Do you dream of filling burritos with Carne Asada, cheese, and black beans at your own Chipotle Mexican Grill location? Well, I’m sorry to be a dream killer. But Chipotle does not currently offer franchise opportunities.
Is Chipotle a Franchising Right Now? Chipotle, just like some other fast-casual restaurants like In-N-Out Burger and Starbucks don’t franchise. This means that all Chipotle units are wholly owned and operated by the corporation (Chipotle Mexican Grill, Inc.) itself, albeit with a few exceptions. In fact, back in 2006, the company even bought out the few units they had previously operated franchisees.
Just like company-owned fast-casual restaurants, Chipotle decided to take back these units since they don’t want the quality of their food and the experience “compromised.” Of course, we all well know that once you offer your business for the franchise, there’s an amount of control that’s given up and can create an inconsistent dining experience for guests dining across multiple locations.
So why are we giving you the idea of a Chipotle franchise? In case you missed it, back in April of 2018 Chipotle CEO Brian Niccol made headlines after suggesting Chipotle might reconsider franchising in the future. This, however, hasn’t come to fruition yet. But if it does happen, you’ll be better prepared to pounce on the opportunity after reviewing this analysis. If you don’t want to wait, take our quiz to be matched with business opportunities that are available to franchisees right now.
- How Much Would A Chipotle Cost To Open? (Estimate)
- Qdoba VS Chipotle: The Ultimate Burrito Battle Royal
- What’s The Profit Margin Of Chipotle?
- What Makes The Operations Of Chipotle So Appealing?
- What Are Some Franchise Alternatives To Chipotle?
How Much Would A Chipotle Cost To Open? (Estimate)
Under this market analysis, I examine Chipotle’s revenue, earnings, and other financial information to make an educated guess as to what it would actually cost to open a franchise. In the rare event that the corporation chooses to reopen franchise opportunities, you’ll have a better understanding of the business operations.
- Chipotle Mexican Grill’s sales for the fiscal year ended December 31, 2021, was at $7.547 billion, a 26.11 percent increase from the previous year.
- Chipotle Mexican Grill’s yearly sales in 2021 was $7.547 billion, a 26.11 percent increase over the previous year.
- Chipotle continues to prove that they have pricing power even after ingredient, shipping and labor expenses increase. Chipotle increased their menu prices across the board by 4% and found consumers were willing to pay for it.
Financial Requirements and Fees
Since Chipotle does not provide opportunities for franchising, I can’t share fees or requirements with it. What I can do though is provide you with a look into the startup cost to open Chipotle’s direct competitors to offer clues.
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Moe’s Southwest Grill
Qdoba VS Chipotle: The Ultimate Burrito Battle Royal
Between the two companies, Qdoba shares a lot of similarities with Chipotle especially in terms of what both companies went through in the past. Both are burrito eateries that initially opened their doors in the 1990s: Chipotle in 1993 and Qdoba in 1995. These restaurants launched their initial locations in Denver, Colorado. Both have headquarters stationed in Southern California: Chipotle in Newport Beach while Qdoba is in San Diego.
Both firms have a history of taking investment dollars from large burger chains. McDonald’s invested in Chipotle, and Qdoba was bought by Jack in the Box in 2003. Eerily familiar don’t you think?
Here are some fast facts about Qdoba:
- Year Established: 1995
- Headquarters: San Diego, CA
- Number Of Units: 755 (as of March 21, 2022)
- Franchising Since: 1997
- Initial Investment: $871,000 to $2,034,000
Moe’s Southwest Grill
Taco Bell is perhaps the most popular Mexican restaurant on the Entrepreneur Franchise 500 ranking 8th on their list, Moe’s, despite placing 219th on the list looks the closest to Chipotle in my opinion. Nachos, quesadillas, tacos, and burritos are also all available at this restaurant franchise.
A Moe’s restaurant is more affordable than McDonald’s to open, however, this does not mean it’s “cheap.” The parent company, Focus Brands requires a net worth of $1,000,000 and liquid cash of at least $150,000. Here are some more facts about starting a Moe’s Southwest Grill.
- Year Established: 2000
- Headquarters: Atlanta, GA
- Number Of Units: More than 700 units globally
- Franchising Since: 2001
- Initial Investment: $475,000 to $1,100,000
What’s The Profit Margin Of Chipotle?
As of December 31, 2021, Chipotle Mexican Grill’s net profit margin was 8.65%. Profit margin is, of course, a constantly moving metric in the restaurant industry. Each quarter, a different number will be reported because ingredient and shipping costs are always in flux.
Related Reading: How Much Does a Little Caesars Cost? (My Unfiltered Answer)
Fast-casual restaurants often termed as fast food or quick-service restaurants (QSRs), allow customers to order at a counter and perform self-service tasks. This cuts down on the amount of labor you need in a store. While factors such as franchise membership influence profit margin, fast-casual restaurants normally have a profit margin of 6-9 percent on average.
The data shows Chipotle Mexican Grill’s (CMG) present and average gross margin, operating margin, and net profit margin over the previous ten years. Upon deducting expenses, the profit margin is measured as the percentage of sales retained as income by a corporation.
What Makes The Operations Of Chipotle So Appealing?
Chipotle Mexican Grill is a Mexican grill restaurant with a small menu and a lot of meal customization options. The company initially opened its doors in 1993 and now has over 1700 locations in the United States and throughout the world.
In the early 2000s, McDonald’s owned a controlling stake in the restaurant but sold it after Chipotle’s first public offering (IPO) in 2006. Chipotle’s stock has climbed from $42 to over $650 since its IPO and is still regarded as a long-term investment.
A Small Menu With A Lot Of Options
Chipotle’s modest menu is one of the reasons for its success. There are three advantages to having a limited menu. Initially, because Chipotle only stores fresh produce, food waste is always a