Thinking of Buying a Fast-Casual Franchise? Read this report first.
Web Exclusive
Chipotle Keeps Sizzling

Chipotle plans to increase the number of company-operated locations by 21–22 percent or 110 to 120 restaurants in 2007, including franchise acquisitions. It acquired four franchise restaurants during the first quarter and four in early second quarter, eliminating the franchise operations that began under McDonald’s ownership.

Changes to Be Made

Chipotle’s executives love the current growth, but they’re still tweaking a few things here and there.

Our customers are still not asking for [RBGH-free dairy], but we’re doing it because we know it’s better.”

Ells says the brand is implementing a much-improved tortilla press, which will allow crews to not only serve hotter, more evenly heated tortillas but also do so more quickly and with less effort. In addition, the company is completing designs for a new grill, “which will allow our crews to grill our meats in a way that tastes much better, is more consistent and which is also easier for our crews to clean at the end of the day,” Ells says.

Chipotle is redesigning its second make line to function to fill orders more quickly and is attempting to improve design and functionality of building, says Ells, “so that they are more cost effective and at the same time improving their appearance, durability, comfort, functionality, and of course aesthetics.”

The Fresh-Mexican concept is also on track to be serving 100-percent naturally raised meats. Pork served at Chipotle is already 100-percent naturally raised, while 73 percent of chicken and 46 percent of beef meets that standard. In addition, 100 percent of Chipotle’s sour cream, and soon to be cheese, is now sourced from cows that have not received the synthetic growth hormone RBGH.

“Our customers are still not asking for [RBGH-free dairy], but we’re doing it because we know it’s better,” Ells says.

Monty Moran, president chief operating officer, says the company’s development of store managers has been the key to strong comps and profits.

“Our formula for success is based on these four fundamental principles: Identifying talent, developing managers, ensuring high standards, and removing obstacles,” Moran says. “[Our] managers are more energized and efficient in everything they do. … This enthusiasm can be felt across the counter and improves the customer experience.”

Moran says he and Ells has spent a lot of time in the field working with managers. The result has been a 30 percent turnover rate compared to 34 percent last year.

“This focus on developing managers from within is truly becoming part of our company’s culture and not just an initiative,” he says.

Page 1 | 2 | End
Fred Minnick is a professional writer based in Louisville, Kentucky.