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Why did Chipotle really move to California?

Also, JAB probably won’t buy Starbucks, and Papa John’s looks at a new logo, says RB’s The Bottom Line.
Photograph courtesy of Chipotle

The Bottom Line

Three things I’m thinking about as I try to get Taco Bell’s “seasoned beefings” greeting out of my head.

Yeah, Chipotle moved for Brian Niccol

In March, Chipotle Mexican Grill named Taco Bell CEO Brian Niccol to replace Steve Ells as the company’s chief executive.

In May, Chipotle announced plans to move the company’s headquarters from Denver to Newport Beach, Calif. The company said the move would help it “in the competition for top talent.”

But speculation since has been that Niccol’s hiring and the headquarters move were intricately connected. Niccol lives in Southern California, and many felt that the company agreed to move headquarters at least in part to get the executive that it wanted. Also, the location is close to Taco Bell, from which Niccol could theoretically recruit workers.

So this should probably come as a surprise: The Wall Street Journal this week reported, in a story about companies willing to pay up to lure top executives, that it was Niccol’s family concerns that led to the company’s move, at least in part.

Specifically, the story said that Niccol’s wife didn’t want to uproot the couple’s children. Chipotle’s board, interested in getting its desired chief executive, agreed to move the company’s headquarters to California.

For its part, the company denied that Niccol’s family considerations prompted the move. And there are other potential benefits. The move will change the company’s culture and could help it attract technology workers and others.

Niccol should be lauded for not wanting to uproot his family to take a job. I have two children and certainly wouldn’t put the stress of a cross-country move on them to advance my own career. Indeed, Americans are less willing, or able, to move for work. CEOs are no different.

But moving headquarters is risky. Chipotle is betting that its new CEO, and apparently a tech-savvy workforce, will be worth it.

Don’t count on JAB-Starbucks

JAB Holding Co. has been snapping up coffee companies in recent years, everything from small concepts such as Intelligentsia Coffee to the single-serve maker Keurig. In the restaurant space, it has paid high prices for chains such as Peet’s Coffee, Krispy Kreme and Panera Bread, amassing a sizable collection of morning-focused concepts.

So could it take on the biggest bean in the coffee business, Starbucks Corp.?

No.

“If anything, we would have tried to buy the whole company, including the store network,” Peter Harf, a JAB senior manager, told a German magazine this week, according to Reuters. “But Starbucks is worth up to $80 billion. That’s still a bit too big for us.”

Ah, but we know of another coffee chain that isn’t worth $80 billion. We won’t tell you the name, but it rhymes with “punkin’.”

Papa John’s or Papa Johns?

Ever since John Schnatter acknowledged saying a racial slur during a conference call, people have wondered whether Papa John’s would change its name. Doing so would be too complex. But the company is apparently planning something else: removing the apostrophe.

According to Ad Age, Papa John’s is considering the minor grammatical change in a new logo. Ad Age cited trademark filings submitted to the U.S. Patent and Trademark Office last month.

Papa Johns, of course, removes the notion that the chain belongs to “Papa John” Schnatter, and follows with the company’s new ad campaign highlighting the franchisees and employees behind the brand. But it wouldn’t go so far as to have to train customers on a new name.

And it wouldn’t be the first company to remove the possessive from its logo. It worked for Tim Hortons, after all.

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