Chipotle's History and Growth Journey

In 1993, Chipotle is founded by this guy, Steve Ells. After graduating culinary school in 1990, Ells works as a sous chef in San Francisco and becomes enamored with local mission style burritos, known for their jumbo size and tin foil wrappers. Three years later, Ells borrows about $75,000 from his dad and uses the loan to open the first Chipotle Mexican grill in Denver. Ells calculates he has to sell 114 burritos a day to break even. By the end of the first month, Chipotle Mexican Grill is selling over 1,000 burritos a day. Ells starts expanding, and in 1996, his parents raise about $1.3 million, mostly from wealthy friends. But to grow quickly, Chipotle needs a lot more capital. Enter McDonald's. In the late 90s, Mickey D's wants to prove to its investors it's diversifying. Eventually, it would go on to buy Boston Market, Donato's, Prettimoner, and Fazoldi's. But first on their plate is Steve Ells' burrito chain. In 1998, McDonald's invests about $50 million in Chipotle. But over the next three years, McDonald's grows to be Chipotle's largest investor, owning 90% of the brand and investing around $360 million. $60 million. By 2005, the Food with Integrity brand has about 500 locations and is doing well, but there are conflicts with McDonald's over the menu, brand, culture, supply chain, and franchising. So, in 2006, the companies part ways. On January 26th, Chipotle goes public. The IPO price is set at $22. By the end of the first day, it doubles to $44. That growth is only the beginning. Over the next seven years, Chipotle continues to expand and tries its hand at Asian and Italian restaurants. But growing a company and making ethically sourced delicious burritos ain't always easy. In July through December 2015, E. coli, salmonella, and norovirus in Chipotle restaurants sickens people in nine states. Since its IPO opens through late 2015, Chipotle's stock grows steadily, but it takes a major hit after the bad publicity. Steve Ells releases a statement apologizing for the outbreaks with a promise. they are taking aggressive steps to fix the problem. On February 8th, 2016, Chipotle will close all of its stores nationwide to hold a staff meeting about food safety and best practices. Chipotle has been one of the great success stories in the fast food industry. The company hopes to turn this controversy into a footnote, not an epitaph.

Ells calculates he has to sell 114 burritos a day to break even. By the end of the first month, Chipotle Mexican Grill is selling over 1,000 burritos a day. Ells starts expanding, and in 1996, his parents raise about $1.3 million, mostly from wealthy friends.

But to grow quickly, Chipotle needs a lot more capital. Enter McDonald's. In the late 90s, Mickey D's wants to prove to its investors it's diversifying. Eventually, it would go on to buy Boston Market, Donato's, Prettimoner, and Fazoldi's.

But first on their plate is Steve Ells' burrito chain. In 1998, McDonald's invests about $50 million in Chipotle. But over the next three years, McDonald's grows to be Chipotle's largest investor, owning 90% of the brand and investing around $360 million. $60 million. By 2005, the Food with Integrity brand has about 500 locations and is doing well, but there are conflicts with McDonald's over the menu, brand, culture, supply chain, and franchising.

So, in 2006, the companies part ways. On January 26th, Chipotle goes public. The IPO price is set at $22. By the end of the first day, it doubles to $44. That growth is only the beginning.

Over the next seven years, Chipotle continues to expand and tries its hand at Asian and Italian restaurants. But growing a company and making ethically sourced delicious burritos ain't always easy. In July through December 2015, E. coli, salmonella, and norovirus in Chipotle restaurants sickens people in nine states. Since its IPO opens through late 2015, Chipotle's stock grows steadily, but it takes a major hit after the bad publicity.

Steve Ells releases a statement apologizing for the outbreaks with a promise. they are taking aggressive steps to fix the problem. On February 8th, 2016, Chipotle will close all of its stores nationwide to hold a staff meeting about food safety and best practices. Chipotle has been one of the great success stories in the fast food industry.

The company hopes to turn this controversy into a footnote, not an epitaph.

Transcript for:Chipotle's History and Growth Journey

Transcript for:
Chipotle's History and Growth Journey