Can You Finally Open a Chipotle Franchise in 2022? (Cost Analysis)
The Chipotle franchise is impossible to miss with more than 2,819 locations. There are numerous locations of this Mexican restaurant franchise not only in the United States but also in Canada, Germany, the United Kingdom, and France.
Many people view it as nutritious fast food because it contains portions of grains and vegetables.
The company offers food free of artificial preservatives, tastes, and colors. Chipotle promotes the use of fresh ingredients and upholds the phrase “food with integrity.”
How Much Does it Cost to Open a Chipotle Franchise in 2022
Chipotle once permitted franchises for their restaurants, however, the program was discontinued in 2006.
Because they don’t want to “damage the experience” of its customers, Chipotle does not currently permit anyone to franchise their restaurant.
As a corporate body, you give up some control when working with franchisees.
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Financial Requirements and Fees
Chipotle doesn’t charge any fees because it doesn’t provide a franchise opportunity.
With that said, let’s look at what similar concepts like Qdoba and Moe’s Southwest Grill charge by comparing their prices.
|
Fees/Expenses |
Financial Amount |
|
Total Investment |
$800,000 – $1,000,000 |
|
Franchise Fee |
$20,000 to $75,000 |
Average Sales per Year
Chipotle reported $2.2 million in average annual sales per location. The average sales per store in 2019 were exactly in line with this figure.
On the other hand, their global revenue is close to $6 billion, which is thought to be Chipotle’s biggest record ever with a sales growth of 7.13%.
This is a remarkable average shop performance, to put this sales total into perspective.
Consider the restaurant chain Steak ‘n Shake, which has yearly sales per outlet of little over $1 million.
Numerous franchise opportunities would be happy to reach the annual gross sales benchmark of $1 million.
How Much Does Chipotle Make in Profit?
Chipotle made $6 billion in sales in 2020. Chipotle had a profit margin of 9.93% as of June 2021.
Every quarter over the past couple of years, the company has reported quarterly earnings that are higher than expected.
According to the company’s performance this year, it may complete the year with a profit of more than $595 million.
Although the lockdown during the pandemic had an impact on Chipotle’s sales, the business emerged from the health issue stronger than ever.
Prior to the pandemic, Chipotle saw a 24.8% increase in revenue between 2017 and 2019.
Chipotle Franchise Facts
|
Total Units |
2,819 |
|
Incorporated Name |
Chipotle Mexican Grill Inc. |
|
Franchising Since |
Does Not Allow Franchising |
|
Industry |
Restaurant |
|
Subsector |
Quick Service |
Chipotle was founded in Denver, Colorado, in 1993.
After quitting his job as a line cook in San Francisco, Steve Ells launched the restaurant franchise with a debt of $85,000 from his father.
Ells and his father estimated that they would need to sell 107 burritos per day in order for their business to be profitable.
A month later, Chipotle was already averaging daily sales of 1,000 burritos.
In 2005, Chipotle went from 16 restaurants to 500 restaurants, thanks to their funding.
Interesting Chipotle Franchise Facts
McDonald’s sold its stake in Chipotle in 2006. The business later purchased all the franchisees back and took ownership of them.
In 2020, Fortune’s list of the world’s most admired companies places Chipotle at number four.
With over 412 locations, California has the most Chipotle restaurants. Former Taco Bell CEO Brian Niccol is in charge of the company’s strategy as of March 2018.
Advantages of a Chipotle Franchise
We are aware that you cannot run a Chipotle. Here are a few benefits you could take advantage of, though, if you ever had the chance.
1. Digital Ordering
Chipotle has been able to benefit from internet ordering, much like other market leaders like Starbucks.
Chipotle witnessed a 177.2% growth in online orders in 2020, generating $781.4 in revenue.
Customers are starting to understand the benefits of placing an order in advance through an app.
In addition to increasing sales, the corporation can use an online loyalty program to increase long-term digital sales.
Chipotle is in a strong position relative to its competitors in terms of digital marketing.
2. Simple Menu
Despite offering a huge variety of toppings, Chipotle’s menu is rather straightforward.
Customers select their preferred grain, bean, and topping options before deciding whether they want a burrito, burrito bowl, taco, or salad.
Should patrons bring their kids there to eat, they also have a kid’s meal available with the same ingredients.
3. Healthy Version of Fast Food
Chipotle is a fast-food restaurant. However, it’s healthier than other restaurants because the cuisine is less fatty and prepared in front of guests.
Although it is provided quickly, the cuisine is better for you than the alternative.
There are several vegetarian food alternatives available and only fresh ingredients are used by the company.
Since Chipotle doesn’t have a freezer, everyone is aware that the ingredients on the menu were just delivered.
If you can manage a Chipotle, you may draw in a large number of customers who are health-conscious.
4. Popularity
Because Chipotle is so well-known, little advertising is necessary to attract customers.
With stores across the United Kingdom, Canada, France, and Germany, the idea is well-known on a global scale.
One day, the restaurant may be as well-known and well-liked as any fast-food establishment you can imagine.
Drawbacks of Chipotle Franchise
Managing a firm, even a franchise, does not ensure a seamless operation from start to finish.
There will be difficulties, therefore it’s best to be aware of them before attempting to overcome one.
Here are a few things that we think will be difficult for Chipotle.
1. Competition
Theoretically, it shouldn’t be too difficult to duplicate Chipotle.
After all, there are many wonderful taco shops out there, as anyone who has lived in Southern California knows.
They are a company that sells Mexican food at the end of the day. Having said that, ideas like QDOBA have yet to generate even $1 billion in yearly sales.
In principle, Chipotle should be simple to duplicate, but the company has repeatedly shown that it can execute better than anybody else in the sector.
2. Keeping it Fresh
The aim here is to sell as much as you can for the day so there are no leftovers since Chipotle is recognized for using fresh ingredients every day.
The leftover meat is thrown out at the end of the day, according to a former Chipotle employee.
Food waste and costs could soar if the number of clients for this concept ever decreased.
3. Past Outbreaks
Unfortunately, Chipotle has received a lot of negative press due to E-Coli outbreaks throughout the years.
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The company’s reputation has been damaged, and this has hurt sales.
More so, the past still haunts some people, despite the fact that they’ve managed to regain their footing and then some.
Is Chipotle Franchise Good for You?
If Chipotle permits franchises to participate in the company once more, that might be a tempting prospect.
Should you be given permission to a franchise, it seems to be a successful business.
Additionally, it has become stronger over time and continues to be resilient in the face of pandemics and other outbreaks.
If you have the money to spare and a desire to offer freshly prepared Mexican food, it’s a business worth starting.
Alternative Chipotle Franchise
Alternatively, you can visit Moe’s Southwest Grill or QDOBA Mexican Eats if you can’t wait for Chipotle to resume taking franchise applications.
Both restaurants offer the same food as Chipotle. The franchise price for Moe is $30,500, while the fee for QDOBA is $30,000.
With the help of this manual, you’ll undoubtedly be equipped to manage a Chipotle franchise should the opportunity arise.
Conclusion
Despite the fact that Chipotle may not now provide franchises, it is obvious that the company is a major player with a significant market value.
Any additional franchise in the article might be of interest to you. If not, be sure to look into further companies in the food and beverage sector.
