new York
CNN
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Chi-Chi’s, the Mexican restaurant chain that closed 20 years ago, is making a comeback.

Hormel Foods, the current owner of the Chi-Chi’s brand, announced Tuesday that it will allow Michael McDermott, son of the chain’s co-founder, to use the storied name when it reopens restaurants in 2025. Specific locations, menu items and designs were not immediately released.

Chi-Chi’s was founded in Minnesota in 1975 by Marno McDermott and Green Bay Packers player Max McGee and eventually expanded to more than 200 locations.

However, the chain was forced to close in 2004 after a hepatitis A outbreak at a Pittsburgh-area location that was traced to green onions served in the complimentary salsa. This sickened approximately 650 people, resulting in four deaths and several hundred lawsuits. It is the largest hepatitis A outbreak in United States history and led to nationwide changes in food safety.

Outback Steakhouse purchased Chi-Chi’s for $40 million and closed the remaining restaurants. The former rival used the locations to open Outback, Bonefish Grill and other concepts owned by its parent company.

Michael McDermott will revive Chi-Chi’s, which was known for its eclectic interior as well as an extensive Tex-Mex menu that included everything from fajitas to fried ice cream. He’s an industry veteran who launched Kona Grill and sold it to the trendy steakhouse’s parent company, STK, in 2019.

“We have seen the impact our restaurant has had on individuals and families across the country and believe there is a great opportunity to bring the brand back in a way that will resonate with today’s consumer – a modern dining experience with the same great taste and Mexican twist,” McDermott said in a press release.

The Chi-Chi’s branding, still used on packaged foods and margaritas, continues to be sold in stores. Hormel has been making chips, salsas and other Chi-Chi products since the late 1980s.

The revival of Chi-Chi’s comes as other nostalgia chains face mixed results. Chili’s has repeatedly reported strong profits this year, while Red Lobster and TGI Fridays have both filed for bankruptcy. The seafood chain introduced a new happy hour, among other menu changes, to revitalize the chain under a new CEO. while Fridays has quietly closed another dozen restaurants in recent weeks.

“As restaurants continue to face challenges such as rising food costs, labor shortages and higher build-out costs, nostalgia has emerged as a strong driver of customer visits,” RJ Hottovy, head of analytical research at Placer.ai, told CNN. “Strategies like reintroducing popular menu items or offering exclusive collectibles have resonated with consumers, suggesting that these tactics could also work well in revitalizing these classic brands.”