Ells: Cheap strip mall leases and assembly lines drove unprecedented ROI
Steve Ells · Chipotle: Steve Ells · Oct 30, 2017 · at 28:03
Chipotle founder Steve Ells explains to Guy Raz how Chipotle's early unit economics differed fundamentally from traditional freestanding fast food chains.
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“With Chipotle, we were going into strip malls. Often in the inexpensive center units, not the more desirable end caps. This was early on. So the investment was very, very modest. And our production system or that our service format really was an assembly line. And as volumes increased, as we served more customers, you would get you know, a higher and higher margin, a higher contribution margin. And so The resulting returns on investment were extraordinary, and again, nothing like this in the restaurant industry at the time.”
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