Chipotle Might Be Opening Up A New Chain Of Burger Restaurants


Chipotle may open a chain of burger restaurants to help recover from disastrous drops in revenue.

According to Bloomberg, the Denver-based company filed a trademark application for the name “Better Burger” earlier this month.

Chipotle spokesman Chris Arnold told Bloomberg, “the Chipotle model could be applied to a wide variety of foods,” suggesting Better Burger would feature fresh ingredients and customized items like Chipotle's Mexican restaurants.

Arnold noted Chipotle already has “two non-Chipotle growth seeds open now -- ShopHouse and Pizzeria Locale.”

The first ShopHouse, a Southeast Asian food chain, opened in Washington, DC in 2011. The chain's since expanded to 12 more locations throughout DC, Los Angeles and Chicago, CNN Money reports.

Pizzeria Locale, which Chipotle claims to have a “majority ownership interest” in, has seven locations among Denver, Colorado, Cincinnati, Ohio and Kansas City, Missouri.

In its annual report filing, however, Chipotle stated it does not plan on further expanding these two concepts and it does not expect the two chains to “contribute to our growth in a meaningful way for at least the next several years.”

Chipotle is likely looking to take advantage of falling beef prices and the profitability of burger chains without wait staff.

Sales at such restaurants in the US reportedly increased to $76.9 billion in 2014 compared to $19.7 billion for Mexican restaurants.

One might assume the burger market is already saturated, but Technomic President Darren Tristano believes America's love of burgers leaves plenty of room for yet another fast-casual chain like Smashburger or Five Guys.

He told Bloomberg,

The burger chain would also maximize Chipotle's chances to recover from the massive financial damage it sustained thanks to a string of E. coli and norovirus outbreaks.

Beginning in late 2015, dozens of customers were sickened across 11 states, prompting Chipotle to temporarily close several restaurants and introduce new food safety precautions.

According to USA TODAY, the Centers for Disease Control and Prevention declared the outbreaks came to an end on February 1, but an employee of a Massachusetts Chipotle tested positive for norovirus earlier this month.

Chipotle stock reportedly dropped nearly 30 percent over the past 12 months as a result of the outbreaks, and the company's fourth-quarter net income reportedly fell 44 percent year-over-year.

The company will likely report a quarterly loss in April, its first since going public.

Citations: Chipotle Considers Opening Chain Under 'Better Burger' Name (Bloomberg), Chipotle files to trademark Better Burger restaurant name (CNN Money), Chipotle plans to open burger chain (USA TODAY)