be enacted in the future, how existing or future environmental laws will be administered or interpreted, or the amount of future expenditures that we may need to make to comply with, or to
satisfy claims relating to, environmental laws. While, during the period of our ownership, lease or operation, our stores have not been the subject of any material environmental matters, we have not
conducted a comprehensive environmental review of our properties or operations. We have, however, conducted investigations of some of our properties and identified contamination caused by third-party
operations; in these instances, the contamination has or will be addressed by the third party. If the relevant third party does not or has not addressed the identified contamination properly or
completely, then under certain environmental laws, we could be held liable as an owner and operator to address any remaining contamination. Any such liability could be material. Further, we may not
have identified all of the potential environmental liabilities at our properties, and any such liabilities could have a material adverse effect on our operations or results of operations.
We have three franchisees that operate eight of our stores. Each of them is also a McDonald's franchisee. We granted our initial franchises in April 2001
for two-year terms including leases for store property and equipment, and subsequently granted additional franchises with ten-year terms to qualified franchisees. Each
franchise includes the right to operate a Chipotle store at a particular address only. At the end of a franchise term, the franchise expires, and the franchisee has no unilateral right to renew or
extend the franchise (although we may agree with the franchisee to extend the franchise for an additional term). Each franchisee is obligated to operate franchised stores in accordance with our
operating standards and is obligated to allocate and spend specific amounts, as specified by us, on marketing of the stores, subject to our approval of all marketing materials.
Although franchising is currently not an important component of our strategy, we may decide to license more franchisees in the future. In the near term, however, we do not expect to
significantly increase the number of franchisees. In addition, if McDonald's ceases to own a majority of our outstanding
common voting stock or if we cease to be an affiliate of McDonald's, under the terms of our franchise agreements, our franchisees must either sell either their Chipotle franchise to someone who agrees
to perform their obligations under the franchise agreements (at fair market value determined in the manner provided in the franchise agreements) or sell their McDonald's franchise within
24 months after the relevant triggering event. If our franchisees don't sell either franchise within the 24-month period, their franchise agreements with McDonald's will terminate
At September 30, 2005, we had about 12,200 employees, including 1,200 salaried employees and 11,000 hourly employees. None of our employees are
unionized or covered by a collective bargaining agreement.
Our main office is located at 1543 Wazee Street, Suite 200, Denver, Colorado, and our telephone number is (303) 595-4000. As of
October 31, 2005, there were 459 company-operated and eight franchised stores in locations across the United States. See "Quality, Not Quantity: Store Locations."
We lease our main office and substantially all of the properties on which we operate stores. For additional information regarding the lease terms and provisions, see "Management's
Discussion and Analysis of Financial Condition and Results of OperationsContractual Obligations."
own nine properties and operate stores on all of them.