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SEC Filings

CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/23/2005
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When a Chain Isn't a "Chain"

        When Chipotle opened its first store in 1993, the idea was simple: demonstrate that food served fast didn't have to be a "fast-food" experience. We tried to avoid using a formulaic approach when creating our experience and looked to fine-dining restaurants for inspiration. We use high-quality raw ingredients, classic cooking methods and a distinctive interior design, and have friendly people to take care of each customer—features that are more frequently found in the world of fine dining. When we opened, there wasn't an industry category to describe what we were doing. Some 12 years and more than 460 stores later, we compete in a category of dining now called "fast-casual," the fastest growing segment of the restaurant industry, where customers expect food quality that's more in line with full-service restaurants, coupled with the speed and convenience of fast food.

        A lot of what we do can be related to our namesake: the chipotle pepper. A chipotle pepper is a jalapeño pepper that's been dried, then smoked over mesquite, transforming its simple taste into a richly nuanced, smoky flavor. We've used that characteristic of the chipotle as an inspiration in all of the elements that shape the depth of flavor and nuance in what we do at Chipotle—great food accessible at reasonable prices, genuinely friendly people providing real service and a stylish atmosphere.

What We Do Really Well

        We try to do a few things really well, and we plan to keep this intentionally focused strategy as we grow. We transform our food in the same way the jalapeño is transformed into a chipotle, elevating basic raw ingredients into food that's richer and more sophisticated through our recipes and cooking techniques. Our store design also transforms simple materials in distinctive ways, giving our stores a style that's more architectural in nature and less dependent on standardized design elements to influence the customer experience. We respect our employees and invite them to share their ideas on how to best serve our customers, which we think inspires them to take pride in their work and increases their dedication to our customers and our company. From our focused menu to the uncomplicated flow of our stores, simple but thorough management and operations practices and a comparatively small inventory (about 130 items on hand, including things like chicken, steak, napkins and forks, compared to 1,000 or more in some other fast-food establishments), we think that keeping things simple helps us focus on serving great food.

    "Food With Integrity"

        Our focus has always been on using the kinds of higher-quality ingredients and cooking techniques used in high-end restaurants to make great food accessible at reasonable prices. But as we've grown, our vision has evolved. While using a variety of fresh ingredients remains the foundation of our menu, we believe that "fresh is not enough, anymore." "Fresh" is just a starting point. Now we want to know where all of our ingredients come from—how vegetables are grown and animals are raised—so that we can be sure they are flavorful while understanding the environmental and societal impact of our business. We call this idea "food with integrity," and it guides how we run our business.

    Using higher-quality ingredients.  We use a variety of ingredients that we purchase from carefully selected suppliers. We concentrate on where we obtain each ingredient, and this has become a cornerstone of our continuous effort to improve our food. For example, we only use naturally raised pork, and other ingredients we use include naturally raised beef and chicken, as well as organically grown and sustainably grown produce, as described below under "—"Hours to Prepare, Seconds to Serve": Menu and Food Preparation." We continue to investigate using even more naturally raised, organically grown and sustainably grown ingredients, in light of pricing considerations. In all of our stores, we make our guacamole, tomato and corn salsa daily, using what we believe are the best available ingredients. We hope to be at the forefront in creating larger markets for these higher-


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