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Why Doesn't Chipotle Franchise?

Burrito and Chips

I’m a huge Chipotle fan and I’m not ashamed to admit it. I love a big fat carnitas burrito with every possible topping (is that even the right word for what you put on a burrito?) on it, especially guac. But every time I’m outside of New York I wonder why there aren’t more Chipotles out there. Sure there are a bunch (at the end of 2014 there were more than 1,700) but their numbers pale in comparison to other “fast food” giants like McDonald’s or Subway (they have more than 36,000 and 43,500 restaurants respectively). So why hasn’t Chipotle followed suit and gone the obviously successful franchising route?

A Brief History of Chipotle

The first Chipotle was started in Denver, Colorado in 1993 and the second store opened two years later solely on the cash flow from the first restaurant. By 1998 they had expanded outside of Colorado and McDonald’s invested into the growing restaurant chain. Despite the franchising giant’s investment Chipotle never followed suit and continued to expand through their direct ownership model.

So Why Don’t they Franchise?

Even though they could likely open many more restaurants, the reason Chipotle doesn’t franchise is pretty simple. Chipotle just doesn’t think they need to. In fact, they think that it would non-beneficial for them to franchise. They have traditionally maintained tight control over their restaurants and franchising would limit their ability to control the operations of all their locations. From a financial perspective, they also don’t have a pressing need to, with an operating income of nearly a half billion dollars.

Going Forward

Sorry to all of you barbacoa-loving franchise hopefuls out there but Chipotle doesn’t franchise now and it doesn’t look like they are going to anytime in the near future. They’ve stuck by their model for the past two decades and have been very successful in doing so. But the good news for you is that they aren’t the only options for food franchising out there. There are a ton of great restaurants that are looking for franchisees. If you’re interested, check them out here!

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To earn her certification, Garol and her 35 classmates completed a rigorous three-day CAPS course with the Greater Atlanta Home Builder’s Association. Each of the six-hour sessions focused on a different aspect of aging in place, including marketing and communication, designing and building strategies, and business management. After each course, participants had to pass an examination testing their knowledge. Garol’s completion of the CAPS course demonstrates both her advanced understanding of the aging in place process, and her dedication to providing her customers with quality mobility solutions.

Where Is The Best Location To Open Your Franchise?

One critical factor to consider when you are thinking about opening a franchise is whether your location is suited for a franchise and which franchise suits your area the best. One thing that makes this consideration slightly easier is the notion of franchise territories. Most, but not all, franchises in the US are set up so that they grant exclusive territorial franchise rights to their franchisees to help prevent the issue of geographic competition.

Spending and Tax Reform

The spending in the tax system exists in the form of special deductions, exclusions and tax credits. For example, individuals claiming a child credit of $1,000 per child have their tax bill reduced by that amount. They are in the same position they would be if instead of a tax credit to reduce their tax bill, the government wrote them a check each year of $1,000 per child. Similarly, a tax deduction for home mortgage interest expense reduces the homeowner’s federal income tax bill. That savings to the taxpayer (and “cost” to the government, that is, other taxpayers) could have been obtained via a check written to the homeowner.