addition to the employees we have at each store, we also have area managers (who are responsible for between three and eight stores each) and operations directors (each of whom is
responsible for about 50 stores). Our four regional directors each supervise between one and three operations directors and report to our President and Chief Operating Officer.
Looking for New Opportunities: Site Development and Expansion
Our store locations are critical to our long-term success, and we devote significant time and resources to assessing each prospective site. We've
developed specific criteria (described below) to evaluate each site. We continuously review these criteria and adjust them as warranted by changing circumstances in our business or local operating
What We're Looking For. We primarily focus our search for sites on major metropolitan areas, particularly suburban and urban
areas with strong residential and daytime populations. Our demographic requirements include areas with at least 15,000 residents ranging in age from 18 to 49, a daytime population of at least 10,000
and a household median income above the national average. Preferred locations include shopping center end-caps and free-standing buildings near large intersections, residential
areas, offices, retail outlets, universities, recreational facilities and hospitals. We also consider various other factors, including traffic patterns, area restaurant competition, the likely effect
on sales of our nearby stores, parking, accessibility, potential store size and visibility. In larger metropolitan regions, we generally open stores in urban storefronts. We use a combination of our
own development staff and outside real estate consultants to locate, evaluate and negotiate new sites using these criteria. We use in-house demographic software to assist in our
evaluation, which we also use as our store lifecycle management system.
cost to open a Chipotle store depends on several factors, including the type of real estate, the location of the site and the amount of construction required. See "Management's
Discussion and Analysis of Financial Condition and Results of OperationsHow We Make MoneyExpanding Store Base." We generally lease the land where we build our stores. We
sometimes receive landlord development and/or rent allowances for leasehold improvements, furniture, fixtures and equipment.
Design Matters. We design each store individually to suit the space, and no two stores look exactly the same. This approach,
which is critical to our brand identity, allows us to build stores that are unmistakably Chipotle, while respecting the character of the neighborhoods where we operate. Whether we're in a historic
district in an urban area, or a suburban community with more restrictive zoning and similar requirements, we try to design and build stores that complement their surroundings, rather than overwhelm
them. The overall layouts, together with the sights and sounds of our food preparation, work together to contribute to our distinctive dining experience. We've even taken the fundamental and necessary
elements of any store, such as chairs, tables and lighting, and included them in our design aesthetic. Our stores don't use signs that say "Order Here" or "Pick-up Here," but instead rely on a natural
flow, based on the floor plan and architectural elements, to make the food ordering process intuitive. And our music is distinctive toowe select each song played in our stores to match
our design and our overall approach to the Chipotle dining experience. Even the design of our chairs and artwork, created by a Colorado artist, is unique to Chipotle. The design of our serving line
and our open kitchens also exemplify our vision, demonstrating our commitment to cooking fresh food. We strive to entertain our customers with our design and décor and provide a
distinct visual, auditory and olfactory experience.
Where You Can Find Us: Store Locations
At October 31, 2005, we and our franchisees operated 467 stores. Starting from 177 stores on January 1, 2002, we've expanded our store base
substantially since that time. For additional information on past and planned store openings, see "Management's Discussion and Analysis of Financial Condition and Results of OperationsHow
We Make Money: Restaurant SalesExpanding Store Base." The table