Chipotle announced on Tuesday that it has partnered with Alshaya Group, a leading franchise retail operator based in Kuwait, to open Chipotle locations in the Middle East in the coming year.
Currently, Chipotle owns and operates over 50 locations in Canada and Europe, as well as approximately 3,200 locations in the United States. This partnership with Alshaya Group is the first time Chipotle has chosen a local franchise operator as it expands into a new market.
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Chipotle CEO Brian Niccol spoke with CNBC and revealed that the plan is to initially open two locations each in Dubai and Kuwait, with specific sites yet to be determined.
The decision to partner with Alshaya Group was driven by their track record of success with other major brands like Starbucks, Shake Shack, and Texas Roadhouse, as well as their alignment with Chipotle’s commitment to “Food with Integrity.” Ensuring fresh, real ingredients and incorporating local menu adjustments to reflect the U.S. experience will be crucial.
Niccol stated, “They’ve proven themselves to be great in terms of brands, operations, and people programs. This gave us the confidence that they can effectively execute the Chipotle proposition in the Middle East.”
When evaluating the Middle East market, Niccol emphasized the importance of partnering to ensure success in various aspects, including real estate, hiring, and supply chain.
A Chipotle advertisement in Arabic to announce the Company’s partnership with Alshaya Group.
Source: Chipotle
Niccol expressed optimism that if the initial Chipotle locations in the Middle East are successful, there could be hundreds more in the region in the future. This agreement could serve as a new model for expansion into other markets.
However, Niccol made it clear that while the brand has embraced franchising for this specific expansion, there are currently no plans to pursue franchising opportunities in the United States. The company has a strong return on invested capital in the U.S. and sufficient resources to support growth internally.
Chipotle’s stock has seen impressive growth, with a 50% increase in 2023, positioning the company as one of the top performers in the restaurant sector.
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