How Chipotle Rolled to Success

Obama-Chipotle-MemeStep into Chipotle during lunch or dinner hours (or after class), and you can almost guarantee a line that stretches far past their service counter. With articles such as one from Business Insider teaching consumers how to get more food for the same price and the story of President Obama committing the ultimate faux pas while ordering his burrito bowl, it’s safe to say Chipotle has become a cultural phenomenon.

Chipotle can contribute their success and expansion to several factors such as a clear brand message that commits to serving fresh, healthy and natural food at affordable prices; however, depending on external funds by franchising their restaurants isn’t one of them.

Several of the most successful restaurant chains can credit franchising to their rapid growth including Subway, McDonald’s, Dunkin Donuts, Starbucks, KFC, Dairy Queen and Buffalo Wild Wings.

With just around 1,600 locations, which pale in comparison to many popular franchises (Subway has 43,000 locations), why hasn’t Chipotle considered franchising?

The answer is simple. They don’t need nor do they want to. So how have they managed to succeed among the sea of franchises?

One of Chipotle’s greatest contributing factors lie within their management approach called the restaurateur program.

Starting in 2005, shortly before their divesture from the McDonald’s Corporation, the company implemented a system that heavily relies on internal promotion to motivate their employees and provide opportunity for career growth beyond most fast food corporations. The same year the restaurateur program was initiated, it was quoted that 20% of managers gained their position through the program. As of 2013, 86% of salaried managers and 96% of hourly managers were internally promoted.


A general manager can only rise to the rank of being a restaurateur based on their performance of how well they manage their restaurant and staff. After being selected, restaurateurs make well over $100,000 and are given a $10,000 one-time bonus, stock options, a company car and an additional $10,000 for each of their crew members that are promoted to general manager.

I think employee motivation is a crucial factor that’s often overlooked to successful operations management and have found it refreshing to learn that a company I frequent so often offers great employee incentives and benefits. In addition, not conforming to industry norms by trusting the skills of their employees to adjust recipes such as if a crate of jalapeños is hotter than usual, in my opinion, creates a superior product, service and experience. Do you think Chipotle chose the right track by not franchising their restaurants?

On the other hand, it takes more than a management handbook to keep a system running smoothly. Recently, a Chipotle near Penn State University experienced almost their entire management and crew resign citing near sweat-shop working conditions due to understaffing. This forced operations to shut down. Do you think this was an isolated incident by poor management at this particular location or are there bigger problems within the Chipotle Corporation?

Overall, what do you think of Chipotle’s restaurateur program?


13 thoughts on “How Chipotle Rolled to Success

  1. I did not know that Chipotle had a restaurateur program. I think having a leadership program for employees is a great way to motivate. I really like the idea of having employees work their way to the top, because once they do become a manager or team director, they understand the business inside and out.

    In regards to the question about the Chipotle near Penn State, I think that was probably an isolated incident by poor management. With 1600 locations nationwide, there is bound to be one instance of a location not operating to standards. Every time I go into Chipotle I know I am going to wait in line for about 5 minutes, but that just means that Chipotle is doing things right!

  2. In my opinion, the restaurateur program sounds great! Many times, people don’t want to work at chain restaurants or retail stores because the work can be boring and monotonous and you usually begin making minimum wage. It sounds like Chipotle does a decent job at motivating their employees by giving them many opportunities for upward mobility and benefits in the company.

    I agree with Jessica in regards to the location near Penn State. When a chain has over 1,600 locations, there is bound to be an instance where people aren’t happy or are getting treated poorly on the job. In this case, Chipotle should make it their goal to eliminate issues of understaffing, etc in order to ensure that their employees are happy and working towards the goals of the company.

  3. Chipotle absolutely chose the right decision not to franchise. Service at franchise restaurants is so varied that I often choose not to go into a Dunkin’ Donuts or or Buffalo Wild Wings because I had a bad experience there. Giving line level workers the opportunity to climb the ladder in the business is great for motivation. It’s also good when hiring people because the pool will be people who want to climb the ladder, which will make for great line level employees. As a hospitality major, I know it’s also incredibly important to gain experience at the line level jobs and work your way up in order to run a truly successful business.

    I agree with the above comments about the Penn State Chipotle that it probably was just an isolated incident. Another factor to consider is that even though they were understaffed, they were probably incredibly busy being located near a campus with a large student body. Corporate should be aware of these situations, though, and attempt to help busier stores like that one.

