Chipotle brand is seen close to the restaurant in Chicago, United States on October 19, 2022.
Jakub Prozycki | Nurphoto | Getty Images
Chipotle introduced Tuesday it has signed an settlement with Kuwait-based Alshaya Group, its first-ever franchise partner, to open locations in the Middle East subsequent 12 months.
Chipotle at present has simply over 50 locations in Canada and Europe. All are firm owned and operated, as are its roughly 3,200 U.S. locations. The Alshaya settlement marks the first time Chipotle has enlisted a neighborhood franchise retail operator because it strikes into a brand new market.
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Chipotle CEO Brian Niccol instructed CNBC in an interview that the preliminary plan calls for 2 locations every in Dubai and Kuwait, with precise locations but to be decided.
The Alshaya Group, which works with different main manufacturers together with Starbucks, Shake Shack and Texas Roadhouse, was the proper match for the deal given its confirmed market expertise and dedication to Chipotle’s “Food with Integrity” proposition, Niccol mentioned.
Keeping elements recent and actual, with native menu tweaks that echo the U.S. expertise might be key, he added.
“They’ve bought nice manufacturers, nice operations, nice individuals applications, which simply gave us confidence that they’d give you the chance to execute the Chipotle proposition successfully in the Middle East,” Niccol mentioned.
In evaluating the Middle East market, Niccol mentioned it was essential to partner up to guarantee success in all the pieces from actual property to hiring to provide chain.
A Chipotle commercial in Arabic to announce the Company’s partnership with Alshaya Group.
Source: Chipotle
Niccol mentioned if the first few Middle East locations are profitable, there’ll hopefully be tons of extra in the area down the line. He added the settlement may function a brand new mannequin as the firm appears to be like to different markets.
“As we glance round the world, we’ll be evaluating all the components of what makes Chipotle nice and if there’s an space the place we imagine we want a partner, then we’ll think about a partner for it,” Niccol mentioned.
While the model has enlisted a franchise partner in this particular enlargement journey, do not count on the franchising alternative to come up in the U.S. Niccol mentioned there’s “no intention” to pursue that path proper now.
“Our return on invested capital in the U.S. is industry-leading,” he mentioned. “We’ve bought the steadiness sheet and capital obtainable the place we are able to deal with the development with our personal capital functionality, and I feel we have demonstrated the potential to function eating places successfully.”
Chipotle inventory is up over 50% in 2023 and is one in all the finest performers in the restaurant sector.
