FOOD NEWS
The Disturbing Reason Chi-Chi's Shut Down For Good In 2003
By Elias Nash
No business has better embodied the American appropriation of international cuisine than Chi-Chi's, a once-prominent “Mexican” chain of casual dining establishments that coined the word “Salsafication” to describe their dining experience. A multi-million dollar franchise at its height, there is not a single location in the U.S. today, and Chi-Chi's downfall is a story of literal life and death.
Founded in 1975, Chi-Chi's was an instant success, prompting a stockbroker to buy franchising rights, and by 1986 they rapidly expanded to 200 locations. Soon after, mistakes like building massive restaurants that couldn’t operate profitably, expanding to states that already had the demand for Mexican food satisfied, and high management turnover caused the company to file for Chapter 11 bankruptcy.
Within a year of filing for bankruptcy, Chi-Chi's landed in the national spotlight when a location in Pennsylvania was the center of a deadly hepatitis A outbreak, traced to green onions used in the salsa. The Associated Press reported that at least 575 people had contracted the virus after dining at the restaurant, and it became the biggest hepatitis A outbreak in American history, with four people dying.
Already struggling, Chi-Chi's couldn’t save its reputation, and in 2004, USA Today reported that Outback Steakhouse bought the company and planned to convert locations into their own brands, including Fleming's, Roy's, and Cheeseburger in Paradise. Chi-Chi's isn't entirely gone though, as a few locations in Europe remain, and Hormel sells select Chi-Chi's products in grocery stores.