Chipotle is opening a new restaurant every 24 hours and is well on its way to its 7,000-unit goal in North America.
With new markets, including most recently Mexico, coming into the fray, CEO Scott Boatwright believes the company can double that goal globally in the next 10 to 15 years. Chipotle’s 10-year model shows about 8-to-10% new restaurant growth, which is actually a bit slower than he anticipated just a couple of years ago.
“I thought at some point we would probably push up into 400 (net new) restaurants annually. I have since changed my mind and decided 350s are really solid numbers,” he said during a session with Nation’s Restaurant News’ Editor-in-Chief Sam Oches at last week’s CREATE event in California. “We'll grow in the U.S. at about 350 restaurants for the next 10 years, and then we'll layer on international growth through partnerships and equity-owned over that same time. I think 350 is healthy.”
The reason he’s more comfortable with that slightly lower forecast is because it better fits the pace of Chipotle’s talent pipeline.
“You can never grow faster than your people capabilities will allow. You’ve got to make sure you've got (supply chain) appropriately resourced, but at the end of the day, it's the quality of people you're developing and onboarding, and what your culture can support to help you grow,” Boatwright said. “Where brands get in trouble most often is when they haven't given thoughtful consideration to leadership development and succession planning in the most meaningful way to support the growth that's ahead, or they underinvest in people, not having ready-now capable folks to take on new opportunities.”
Shortly before Boatwright joined Chipotle in 2017, the company was growing faster than its people capabilities would allow, he said. It slowed development a bit in 2018 to catch up. The company designed leadership classes for above-restaurant leadership positions like district managers, directors, and vice presidents. Every above-restaurant leader was then brought to Denver for a full week of immersion, learning about their respective position’s top five accountabilities (each position has a different five).
“If you execute on your top five at a high level, you're going to be successful at Chipotle Mexican Grill. If you execute on your top five better than the person standing next to you, you're likely going to get promoted. If you don't execute on your top five, you will not likely work at Chipotle Mexican Grill,” he said. “People need to know very clearly what are the things (they’re) being held accountable for and watch them rise up and do very great things.”
When employees don’t know what their expectations are, they either flounder or disengage, he said.
“We built the entire field organization on this (accountability) premise, and it has served us incredibly well for 10 years,” Boatwright said. “Clear is kind. Clarity is important.”
The answers are in the restaurants
Frontline employee development is also critical for Chipotle as it aspires to $4 million average unit volumes, from about $3.1 million at the end of 2025. This is Boatwright’s bailiwick; he came up through the ranks as an operations guy, including senior vice president of operations at Arby’s and COO at Chipotle starting in 2017. He has a quote that is visible from the boardroom that says, “The answers are in the restaurants.” It is meant to remind him and his executive team the importance of prioritizing frontline employee training and staying nimble to consumers’ demands.
“It’s not easy. We have 135,000 people that work at Chipotle Mexican Grill,” Boatwright said. “But if you spend time in your business talking to the folks closest to the guest, you can understand where the pain points for the team member, where the pain points or friction points are for the consumer, and you just begin to knock those down one at a time in the most clever and innovative way that you can.”
In the second quarter of 2022, the company launched its “Project Square One” initiative aimed at retraining its crew on the fundamentals of the business after the entire industry was impacted by a historic labor shortage. The point was to get back to the basics, understanding what might be missing from the Chipotle customers’ experience and tweaking employee training accordingly. The initiative continues to evolve each quarter, with its most recent campaign called “Say Yes to the Guest,” which is, essentially, encouraging team members to give the guests whatever they ask for.
“You are no longer allowed to say ‘no’ to a Chipotle guest. I literally said if someone wants to buy a chair in the dining room, you figure out how to ring it up,” Boatwright said. “One beautiful thing about the Chipotle customer, they're not indifferent. They either love us and they love us fully, or they're mad at us and they're mad at us fully because they expect us to be better. Most brands today battle indifference with the consumer. That's not my issue. But what we have to do is ensure that we're giving a great experience to every consumer that walks in that door because that is the expectation.”
Contact Alicia Kelso at Alicia.Kelso@informa.com
Follow her on TikTok: @aliciakelso
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