The beleaguered fast-casual Mexican food company is exploring other types of cuisine, including burgers. Will it be enough to pull the chain out of the doldrums?
On the heels of a food-safety crisis that’s taken a big bite out of its restaurant sales, Chipotle Mexican Grill Inc. is making moves to develop a hamburger restaurant chain.
The Denver-based chain filed a trademark application for “Better Burger” with the U.S. Patent and Trademark Office on March 11.
“[A burger chain is] a growth seed idea we are exploring,” Chipotle representative Chris Arnold told Fortune in an email. “We have two non-Chipotle growth seeds open now — ShopHouse and Pizzeria Locale — and have noted before that the Chipotle model could be applied to a wide variety of foods.”
ShopHouse is Chipotle’s Southeast Asian-inspired fast-casual restaurant with 14 locations in the United States, according to ABC News. Chipotle also has a “majority ownership interest” in Pizzeria Locale, which has four U.S. restaurants right now.
“We are encouraged by the progress” these concepts are making, Arnold told ABC News. “They are serving delicious food and providing a really great experience.”
Although Chipotle has experienced early success with ShopHouse, and to some extent Pizzeria Locale, RJ Hottovy, a senior restaurant analyst at Morningstar, told ABC that the company’s move to further diversify by joining the burger business may be more difficult.
“I don’t think this is the move that’s going to solve all their issues,” Hottovy said about “Better Burger” trademark application.
Chipotle has more than 2,000 fast casual Mexican restaurants worldwide. The chain — which touts fresh, GMO-free ingredients and allows customers to personalize their orders — had been an increasingly popular choice with diners for several years, but it was rocked by six confirmed foodborne illness outbreaks in the United States in the second half of 2015, including E. coli, salmonella and norovirus.
Chipotle’s sales in the fourth quarter of 2015 dropped by 15 percent. Although the company has since changed its food safety practices, many diners have yet to return. According to Fortune, the company’s January sales plummeted by 36.4 percent and February sales were down 26.1 percent.
Chipotle has rolled out a series of promotions to get people back in its restaurants, including coupons for free burritos (this deal has ended) and online games for free guacamole and chips (deal good until April 10.)
Check out “Chipotle Rolls Out More Freebies to Woo You Back“.
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