Episode 508: Chipotle CEO Scott Boatwright on 4,000 Restaurants and Keeping Customers Craving More

Thank you, Kristen. Happy to be here today and happy to talk about our great brand. When you look at Chipotle in the present day, opening its 4,000th restaurant in Manhattan, Kansas, it's hard not to think about the brand's evolution since its first location in Denver back in 1993.

Now, if you think about it, Chipotle over its 32, 33 year history, it is an impressive feat to really build something so unique and so special that had such extraordinary fandom from its origins to where it is today. When Steve Ells founded Chipotle, it was really an attempt to find a way to generate cash so he could open a fine dining restaurant. And so what he found was lightning in a bottle and really started this category that we enjoy today called fast casual and found a way that people wanted to eat before they knew that's how they wanted to enjoy their food. And so either the delivery experience and then the food ethos was really born in that very day in 1993. And that's something we pay homage to and celebrate today. Our 4,000th restaurant on our way to 7,000 restaurants in North America is a huge milestone for us, but it's only a stepping stone in the journey that we're on today.

You know, we continue to accelerate development in the organization over the past 7 years, and we lean into growth in this brand in probably a more meaningful way than most brands do today. We'll grow this year at about 9% new restaurant growth. Next year will be around the same benchmark and that will include partner operated restaurants in other countries which we can get to in a moment. But if you think about the economic value that that generates or creates for our organization, it is probably best in class, at least best in the industry, and the economic returns at 60% year 2 same store return, I'm sorry, return on cash is just impressive.

Yeah, it's a great question. You know, as you think about the people that we have in the organization today and how incredibly passionate we are about our brand, it is almost palpable when you go into one of our restaurants and talk to one of our team members about their everyday life and many of them will meet you with visible emotion in their eyes to tell you how Chipotle has changed their lives. And so if you think about the past many years as we've leaned into this idea of cultivating a better world, we are really grounded in this north star called food with integrity. We are changing people's lives in many unique and different ways as we continue to grow the great brand. But I'll tell you, when you navigate turbulent economies or downturns that are cycles that you try to manage through, you become stronger as a team and you lean into those moments to try to accelerate performance. And we have the ability because of the strength of our economic model to really invest in down cycles. Even in what we're experiencing today in 2025, which was a challenging year for the industry at large, we continue to invest through that cycle and invest in people through their development, invest in their growth, invest in new restaurant growth and how we think about the brand long term. And we always exit those cycles, those down cycles, stronger than we entered. And so I think it takes a strong team, a strong culture, and a north star and a purpose that is meaningful to navigate tough times.

You know, I started this career in my early 20s and I actually started in fine dining and then moved over to quick service restaurants, which is quite a leap and it's a pretty significant shift. What I learned is I was actually quite good at it. And so when I say good at it, meaning I had a knack for building and developing great teams and then creating the right environment for those teams to be hyper successful. And I replicated that model as I continued to move up through the various hierarchy in operations leadership. And that really culminated in the opportunity that came to me in 2017 when Steve Ells called me up and asked me could I come help and support what he was trying to accomplish then and really get the brand back on its front foot. And so I knew what my skill sets were, uniquely suited to solve the challenge then. And we navigated what I think was a really challenging time for the brand pretty successfully and we went on a really nice run from 2017 till today. And so when I say a nice run, meaning the growth of the brand both in organic same store restaurant sales as well as new restaurant growth and people development.

So, we partnered with some outside firms a couple of years ago to really create bespoke experiences for our consumers specifically in digital commerce. And so when we are lucky enough to have consumers join our loyalty program, we monitor their behaviors and their patterns and try to bring or offer them things that are unique and special that are tailored specifically for them through the mobile or loyalty app, which I think is unique to our brand. There's more work to be done there to really refine the algorithms to really create unique experiences that are AI generated versus manually generated to really create again experiences that you don't traditionally get at other fast casual brands today. And really continue to drive digital commerce.

