Description
Chipotle Mexican Grill is an American chain of fast casual restaurants in the United States, United Kingdom, Canada, Germany, and France, specializing in tacos and Mission burritos that are made to order in front of the customer. Its name derives from chipotle, the Nahuatl name for a smoked and dried jalapeño chili pepper. The company trades on the New York Stock Exchange under the ticker symbol CMG.
Chipotle is one of the first chains of fast casual dining establishments. Competitors in the fast-casual Mexican market include Qdoba Mexican Grill, Moe's Southwest Grill, Rubio's Coastal Grill, and Baja Fresh. Founded by Steve Ells on July 13, 1993, Chipotle had 16 restaurants (all in Colorado) when McDonald's Corporation became a major investor in 1998. By the time McDonald's fully divested itself from Chipotle in 2006, the chain had grown to over 500 locations. With more than 2,000 locations, Chipotle had a net income of US$475.6 million and a staff of more than 45,000 employees in 2015.
In May 2018, Chipotle announced the relocation of their corporate headquarters to Newport Beach, California, in Southern California, ending their relationship with Denver after 25 years.
History
Founder Steve Ells attended the Culinary Institute of America in Hyde Park, New York. Afterward, he became a line cook for Jeremiah Tower at Stars in San Francisco. There, Ells observed the popularity of the taquerías and San Francisco burritos in the Mission District. In 1993, Ells took what he learned in San Francisco and opened the first Chipotle Mexican Grill in Denver, Colorado, in a former Dolly Madison Ice Cream store at 1644 East Evans Avenue, near the University of Denver campus, using an $85,000 loan from his father. Ells and his father calculated that the store would need to sell 107 burritos per day to be profitable. After one month, the original restaurant was selling over 1,000 burritos a day. The second store opened in 1995 using Chipotle's cash flow, and the third was opened using an SBA loan. To fund more growth, Ells' father invested $1.5 million. Afterwards, Ells created a board of directors and business plan, raising an additional $1.8 million for the company. Ells had originally planned to use funds from the first Chipotle to open a fine-dining restaurant, but instead focused on Chipotle Mexican Grill when the restaurants saw success.
In 1998, the first restaurant outside of Colorado opened in Kansas City, Missouri. The company opened its first location in Minnesota by opening near the campus of the University of Minnesota in Minneapolis in March 1999.
In 1998, McDonald's made an initial minority investment in the company. By 2001, the company had grown to be Chipotle's largest investor. The investment from McDonald's allowed the firm to quickly expand, from 16 restaurants in 1998 to over 500 by 2005. On January 26, 2006, Chipotle made its initial public offering (IPO) after increasing the share price twice due to high pre-IPO demand. In its first day as a public company, the stock rose exactly 100%, resulting in the best U.S.-based IPO in six years, and the second-best IPO for a restaurant after Boston Market. The money from the offering was then used to fund new store growth.
In March 2005, Monty Moran was appointed president and chief operating officer of Chipotle while Ells remained chairman and CEO.
In October 2006, McDonald's fully divested from Chipotle. This was part of a larger initiative for McDonald's to divest all of its non-core business restaurants — Chipotle, Donatos Pizza, and Boston Market — so that it could focus on the main McDonald's chain. McDonald's had invested approximately $360 million into Chipotle, and took out $1.5 billion. McDonald's had attempted to get Chipotle to add drive-through windows and a breakfast menu, which Ells resisted. In 2008, Chipotle opened its first location outside of the United States in Toronto.
In January 2009, president and chief operating officer Monty Moran was promoted to co-CEO, a position that he would share with Ells, while Moran retained his president position.
In a list of fastest-growing restaurant chains in 2009, Chipotle was ranked eighth, based on increases in U.S. sales over the past year, and in 2010 Chipotle was ranked third. Consumer Reports ranked Chipotle as the best Mexican fast-food chain in 2011. The company serves approximately 750,000 customers per day.
In December 2010, Chipotle hired chef Nate Appleman to develop new cuisine. Appleman has won Rising Star Chef from the James Beard Foundation, was named "Best New Chef" by the Food & Wine magazine, and competed on The Next Iron Chef.
In 2010, U.S. Immigration and Customs Enforcement (ICE) audited Chipotle's Minneapolis restaurants, and found that some employees had been hired using fraudulent documents. In December, Chipotle fired 450 employees from its Minneapolis restaurants as a result of the audit, resulting in protests by local groups. In February 2011, ICE expanded the audit to include 60 restaurants in Virginia and Washington, D.C. which resulted in 40 workers being fired. In April 2011, the criminal division of the attorney general's office in Washington, D.C., joined the case, and ICE agents began interviewing employees at 20 to 25 restaurants in other locations, such as Los Angeles and Atlanta. In response to the government investigations, Chipotle hired former director of ICE Julie Myers Wood and high-profile attorneys Robert Luskin and Gregory B. Craig.
In December 2016, Chipotle announced that co-CEO Monty Moran has stepped down from his role effective immediately with Ells becoming the sole CEO. Eleven months later, Ells announced in November 2017 that he would be stepping down as CEO.
In December 2017, Chipotle announced it signed a 15-year lease and in late 2018 will move around 450 corporate employees – currently housed in multiple buildings around downtown Denver – into the new 1144 Fifteenth Tower and occupy around 126,000 square feet or 5 floors of the 40-story tower.
In February 2018, Chipotle announced that Taco Bell CEO Brian Niccol would replace Ells as CEO starting on March 5 while Ells would retain his chairman position. Many industry analysts praised Niccol's appointment saying that Chipotle "needed new blood." Chipotle stock went up $30.27, or 12.04%, as a result of the announcement. However, other analysts criticized the announcement by saying that "the move goes against everything the burrito chain stands for."
In May 2018, Chipotle announced that it would relocate headquarters from Denver to Newport Beach, California in Southern California. Corporate functions handled in their Denver and New York offices would move to Newport Beach or to an existing office in Columbus, Ohio. This move would impact 400 workers, some being offered relocation and retention packages.
In June 2018, the company announced the closing of 65 under-performing restaurants.
Ells broke all ties with the company in March 2020 by resigning as its chairman and departing from its board of directors.
