With Chipotle’s namesake brand still struggling to win back customers, the company is halting development of its secondary concept, 15-unit ShopHouse Southeast Asian Kitchen, while deciding what to do with the venture.
But the company is proceeding with plans to try a burger and fries concept while continuing to develop its fast-casual pizza venture, Pizzeria Locale.
Executives explained to investors that the unit-level return on ShopHouse does not warrant more investment in the brand. Chipotle co-CEO and founder Steve Ells said “the exotic ShopHouse cuisine” failed to draw loyal customers and repeat business. He stressed that the concept was tried in three separate markets and 15 locations before the decision was reached.
Chipotle took a $14.5 million write-off for the brand in the third quarter.
In the process, Ells continued, the company learned that its fast-casual model would work with the right cuisines, like pizza and burgers.
The chain is expected to open a new venture, a burger concept called Tasty Made, in Ohio sometime this fall.