Green’s Dictionary of Slang

frito n.

[advertisements for Frito Bandito cornchips, which feature a stereotypical ‘Mexican bandit’]

(US) a derog. term for a Mexican or Spanish-American.

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[US]Maledicta II:1+2 (Summer/Winter) 156: Frito Any Chicano or Mexican, after the ‘Frito Bandito’ advertisement featuring a ‘Mexican Bandit’ who stole cornchips.