![Today we will be diving into Chipotle, the fast-casual food chain known for its burritos. We discuss Chipotle's origin stories, its hypergrowth, and its focus on simplicity and innovation. We'll also go into detail about how they navigated COVID and their national food safety outbreaks. <br /> <br />To help me break down Chipotle, I'm joined by Zack Fuss, an investor at Continental Grain and an expert on all things food and restaurant-related.<br /> <br />For the full show notes, transcript, and links to mentioned content, check out the episode page here: https://www.joincolossus.com/episodes/24297915/fuss-chipotle-simplicity-as-the-recipe-for-success<br /> <br />-----<br />Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.<br /> <br />Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.<br /> <br />Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss<br /> <br />Show Notes<br />[00:00:00] - Introduction<br />[00:03:13 ] - [First question] - What is Chipotle<br />[00:04:24] - Chipotle’s scale compared to its competitors<br />[00:05:36] - The origin story of Steve Ells and Chipotle<br />[00:06:47] - Carving out the fast-casual restaurant niche<br />[00:09:02] - Unique themes that have been carried into today<br />[00:10:22] - Unit economics in fine dining versus fast-casual dining<br />[00:11:56 ] - Gross margins and their similarities across establishments<br />[00:14:53] - An ideal payback period for a restaurant<br />[00:16:00] - What allows for Chipotle to have such an optimized payback period<br />[00:18:29] - Owned and operated versus franchised <br />[00:20:49] - Pros and cons to franchising or being an owner-operator <br />[00:22:11] - Key factors to consider when choosing to franchise or not<br />[00:23:31] - Chipotle taking $350 million in growth capital from McDonald’s<br />[00:25:58] - Differences between McDonald’s and Chipotle’s food<br />[00:27:08] - The E Coli outbreak in late 2015 <br />[00:28:17] - Sweetgreen, Cava, Zoes Kitchen, Noodles & Co.<br />[00:30:09] - Pershing Square’s investment in Chipotle post-outbreak <br />[00:31:51] - Technology and its effects on the restaurant industry<br />[00:33:39] - Digital orders and profit margin variance<br />[00:35:53] - Launching a Digital-Only quesadilla menu item<br />[00:36:33] - Internet aggregators, dark kitchens, and future food tech trends<br />[00:39:52] - How Chipotle beat out Qdoba<br />[00:41:32] - Blaze Pizza, Tasty Made, Panda Express <br />[00:43:38] - Dark kitchens and network expansion<br />[00:45:01] - Lessons builders can take away from Chipotle’s story<br />[00:45:01] - Lessons investors can take away from Chipotle’s story<br /><br />#businessbreakdowns #chipotle](https://media.thebusinessprofessor.com/wp-content/plugins/youtube-feed-pro/img/placeholder.png)
Today we will be diving into Chipotle, the fast-casual food chain known for its burritos. We discuss Chipotle’s origin stories, its hypergrowth, and its focus on simplicity and innovation. We’ll also go into detail about how they navigated COVID and their national food safety outbreaks.
To help me break down Chipotle, I’m joined by Zack Fuss, an investor at Continental Grain and an expert on all things food and restaurant-related.
Show Notes
[00:00:00] – Introduction
[00:03:13 ] – [First question] – What is Chipotle
[00:04:24] – Chipotle’s scale compared to its competitors
[00:05:36] – The origin story of Steve Ells and Chipotle
[00:06:47] – Carving out the fast-casual restaurant niche
[00:09:02] – Unique themes that have been carried into today
[00:10:22] – Unit economics in fine dining versus fast-casual dining
[00:11:56 ] – Gross margins and their similarities across establishments
[00:14:53] – An ideal payback period for a restaurant
[00:16:00] – What allows for Chipotle to have such an optimized payback period
[00:18:29] – Owned and operated versus franchised
[00:20:49] – Pros and cons to franchising or being an owner-operator
[00:22:11] – Key factors to consider when choosing to franchise or not
[00:23:31] – Chipotle taking $350 million in growth capital from McDonald’s
[00:25:58] – Differences between McDonald’s and Chipotle’s food
[00:27:08] – The E Coli outbreak in late 2015
[00:28:17] – Sweetgreen, Cava, Zoes Kitchen, Noodles & Co.
[00:30:09] – Pershing Square’s investment in Chipotle post-outbreak
[00:31:51] – Technology and its effects on the restaurant industry
[00:33:39] – Digital orders and profit margin variance
[00:35:53] – Launching a Digital-Only quesadilla menu item
[00:36:33] – Internet aggregators, dark kitchens, and future food tech trends
[00:39:52] – How Chipotle beat out Qdoba
[00:41:32] – Blaze Pizza, Tasty Made, Panda Express
[00:43:38] – Dark kitchens and network expansion
[00:45:01] – Lessons builders can take away from Chipotle’s story
[00:45:01] – Lessons investors can take away from Chipotle’s story