The company selected for our financial analysis project is Chipotle Mexican Grill. Chipotle (for short) is a company that is a major player in the fast food and restaurant industry. The name “chipotle” is derived from the Mexican Spanish name for a smoked, dried Jalapeno pepper. The restaurant sells large burritos and bowls in an assembly line production system where all the condiments are arranged and all the customer has to do is request what they want their burrito to consist of. This in turn lends itself to an air of individuality (creating multiple combinations and choices for the clientele). The Corporation trades under the ticker symbol CMG on the New York Stock Exchange. The most recent Fiscal Year End …show more content…
Chipotle eateries have always seemed to be made up of workers that are of Hispanic descent. This has contributed to maintaining its authentic Mexican feel and look. However in 2010, the U.S Immigration and Customs Enforcement audited the company’s restaurants, and found that some employees had been hired using fraudulent documents. This would imply that the company was doing its due diligence in its hiring process or had loopholes in its background checks. This led to the termination of employment for 450 employees in its Minnesota restaurants. Another 40 employees in their Washington D.C restaurants were also let go. The investigation has now led to litigation. This has cost the company money and resulted in its missing it 2011 2nd Quarter estimates. The company in a bid to keep its restaurants staffed, embarked on an extensive employment drive which has encouraged work place diversity. The downside to this shift is that the new workers did not have sufficient training and went straight to work which has led to a slightly different taste in their menu and work place inefficiency. The solution to this problem would be allow for a longer training process to ensure new employees are fully trained and well prepared for the rigors of “assembly line” food service.
A third challenge facing Chipotle is the issue of long wait lines in peak hours of service (lunch and dinner times). These long lines can be attributed to the fact