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, California. 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 (39°40′42″N 104°58′04″W / 39.67834°N 104.967682°W / 39.67834; -104.967682) in Denver, Colorado, in a former Dolly Madison Ice Cream Store 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. In 1999, the first restaurants outside of Colorado opened in Columbus, Ohio, and Minneapolis, Minnesota. 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, 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 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, Donato's Pizza, and Boston Market – so that it could squarely focus on the main McDonald's chain. McDonald's invested approximately $360 million into Chipotle, and took out $1.5 billion. The company currently trades on the New York Stock Exchange.
Competitors in the fast-casual Mexican market include Qdoba Mexican Grill, Moe's Southwest Grill, Rubio's Fresh Mexican Grill, Panchero's Mexican Grill, and Baja Fresh. 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 has 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 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 20-25 restaurants in other locations such as Los Angeles, CA and Atlanta, GA. In response to the government investigations, Chipotle hired former director of ICE Julie Myers Wood and high-profile attorneys Robert Luskin and Greg Craig. In addition, a Mexican citizen is suing Chipotle for "mental anguish and suffering", claiming racial and national discrimination because a Minnesota restaurant allegedly refused to acknowledge his Mexican passport as a valid identification for an alcohol purchase.
In 2011, Steve Ells was a judge for the TV show America's Next Great Restaurant and investor of ANGR Holdings, the company that will be running the winning concept's restaurants. Chipotle has agreed to purchase Ell's investment in ANGR at his cost, provide support for ANGR operations, and invest a total of $2.3 million in cash contributions.
Read more about this topic: Chipotle Mexican Grill
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