  4. I think the decision to not franchise is very smart on Chipotle’s part. The company has a very uniform set of values and rules, that are sometimes lost within an organization due to franchising. As for the intrinsic motivation of managers getting potential promotions, as a management major I think that is the most effective kind of motivation to get your employees to do their job well. As for the Chipotle that was located by Penn State, I think that there should be a cooperate set regulation of how many employees should be on staff at all times. It all depends on the location of how many employees you need at certain times of the day, however there should be more employees on staff that could be called in.

  5. Chipotle has done extraordinarily well by not franchising, so they were right to go against the fast food chain norm. I love their ingenuity with the restaurateur program; I believe it is a great way to motivate employees, and have employees strive for an attainable and lucrative goal. I think it is fantastic that they promote from within because that shows that the loyalty of employees is paying off. I also appreciate the fact that employees being promoted internally get to experience cross training in all positions.

    As for the incident at the Penn State Chipotle, I am hoping it is an isolated case. However, if not, this needs to be addressed by Chipotle. When a business has an alleged sweatshop accusation, that’s a HUGE problem, and should be rectified immediately. This could be a domino effect with other Chipotle chains coming forward with more issues and accusations.

  6. Seeing how well Chipotle is operating, I think Chipotle chose the right decision to not franchise. They would not have as much control, which could change the way Chipotle is portrayed. The restauranteur program is very interesting. This is actually the first time I’ve heard of it. I think if more restaurants in the fast food industry went in this program, they could see improvements.

    From my perspective, I think if any Chipotle’s were understaffed, it could be seen as a sweat-shop condition. I hope to believe that this is an isolated incident, because Chipotle holds is image so strong as a company.

  7. Very interesting article! You would have to be living under a rock or completely separated from society to not take notice of Chipotle’s steady but undeniable rise to fame. I also find their restauranteur process very intriguing, and I believe that their motto of “building/promoting from within” is very admirable. Because they do not select managers/owners from outside the firm, they can rest assured that the people running the stores and various locations know the business and have started from the ground up. I have also noticed that Chipotle has often advertised signs of when they have run out of a certain type of meat, in particular steak, when in high-demand or low-supply. This is very interesting to note because it means that if they cannot consistently use the same organically-fed, grass-grown cattle for their meat, they won’t resort to using other less-safe alternatives. It is very respectable that they stay true to their brand of healthy and affordable food. Great Article!

  8. I think its an awesome idea. Hitting a ceiling without any more upward potential is a huge factor for anyone in any job, I would imagine its comparatively bigger of a problem for the food industry. At most other restaurants, there really isn’t a path to follow that leads to where you want to advance to. Having something to shoot for will always bring the best out of people and it sounds like Chipotle has found a way to get that done.

  9. I really like your post. It’s awesome that Chipotle promotes from within for so many reasons. People who have been working there for a while simply understand the operation from every aspect. There is no other way to learn that kind of experience. Also, I feel like the employees at Chipotle at any level feel motivated by their possibility of moving up. I’m surprised how much money they make. People really love burritos. I’m interested to see how Chipotle grows in the future. They’re definitely a market leader in the fast food industry.

  10. Great post. I think Chipotle has been the model for what it takes to be a successful fast food restaurant. Also by giving their employees the opportunity of being able to move up they will want to stay with them for as long as they can. As for the incident that happened near Penn State I believe its an isolated incident. Chipotle has a very good reputation and I wont judge them based on one event.

  11. That is such an amazing program no wonder Chipotle restaurants have such efficient service. It is a great incenvite for employees to strive for greatness, more employers should implement a program similar to improve customer service.

  12. I think that Chipotle did a amazing job by not franchising their business. There are a ton of issues that arise when a company decides to franchise their business. A lot of times when a company decides to franchise itself it often loses control over their managerial aspect. That being said; management changes and the company culture also alters to fit the new management staff. A company like Chipotle having the image of being “fresh, healthy, and sustainable”; can make it pretty difficult to live up to the image. I think that in order for Chipotle to maintain its image they need to keep control of their brand and keep their culture consistent.

  13. I agree with many of the other comments about Chipotle not franchising their business. The company is already doing great against leading competitors and should not have to worry about the more issues that come along with franchising–decline in quality of managers and their intended restaurant experiment. Personally, I am not worried about Chipotle and their affordable, build-your-own, fast food style. With the organization doing so well already, there is no need for such change.

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