Chipotle Mexican Grill, Inc.

What does it do?

Chipotle is a fast-casual restaurant chain that lets you build your own Mexican-style meal — think burritos, tacos, and bowls piled with rice, beans, grilled chicken or steak, salsa, and guacamole. You walk down a line, point at what you want, and your meal is assembled in front of you in about 60 seconds. They run over 3,700 locations across the US, Canada, UK, and a handful of other countries. Unlike McDonald's, they don't franchise — Chipotle owns and operates every single one of its restaurants.

How does it make money?

Chipotle makes almost all of its money one way: selling food directly to customers in its restaurants and through digital orders. In its latest financial year, the company brought in $11.9B in revenue, up from $11.3B the year before — a 5% increase driven by a mix of new restaurant openings and more customers spending more per visit. Digital orders, placed through the Chipotle app or website, now make up roughly a third of total sales and carry higher average order values. There's no franchising revenue — no royalty checks from other owners — which means every dollar of profit flows from restaurants Chipotle itself runs.

Why do investors care?

The growth story here is straightforward: Chipotle believes it can roughly double its restaurant count to around 7,000 locations in North America alone, and it's opening new stores at a pace of about 300 per year. Each new restaurant takes time to ramp up but eventually generates strong returns — a key metric called restaurant-level operating margin (basically how much profit each location keeps after paying for food and staff) sits above 25%, which is high for the restaurant industry. For the thesis to work, Chipotle needs to keep opening locations without hurting quality, maintain customer loyalty as competitors like Cava and Sweetgreen grow, and keep a lid on food and labor costs.