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CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/05/2005
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the level of McDonald's ownership, and the relevant suppliers and service providers could decide to stop giving us beneficial pricing even if McDonald's still owns a substantial equity stake in us.

        As we begin to increase our independence from McDonald's, we may have to seek new suppliers and service providers or enter into new arrangements with our existing ones, and we may encounter difficulties or be unable to negotiate pricing or other terms as favorable as those we currently enjoy, which could harm our business and operating results. However, because we currently have not begun to negotiate new or amended contracts with suppliers and service providers, we cannot now quantify with greater certainty potential increases in our expenses. Furthermore, as a public company, in each of 2006 and future years we expect to incur a few million dollars of legal, accounting and other expenses that we did not previously incur as a subsidiary of McDonald's. See "Certain Relationships and Related Party Transactions."

    We have no independent operating history as a large company, which makes our future business prospects difficult to evaluate.

        We have been a subsidiary of McDonald's since 1998, which has affected the way we operate and manage our business. Because we have no independent operating history as a large company, our historical results may not be indicative of our future performance. Our future results depend on various factors, including those identified in these risk factors. We may not remain profitable.

    Our growth rate depends primarily on our ability to open new stores and is subject to many unpredictable factors.

        We may not be able to open new stores as quickly as planned. We've experienced delays in opening some stores and that could happen again. Delays or failures in opening new stores could materially and adversely affect our growth strategy and our expected results. As we operate more stores, our rate of expansion relative to the size of our store base will decline. In addition, one of our biggest challenges is locating and securing an adequate supply of suitable new store sites. Competition for those sites in our target markets is intense, and lease costs are increasing (particularly for urban locations). Our ability to open new stores also depends on other factors, including:

    obtaining financing and negotiating leases with acceptable terms;

    hiring and training qualified operating personnel in the local market;

    managing construction and development costs of new stores at affordable levels, particularly in competitive markets;

    the availability of construction materials and labor;

    the availability of, and our ability to obtain, adequate supplies of ingredients that meet our quality standards;

    securing required governmental approvals (including construction, parking and other permits) in a timely manner; and

    the impact of inclement weather, natural disasters and other calamities, such as hurricanes Katrina and Rita in 2005.

    Our failure to manage our growth effectively could harm our business and operating results.

        Our plans call for a significant number of new stores. Our existing store management systems, financial and management controls and information systems may be inadequate to support our expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain store managers and crew. We may not respond quickly enough to the changing demands that our expansion will impose on our management, crew and existing infrastructure. We also place a lot of importance on our culture, which we believe has been an important contributor to


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