Chipotle Isn't Franchising … Yet. Here's What You Can Do in the Meantime.
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New Chipotle CEO Brian Niccol made news in April when he implied that Chipotle franchise might consider franchising going forward. Up until now, the burrito chain has owned its own stories, buying back in 2006 the handful of franchises it had previously sold to become 100-percent corporate owned. While this news may be refreshing for some potential franchisors, the company hasn’t yet announced how investors can go about franchising its restaurants. At the moment, you can’t even run a licensed store the way you might be able to do with a company like Starbucks.
In the meantime, it may make sense to look for alternatives. There are plenty of options from the Entrepreneur Franchise 500 that might make sense for you.
McDonald's is an easy choice for this list for two simple reasons. First, it’s the No. 1 company on our Franchise 500. Second, it invested in Chipotle for years.
According to Kate Taylor’s piece for Entrepreneur, McDonald’s early investment in the Mexican restaurant allowed Chipotle to grow without franchising.
“Instead of growing capital by selling franchise opportunities in the late 1990s and early 2000s, founder Steve Ells turned to his professional and personal networks for financing. Outside of Ells' friends and family, Chipotle's other major investor was McDonald's,” she writes. “The burger chain made its first investment in 1998 and, by 2001, was the majority shareholder. The investment helped provide much of the capital that would ultimately allow Chipotle to set itself apart from traditional fast-food chains.”
McDonald’s divested in Chipotle in 2006, but it’s just a good franchise (there’s a reason it’s No. 1). If you have interest in learning more about investing in the Golden Arches, you can do so by visiting McDonald's franchising website.
- CEO: Steve Easterbrook
- Business headquarters: Oak Brook, Ill.
- Franchising since: 1955
- Initial investment: $1,008,000 to $2,214,080
- Initial franchise fee: $45,000
- New units in 2017: 507 units (1.4 percent)
- Training: 6 to 24 months on the job, 75 hours in the classroom
- Marketing support: Co-op advertising, ad templates, national media, regional advertising, social media, loyalty program/app
2. Moe’s Southwest Grill
Taco Bell (ranked 8th) might be the top Mexican restaurant on the Entrepreneur Franchise 500, but Moe’s (ranked 219th) might be the most similar to Chipotle stylistically. The restaurant chain offers burritos, tacos, nachos and quesadillas.
The cost of a Moe’s restaurant tends to be more affordable than a McDonald’s, but that doesn’t mean it’s inexpensive. The Focus Brands company still requires a net worth of $1,500,000 and liquid cash upward of $500,000.If that applies to you, you can learn more about franchising here.
- CEO: Bruce Schroder
- Business headquarters: Atlanta, Ga.
- Franchising since: 2001
- Initial investment: $368,930 to $956,400
- Initial franchise fee: $30,000
- New units in 2017: 16 units (2.4 percent)
- Training: 125 hours on the job, 22.6 hours in the classroom
- Marketing support: Co-op advertising, ad templates, national media, regional advertising, social media, SEO, website development, email marketing loyalty program/app
Qdoba and Chipotle are very similar. Both are burrito restaurants that opened in the 90s -- Chipotle was founded in 1993, while Qdoba was founded in 1995. Both companies opened their first restaurants in Denver, Colo, and both companies have headquarters in southern California -- Chipotle in Newport Beach, Qdoba in San Diego.
Both companies also have a history of investments from burger chains. McDonald’s invested in Chipotle, while Jack in the Box acquired Qdoba in 2003.
If you want to take a deeper dive into the company, you can learn more on its franchising page.
- CEO: Leonard Comma
- Business headquarters: San Diego, Calif.
- Franchising since: 1997
- Initial investment: $871,000 to $2,034,000
- Initial franchise fee: $30,000
- 1-year growth in new units: 40 units (5.8 percent)
- Training: 179 hours on the job, 37 hours in the classroom
- Marketing support: National media, regional advertising, social media, SEO, website development, loyalty program/app