Yeah, you know, it's something that has obviously evolved as the program has evolved over the last many years. We leaned into this summer of extras this past summer to understand how can we engage the consumer in a more meaningful way and we put together a program that included tiering or badging or milestones that really drove outsized performance in the digital system for us this summer. So, we know that it's a pretty significant unlock if we can engage the consumer, create unique experiences for them. And we also offer them access to new promoted items that we bring into the business early, and so they take advantage of those. We lean into ideas that we generated around free, which offers our loyalty program members free offerings that bring them in. We think what we do is probably best-in-class but we also think we can be better.

There's more we can do as it relates to personalization and we continue to again drive this AI generated content that is really unique for every user in the system because we have 45 million people that have joined the loyalty program. 20, 22 million are active today. I think there's an opportunity to recapture those that have joined the program that have maybe lapsed or potentially grab those that are at risk to bring them back into our funnel. And again continue to celebrate why Chipotle is unique and special. I think what we do at Chipotle is so unique to us and this idea that we bring in the best ingredients in the world with the best animal husbandry practices and then we prepare our products in restaurants with pots, pans, knives and cutting boards and stove tops leveraging classic culinary techniques. And so if you think about the core value proposition that is Chipotle, it is very unique. It is very special and we can deliver that. The average price of a chicken burrito today across America is still under $10. And I don't think there's anyone in the space that can even compete or come close.

We use it today and we've been using it in various components of the business, whether it was machine learning or true AI or talking about how we leverage generative AI in the future. Today we use it for forecasting, we use it for modeling. We are using an AI visioning system to help us get better at throughput at peak periods in our restaurants. Lots of conversation about how we use AI in the organization through our support functions. And then thinking through other use cases, potentially a restaurant manager co-pilot that'll help the restaurant manager be more efficient, be smarter, and able to put information at their fingertips in a much more efficient way.

So, we leverage a stage-gate process. You've probably heard us talk about it in the past. And everything has to move through that stage gate successfully. And we call the three greens as a successful LTO, meaning it's right for the consumer, it's right operationally, it doesn't add too much complexity, and it's right financially. And if it passes the three greens and it performs the way we want it to perform in the market test, and it makes it onto the national calendar at some point. Our culinary team back in Newport Beach are best-in-class, led by Neville Panthaki, who is a culinarian his entire life. And so we bring unique SKUs into our business that are on brand and that are on trend, I think is really important to meet a consumer need state. And once that gets through our stage-gate process it makes it onto a national calendar. We have historically done two LTOs in a given year. We are ramping innovation. This year in 2026 we'll move to a four LTO cadence. So think of one about every quarter. And we'll also offer throughout the year different sides and dips that will create unique experiences for the consumer as well. If you think about the brands that are winning in the space today, they're winning on innovation. They're winning on value as a price point, which is not something we do at Chipotle. And then they're winning on experiences. And I think we can be very competitive in this environment with our core value offering, with our LTO strategy and innovation on menu and how we think about our rewards consumers going forward.

It's important. What it does is it gives the active consumer another reason to come in and it brings new users to our brand around exciting flavors that they may not have access to in their restaurant portfolios today. And so, we typically have a step change improvement in transaction performance when we launch an LTO. And it's very sticky. Those consumers continue to repeat because they find the experience so unique and so special.

That's a critical component of what we do and throughput is very important to our business. And so when we test products in the system today, if they're too operationally complex, no matter how great that product may be, we just can't launch it. A prime example of that is one of your favorites, Kristen, is the quesadilla. And we tried many different ways to create a quesadilla experience on the main line in our restaurants. And it was just too cumbersome or too operationally complex. And so today, you can only get the quesadilla through our digital channels. It is not available in restaurant unless you ask for it nicely and a team member has the opportunity to make it for you. But we are very thoughtful about innovation that we bring into the system and we're thoughtful of how our team members will have to interact with the product and deliver the experience to maintain efficiency down the line.