Chipotle: Unit Expansion and People Development

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Do you mean in the period before the food safety crisis?

However, when Chipotle began expanding aggressively, the pace of new restaurant openings outstripped the internal development of talent. This led to some mistakes, including lapses in food safety practices, which unfortunately resulted in some people getting sick. As a result, Chipotle had to slow down its expansion temporarily to address these issues. During this period, the company started hiring managers from outside the organization, which proved to be somewhat inconsistent in terms of results.

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Do you mean in the period before the food safety crisis?

Fast forward to today, and one of the challenges Chipotle is facing is the rapid pace of its new restaurant openings. When you're opening 300 to 350 restaurants a year, a critical issue that isn’t being discussed enough is the need for seasoned managers. For each new restaurant, you need five to seven experienced managers, not new or inexperienced ones. The exact number of managers required depends on the expected average unit volume (AUV) of the restaurant. For instance, a restaurant in Manhattan projected to generate $3 million in AUV right away might need six or seven managers. On the other hand, a location expected to start with $2 to $2.3 million in AUV might only require five managers.

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Do you mean making the business more digital in general?

For instance, if you use $10,000 a day as an example, and $6,500 of that is in-restaurant sales and $3,500 is digital, you might think you need ten people. Someone unfamiliar with the business might think, okay, I need six and a half people to handle the $6,500 and three and a half people to manage the digital sales. However, that's not the case for the digital piece. I only need one and a half to two people to handle $3,500. I only need one and a half people because I don't need a cashier since it's already rung up. I don't need someone to take the order because guests have already done that. I don't have the friction of the interaction of you telling me what you want.

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