Chipotle 2006 Annual Report Download - page 29

Promoting from Within. During 2006, we focused on ensuring our employee practices are as exceptional as
our food. In an effort to achieve this, we initiated the Restaurateur program which is designed to encourage the
restaurant manager position as a career opportunity for our top performing restaurant managers. In addition to
excelling in providing quality food and customer service, restaurant managers are expected to contribute
substantially to the development of their crew. Restaurateurs’ compensation is partially dependent on achieving
these expectations. As a result, we expect this program will help us retain top performing restaurant managers.
We currently have exceptional managers in the program, and we expect to promote more managers to
Restaurateurs during 2007.
We have seen that restaurant managers who were previously crew members operate better restaurants and
are less likely to leave the company. Therefore, in addition to the Restaurateur program, we have created a new
restaurant staffing structure to facilitate the development of crew members into restaurant managers. One
primary goal of the new structure is to increase the number of restaurant managers hired from within our
company and lower restaurant manager turnover. We implemented the new staffing structure in over 50% of our
restaurants during 2006 and the remaining restaurants are expected to be converted in 2007.
While we are still early in the programs, we have seen some positive results. Over half of the restaurant
manager positions we filled in 2006 were staffed with internal promotions, up from 31% in 2005. Our turnover
among restaurant management has decreased approximately 12% in 2006. We have not seen the full impact of
the initiatives in our financial results in 2006, as implementing the Restaurateur program and the new staffing
structure have resulted in incremental staff training and development costs. In 2007 and future years, we expect
these initiatives to result in a majority of restaurant managers being hired through internal promotions.
Throughput. We deliver our best customer service and hottest food when the line moves efficiently. During
2006, we continued to emphasize increasing the number of customers we serve during our busiest hours. We
increased the number of fax and internet production lines in our restaurants which moved big orders off the front
line, made improvements in the line and equipment configurations, and emphasized optimal utilization of our
second cash register. We have seen success in this initiative through increased transactions during peak lunch and
dinner hours and shorter wait time. We plan to continue this focus into 2007, including installing change
machines in most of our restaurants as well as evaluating other equipment configurations and technological
process improvements.
Food With Integrity. During 2006, in addition to continuing to serve naturally raised pork in all of our
restaurants, we made progress with our Food With Integrity initiative by increasing the amount of naturally
raised beef and chicken we serve in our restaurants. In addition, now all of the sour cream we buy is made from
milk that comes from cows that are not given growth hormones to stimulate milk production. We also continue to
investigate the use of more sustainably grown produce and produce that is locally grown.
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