Chipotle 2008 Annual Report Download - page 5

PART I
ITEM 1. BUSINESS
General
Chipotle Mexican Grill, Inc. (“Chipotle”, the “Company”, or “We”) operates 837 restaurants in 33 states
throughout the United States, the District of Columbia, and Toronto, Canada as of December 31, 2008. Our
restaurants serve a focused menu of tacos, burritos, salads and burrito bowls (a burrito without the tortilla), made
using fresh ingredients. People outside our company tend to categorize us as a “fast casual” concept—restaurants
that are a step up from traditional fast food, but not casual, sit-down places. We’ve never worried much about
what category we’re in. Instead, we remain focused on trying to find the highest quality ingredients we can to
make great tasting food; on recruiting and retaining top performing people to ensure that the restaurant
experience we provide is exceptional; and on building restaurants that are operationally efficient, aesthetically
pleasing and on doing all of this with increasing awareness and respect for the environment.
Chipotle began with a simple philosophy: demonstrate that food served fast doesn’t have to be a traditional
“fast-food” experience. Over the years, that vision has evolved. Today, our vision is to change the way the world
thinks about and eats fast food. We do this by avoiding a formulaic approach when creating our restaurant
experience, looking to fine-dining restaurants for inspiration. We use high-quality raw ingredients, classic
cooking methods and a distinctive interior design and have friendly people to take care of each customer—
features that are more frequently found in the world of fine dining. Our approach is also guided by our belief in
an idea we call “Food With Integrity”. Our objective is to find the highest quality ingredients we can—
ingredients that are grown or raised with respect for the environment, animals and people who grow or raise the
food.
We manage our operations and restaurants based on five regions that all report into a single segment.
Financial information about our operations, including our revenues and net income for the years ended
December 31, 2008, 2007, and 2006, and our total assets as of December 31, 2008 and 2007, is included in our
consolidated financial statements and accompanying notes in Item 8, “Financial Statements and Supplementary
Data”.
Our predecessor corporation, World Foods, Inc., was founded in Colorado in 1993. McDonald’s
Corporation made an equity investment in us in February 1998, becoming our majority shareholder, and
simultaneous with McDonald’s initial investment in us, World Foods, Inc. merged with Chipotle Mexican Grill,
Inc., a newly-formed Delaware corporation. We completed our initial public offering of class A common stock in
January 2006. McDonald’s sold a portion of its interest in us in the initial public offering, sold an additional
portion of its interest in us in a secondary offering of class A common stock in May 2006, and disposed of its
remaining interest in us in an exchange offer to its shareholders that was completed in October 2006. As a result
of the completion of the McDonald’s exchange offer, we now have two publicly-traded classes of common stock,
class A and class B, and McDonald’s no longer owns any interest in us.
Our Menu and Food Preparation
A Few Things, Thousands of Ways. We serve only a few things: burritos, burrito bowls, tacos and salads.
But because customers can choose from four different meats, two types of beans and a variety of extras such as
salsas, guacamole, cheese and lettuce, there’s enough variety to extend our menu to provide countless choices.
We plan to keep a focused menu, but we’ll consider additions that we think make sense. And if you can’t find
something on the menu that’s quite what you’re after, let us know. If we can make it from the ingredients we
have, we’ll do it.
In preparing our food, we use gas stoves and grills, pots and pans, cutting knives, wire whisks and other
kitchen utensils, walk-in refrigerators stocked with a variety of fresh ingredients, herbs and spices and dry goods
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Annual Report