Chipotle Mexican Grill: Where Does the Money Go?

The first store in 1993.
The first store in 1993.
Even Mitt Romney eats there!
Even Mitt Romney eats there!

One of the hottest recent franchises is the Chipotle Mexican Grill, sort of a faux authentic Mexican food in a rapid cafeteria type service. Make no mistake about it, it is good food and a step above fast food in quality and health. As you enter the line, a server will ask you what do you want. The most popular is the burrito, unlike at Taco Bell, where they make it in the back, at Chipotle, they make it in front of you and ask what it is you want in it. All the usual condiments and choices are there and you can even ask for double amounts of chicken, meat, pork, brown or white rice etc. For only $6.25 and about 600 calories, you have a super sized burrito that is delicious. No wonder the franchises are booming, what a deal when you consider a super burrito sells for $8-9.

From the looks of the interior, start up costs seem to minimal, there is just basic accommodations to enjoy your food. It all began by a college student, Steve Ellis, in Denver, Co. back in 1993. The student bought a former ice cream store for $85,000 and then thought about what to serve in the way of fast food. The burrito came to mind and fresh ingredients were used. It was quite a popular place on campus.

Since 2009, the Chipotle franchise has doubled its revenue and profits each year. But when shareholders met and voted about financial restructuring, they were flabbergasted and the amount of money the two CEO's (the originals from 1993) are making: Each one earned $25 million. Each one is paid more than the CEO of ATT, Boeing, Ford. Together, the equal the Oracle's founder, who earns $100 million a year.

Chipotle's shareholders voted against the current pay structure that they call "reckless" and does nothing to insure lower level managers income is adequate to retain them. One called said, " It is way out of whack". Even the shareholders consider the amount of money the CEO's are making criminal causing anger at the very low levels, down to the store levels. But, Chipotle is the 11th rated franchise out of 250.

While the food is good and service is fast, the people who work there make peanuts compared to CEO's. The staring wage at most places is $10-11 hr. The store manager makes a mere $21,000 a year (yes, you heard me right). A manager would have to work 1000 years to earn what the CEO earns in one year. While it is possible for some managers to earn up to $100K, the reality is that of the 1600 stores so far, few ever do. Compare this to In and Out Burgers where a single store averages a million dollars a year ins sales.

The shareholders plan to greatly reduce both CEO's annual pay to cut the disparity between the have's and the have nots.

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