Chipotle: What It Costs to Open — and Run — a Burrito Restaurant

A Chef With a Different Plan

Steve Ells set out to be a fine-dining chef. After he graduated from the Culinary Institute of America in 1990, he worked as a sous-chef at Stars, a well-known San Francisco restaurant owned by chef Jeremiah Tower. During those years, the taquerias of the city’s Mission District, with their giant burritos wrapped in foil, caught Ells’s attention, and he saw a chance to build a more efficient version of that kind of restaurant. His plan was practical: return to Colorado, open a burrito shop, and use its profits to pay for the upscale restaurant he really wanted to run.

A Loan, a One-Page Plan, and 850 Square Feet

Ells needed money to open, so he turned to his father, Bob Ells. Accounts of the amount differ: Bob later recalled that his son said he needed $75,000, while other published accounts describe an $85,000 loan. Before lending anything, Bob insisted on a business plan. The plan Steve produced fit on a single page. It laid out a worst case, a best case, and a middle case; covered costs, rent, and repayment of the loan; and estimated that the restaurant would break even by selling 114 burritos a day. It predicted a first-year profit of $24,000.

The location Ells could afford was a former Dolly Madison ice cream shop at 1644 East Evans Avenue in Denver, across from the University of Denver. It was tiny: about 850 square feet, with a small open kitchen and a cramped basement. Ells later recalled paying roughly $850 a month in rent. According to Ells, his whole business model grew out of those limits: a small space, inexpensive building materials, a modest investment, and an efficient assembly line for serving food. He has also said he made the restaurant simple to operate on purpose, since he didn’t plan to spend much time there.

From Opening Day to 1,000 Burritos a Day

Ells prepped food the day before the 1993 opening. On the first day, he had two prep cooks, and the wife of one of them helped serve customers. The original burritos weighed more than a pound and cost less than $5. Sales on day one totaled a few hundred dollars; on day two, they doubled. Then Bill St. John wrote a glowing review in the Rocky Mountain News. Business jumped. According to a 2015 oral history of the company, the restaurant began serving about 1,000 burritos a day, many times the 114 its plan required. Monty Moran, a college friend of Ells who later became Chipotle’s co-CEO, said first-year profit topped the plan’s estimate by so much that the plan was soon forgotten.

Instead of moving on to fine dining, Ells kept opening Chipotles. The second restaurant, in a building that had been a House of Pies, opened in 1995, and the third followed in 1996. Each new location needed its own startup money. In 1996, Ells’s parents raised more than $1 million from a small group of wealthy friends. In 1998, McDonald’s became an investor, committing about $50 million in the first year, and by 2005 it owned about 92% of Chipotle. That year, Chipotle reported that in 2004 it had spent an average of about $880,000 to develop and build each new restaurant, from about $700,000 for a suburban space in a row of stores to about $1.1 million for a free-standing building and $1.3 million for a city location. In 2006, McDonald’s spun Chipotle off as a public company, with shares first sold to the public at $22 each.

What It Costs to Run 4,000 Kitchens

Chipotle still cooks in every restaurant. Its annual report says crews use fresh produce, handle raw chicken on site, and rely on traditional cooking methods. In 2025, Chipotle brought in $11.9 billion in revenue, and by year’s end it owned and operated 4,042 restaurants, plus 14 international restaurants run by partners. The annual report groups the costs of running its restaurants into four lines (see the exhibit). Food, beverage and packaging covers the ingredients, drinks, and packaging for every order, and the prices of ingredients such as beef and avocados can swing up and down. Labor covers the wages and benefits of restaurant workers, which the company calls some of its most significant costs. Occupancy is the cost of the restaurant spaces, nearly all of which Chipotle leases. Other operating costs include marketing, delivery, and utilities; in the last three months of 2025, marketing alone equaled about 3.5% of sales. Beyond the restaurants, Chipotle reports general and administrative expenses, which include company-wide items such as performance bonuses and money set aside for legal matters.

Growth also brings startup costs on a much larger scale. In 2025, Chipotle opened 334 restaurants, 257 of them with a Chipotlane, a drive-through lane where customers pick up digital orders. Its income statement includes a separate line for pre-opening costs, the spending on new restaurants before they open, which totaled $49.5 million that year. Chipotle tells investors that every new restaurant comes with large startup expenses, that opening restaurants keeps getting more expensive as the costs of construction labor, materials, and equipment climb, and that a new location can need around 36 months to build up its sales and profits.

Where Things Stand

Ells handed the CEO job to Brian Niccol in March 2018. Niccol left in August 2024 to run Starbucks, and Scott Boatwright, Chipotle’s chief operating officer, became interim CEO and then, in November 2024, permanent CEO. The company is now based in Newport Beach, California.

Costs remain a big test. In 2025, Chipotle paid more for beef and chicken and faced new tariffs, but menu price increases and cost savings outweighed those pressures, so food costs fell slightly as a share of revenue. In February 2026, Chief Financial Officer Adam Rymer warned that margins would be under pressure in 2026 because Chipotle planned to raise prices by less than its costs were rising. In the second quarter of 2026, revenue grew 9.3% to $3.3 billion, mostly because of new restaurants. But food, beverage and packaging costs rose to 29.7% of revenue from 28.9% a year earlier, mainly because of inflation in beef and freight, and higher wages and bonuses pushed labor costs up as well. Chipotle’s restaurant-level operating margin, the share of revenue left after direct restaurant costs, fell to 25.2% from 27.4%. As of June 30, 2026, Chipotle had more than 4,200 restaurants and nearly 140,000 employees, and it planned to open 350 to 370 new restaurants in 2026, including 10 to 15 run by international partners.