Several casual dining chains are considering reducing their footprint this year, but the once-good but long-embarrassing brand is preparing for a comeback.
In late 2024, Michael McDermott announced that he would be reviving Chiki, a restaurant company founded in the 1970s by his father, Maruno and former Green Bay Packers wide receiver Max McGee.
It has been about 20 years since Cheech closed, following some challenges. Nevertheless, despite the struggles facing other brands, young McDermott told Nexstar that Chi-chi is being prepared.
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“I’ve been doing this long enough, and I’ve found it all to be cyclical,” said McDermott, who has built a career in the restaurant industry with brands like Kona Grill and Rojo Mexican Grill. “I think there’s a lot of strength in the brand. [in Chi-Chi’s] Also, in the places we choose, I think it’s always a big deal to get into our business and the right market. ”
Cheech’s return begins with a converted Rojo Mexico grill in St. Louis Park, just outside Minneapolis. It’s not too far from where the first ever Cheech opened in 1975.
Michael McDermott, depicted here, is preparing to revive the Chi-Chi restaurant, a brand that his father co-launched in the 1970s. (Chi-chi via PR Newswire)
He said the company plans to develop a franchise program and expand it in the Midwest and East Coast, as it originally did. McDermott also hinted at Southwest, an area known as “competitive.”
Fans of the original Cheech restaurant are named after McDermott’s mother, Luthan, who likes the nickname. According to McDermott, it includes seafood enchiladas, fried ice cream and chimichanga. Some of the Rojo menus will be carried over, but new items like Birria Tacos have been taken into consideration.
Decoration is approached in a similar way. From the early days of Cheech in the 1970s and 80s, there will be some influences, like the hanging plants.
Unlike the first Cheech restaurants, fans have the opportunity to win equity stakes for the brand.
Last month, Chi-Chi partnered with Startengine, a “alternative platform” that allows everyday investors to invest in startups, collectibles and other alternative assets, in order to “sit down at the table for investors from all backgrounds.”
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A minimum investment of $250 is required in exchange for Chi-Chi’s fairness. The company says the funds raised could be used to help expand the restaurant’s footprint, adding that investors will “be part of an early stage expansion strategy with both company-owned and franchised opportunities.”
These are non-voting stocks, but McDermott said it is accessible to investors who want to reach out.
As of March 6, 195, it was invested through StartEngine, raising nearly $582,000. On March 5th, McDermott and two advisors, John Butorac and Kerry Kramp, invested a total of $295,000. The additional $5,000 investment was made by “insider-related individuals,” who looked like McDermott’s mother.
Currently, the maximum number of stocks worth $1.54 each is over 2.2 million.
What happened to the original Cheech chain?
Chi-chi’s was started in the 1970s by McDermott’s father and McGee. The brand and its more than 200 locations will change ownership several times over the next decades, culminating in bankruptcy filings in late 2003.
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A few moments later, a case of hepatitis A reported in the Pittsburgh area dates back to a green onion served at Chiki, Monaca near Pennsylvania, in the mall. Reports at the time revealed that more than 600 people became ill, four died, and about half of those who became ill sought damages to Chi-chi.
The last Cheech closed in 2004. Homer Foods later bought the Cheech trademark and produced Mexican cuisine under the brand. The company has confirmed that products produced under the name Chi-Chi remain available.
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