Chipotle 2008 Annual Report Download - page 11

similar terms and phrases, including references to assumptions, in this report to identify forward-looking
statements. These forward-looking statements are made based on expectations and beliefs concerning future
events affecting us and are subject to uncertainties, risks and factors relating to our operations and business
environments, all of which are difficult to predict and many of which are beyond our control, that could cause our
actual results to differ materially from those matters expressed or implied by these forward-looking statements.
Such risks and other factors include those listed in this Item 1A. “Risk Factors,” and elsewhere in this report.
When considering these forward-looking statements, you should keep in mind the cautionary statements in
this report and the documents incorporated by reference. New risks and uncertainties arise from time to time, and
we cannot predict those events or how they may affect us. We assume no obligation to update any forward-
looking statements after the date of this report as a result of new information, future events or developments,
except as required by applicable laws and regulations.
Increasing our sales and profitability depends substantially on our ability to open new restaurants and is
subject to many unpredictable factors.
There were 837 Chipotle restaurants as of December 31, 2008. We plan to increase the number of our
restaurants significantly in the next three years, and plan to open between 120 and 130 new restaurants in 2009.
However, we have in the past experienced delays in opening some restaurants and that could happen again as a
result of any of the following factors:
• our potential inability to locate and secure new restaurant sites in locations that we believe to be
attractive;
• delay or cancellation of new site development by developers and landlords, which may become more
common during 2009 as a result of the difficult economic environment and tight credit markets;
• difficulty managing construction and development costs of new restaurants at affordable levels,
particularly in competitive markets;
• obstacles to hiring and training qualified operating personnel in the local market;
• any shortages of construction materials and labor;
• difficulty negotiating leases with acceptable terms;
• lack of availability of, or inability to obtain, adequate supplies of ingredients that meet our quality
standards;
• failures or delays in securing required governmental approvals (including construction, parking and
other permits); and
• the impact of inclement weather, natural disasters and other calamities, such as hurricanes Katrina and
Rita in 2005.
One of our biggest challenges is locating and securing an adequate supply of suitable new restaurant sites.
Competition for those sites in our target markets can be intense, and development and leasing costs are increasing
(particularly for urban locations). Delays or failures in opening new restaurants due to any of the reasons set forth
above could materially and adversely affect our growth strategy and our expected results. Moreover, as we open
and operate more restaurants our rate of expansion relative to the size of our restaurant base will decline, which
may in turn slow our profitability growth.
Our progress in opening new restaurants from quarter to quarter may also occur at an uneven rate, which
may result in quarterly sales and profit growth falling short of market expectations in some periods. Similarly,
our growth strategy and the substantial investment associated with the development of each new restaurant (as
well as the impact of our new restaurants on the sales of our existing restaurants) may cause our operating results
to fluctuate and be unpredictable or adversely affect our profits.
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Annual Report