a 1986 high of 200 restaurants, Chi-Chi's was down to 150 and still dropping by the
end of the '90s.
In 2002, Chi-Chi's debt-ridden parent corporation Prandium declared Chapter 11 bankruptcy.
While Prandium would emerge intact from their own bankruptcy proceedings the next year,
Chi-Chi's themselves would file Chapter 11 in 2003, and for them there would be no recovery.
By 2004, Outback Steakhouse would purchase 76 remaining Chi-Chi's restaurants, complete
with all furniture and fixtures, with the stated intent to convert at least some of
the properties to its own brand of restaurants.
Some of these closed Chi-Chi's were not repurposed as Outbacks, however.
A number of them were eventually sold to be demolished or used to house other businesses.
Still other old Chi-Chi's, creepily, are still haunting the landscape, long abandoned but
perhaps still filled with the ghosts of sombrero-wearing, margarita-drinking revelers from times gone
by.
"Hey, what's wrong chip hat"
"“What is wrong? I’m just chillin’, with the guac from my chip hat."
While many businesses not only survive but thrive after bankruptcy, Chi-Chi's was dealt
a fatal blow by something totally unexpected — a massive hepatitis outbreak.
Health department investigations traced the source of this October 2003 outbreak to the
Chi-Chi's at the Beaver Valley Mall in Monaca, Pennsylvania.
While they originally suspected unsafe food handling practices, the source was eventually
determined to be green onions used as an ingredient in a number of dishes, including salsa.
By the time the outbreak was over, it had made 660 people, including 13 restaurant employees,
sick.
What's worse, four people had actually died.
Over 9,000 people exposed to the hepatitis had needed to be inoculated against the disease,
and even though Chi-Chi's had declared bankruptcy prior to the hepatitis outbreak, the bankruptcy
court nevertheless modified the order to allow hepatitis victims to proceed with lawsuits
against the chain.
Among the payouts Chi-Chi's subsequently made were an $800,000 class action settlement paid
out to those who'd needed to be immunized and a $6.25 million settlement to a man whose
hepatitis had caused him to require a liver transplant.
Before Chi-Chi's folded, they'd had to shell out at least $40 million in hepatitis-related
settlement payouts.
They, in turn, sued the green onion supplier, but were unsuccessful.
By that point it was too late anyway, since Chi-Chi's had long since said hasta la vista,
baby.
While Chi-Chi's restaurants are completely absent from America, they do still exist in
a few locations overseas.
It would seem, however, that Chi-Chi's Asian and North African locations have now gone
the way of their western hemisphere counterparts.
Both the Indonesian and Kuwaiti locations have long been social media silent, which
is never a good sign, while the Abu Dhabi Chi-Chi's now appears to have been replaced
by different dining options.
An article published in 2014 on global business website RetailDetail makes mention of Chi-Chi's
restaurants in Germany and China, and those seemed to still be in operation as of 2016.
A menu from Chi-Chi's in Brussels shows they're still serving some of the old favorites, so
fans should definitely plan on stopping by if they're ever in the neighborhood.
Chi-Chi's are still in the Netherlands, and Luxembourg, too, where there seem to be several
restaurants still in operation.
There is also at least one Austrian Chi-Chi's, located in Vienna.
And good news!
It looks like fried ice cream remains on the menu, along with strawberry margaritas.
If you're still craving Chi-Chi's, you won't need a time machine, just a plane ticket.
“Hi, I need a ticket.
Just one?"
If Chi-Chi's logo looks familiar to you despite the fact that you've never eaten in any of
their restaurants, it's because Chi-Chi's is actually still around, just in a different
way.
They are even continuing to serve up chips and salsa and margaritas.
No, not at a table, you've got to supply your own there.
Chi-Chi's today is strictly about the products, and they're only putting out a relatively
limited number of those.
Rebranded as a producer of retail food items, their current line includes a dozen different
salsas, a queso dip, six different varieties of tortilla chips, various sizes of flour
and corn tortillas, several types of seasoning, corn cake mix, and chopped green chiles.
Chi-Chi's pre-mixed cocktails are owned by a different outfit, the Sazerac Company.
These drinks are available in 1.75 liter handles, and aren't limited to margaritas alone.
Margaritas co me in six different kinds: original, strawberry, peach, ruby red, golden and skinny
margaritas, but there's also a Chi-Chi's-branded Mojito, two types of Long Island iced tea,
pina colada, and even dessert drinks: Mexican Mudslide, White Russian, orange cream, and
chocolate malt.
Pick up a few of those, some Chi-Chi's chips and salsa, maybe some queso, and there you
have it, DIY happy hour.
Just add a tacky sombrero, and you're all set to get your fiesta on.
"Uhhh so boring."
If you're jonesing for some Chi-Chi's food that goes beyond chips and salsa or corn cakes,
and you can't afford a plane ticket to Europe, you can always try Googling the old recipes.
There are a plethora of Chi-Chi's copycat creations out there, including knockoff nachos
grande, chimichangas, and salsa verde chicken kabobs.
You may, just may, be able to get your hands on a few of the genuine Chi-Chi's recipes
if one urban legend turns out to have a core of truth.
As the story goes, a disgruntled ex Chi-Chi's employee stole some of the top-secret recipes
on his or her way out the door.
These purportedly once-classified documents were published in 2010 in several local newspapers.
Included among them were recipes for chili con queso, mild salsa, and seafood nachos,
perfect for fans desperate for a little bit of 1980s nostalgia.
When it comes to a recipe for the mysterious Chajita, though, your guess is as good as
ours.
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