customers have been gravitating to fast-casual restaurants. In 2004, the fast-casual segment generated about $7.2 billion in sales (representing 2.3%
of the industry), according to Technomic, Inc., a national consulting and research firm, and, based on the data prepared by Technomic, is the fastest growing segment of the restaurant industry.
Indeed, in 2004, sales in the fast-casual segment grew 12.8%, compared to 7.2% for the industry as a whole, and Technomic has forecast such sales to grow at a compound annual growth rate
of between 10.8% and 12.5% from 2004 to 2009, compared to 5.6% for the industry generally.
Making and Selling "One Burrito At A Time": Store Management And Operations
People With Passion. We value the individuality of our company, our employees and our customers, which we believe results in
a management, operations and training philosophy distinct from that of our competitors. We make an effort to hire employees who share a passion for food, and who will operate our stores in a way that
is consistent with our high standards but that allows each of their unique personalities and strengths to contribute to our success. To this end, we invite our employees to share their ideas on how
best to serve our customers. We think this inspires our managers and crew to have pride in their work. We also produce training materials that require thought on the part of our employees, rather than
providing rote, step-by-step scripts or rigid policy manuals. Through our culture, diversity and language programs that we provide in all of our markets, we teach English to
Spanish-speaking workers and Spanish to English-speakers, which helps staff to better serve customers and makes for tighter crews. This program helps people feel more comfortable to grow and develop
skills that help them both at work and in their personal lives.
Importance of Methods and Culture. Although we have many stores, we believe that our departure from the automated cooking
techniques used by many of our competitors sets our vision and our food apart. Our crews use classic professional cooking methods, including slicing, marinating and grilling our meat ingredients and
hand-chopping many of our vegetables, in kitchens resembling those of high-end restaurants. Everyone, including our store managers, spends his or her first three weeks working
solely with food and learning those techniques, and we spend a significant portion of time ensuring that each crew member learns how to prepare and cook our food properly. Despite our more
labor-intensive method of food preparation, we believe that we produce food with an efficiency that enables us to compete effectively.
The Front Line is Key. Our store and kitchen designs intentionally place crew members "up front" with customers to reinforce
our focus on service. Our employees are encouraged to have genuine interactions with customers no matter what they are doing, whether preparing food or serving customers during our busiest period. We
focus on attracting and keeping people who can replicate that experience for each customer "one burrito at a time." We provide each customer with individual attention and make every effort to respond
to customer suggestions and concerns in a personal and hospitable way. We believe our focus on creating a positive and interactive experience helps build loyalty and enthusiasm for our brand among
store managers, crew members and customers alike.
The Basics. Each store typically has a store manager, an assistant manager and as many as 23 to 25 full and
part-time crew members. We generally have two shifts at most of our stores, which helps us better predict our store payroll expenses and in return provides our employees with more stable
and predictable work hours. We tend to have more employees in our busier stores. We cross-train our employees, with a view to creating depth of competency in our critical store functions. Consistent
with our emphasis on customer contact, we encourage our store managers and crew members to welcome and interact with customers throughout the day. And although they may increase our labor costs or
general and administrative expenses, we believe that the benefits we provide to our employees, which include language training and our company car program for longer-term store managers, help us to
attract and keep good store managers and crew members.