It’s been nearly a decade since McDonald’s sold off its investment in Chipotle, a move it has some cause to regret. The fast-food giant has stagnated while its former subsidiary has exploded in popularity. An exhaustive oral history of the casual Mexican food chain, published by Bloomberg, reveals some of the ways McDonald’s tried to change Chipotle during their eight-year partnership.
“I would think of it in terms of McDonald’s being the rich uncle and Chipotle as the petulant nephew where we take the money and are grateful but are stubborn and strong-willed enough that we’re going to do what we want with it anyway,” communications director Chris Arnold told Bloomberg.
Here are some of the changes the company resisted or rolled back.
From Chipotle COO Gretchen Selfridge:
Bless their hearts, McDonald’s had a lot of great suggestions, and we were always polite about it. They really wanted us to do drive-throughs. They really wanted us to do breakfast. But we just really didn’t do any of that.
This one doesn’t actually sound too awful from a customer perspective. The company actually tested out breakfast at one point after splitting up with McDonald’s, only to decide against a broader rollout.
But a drive-through would have thrown a wrench into Chipotle’s incredibly efficient service model. And it would have been difficult to maintain the extremely high level of customization that’s part of the chain’s appeal. Chipotle has introduced only one additional menu item, a braised tofu filling called Sofritas, in the past 20 years.
According to the Bloomberg piece, investors were pushing the company to try out some options for co-branding the concepts. But the fact that chain was partially owned by McDonald’s already was something of a conflict with Chipotle’s commitment to sustainable food. Putting them in the same building would have been even stranger.
One McDonald’s executive wanted the company to emulate competitor Baja Fresh by adding the word “fresh” to the Chipotle name.
“I remember Steve had a very non-tactful, politically incorrect response: ‘Well, that’s a bunch of you-know-what. Why would we do that? It doesn’t make any sense,'” co-CEO Montgomery Moran said.
Regardless of where you are in the country, the menu at Chipotle is exactly the same. It’s one of the restaurant’s strengths. But when it began to expand more aggressively around the country, McDonald’s pushed for menu variation, like adding barbecue in Kansas City. That would have made for a pretty strange burrito.
And it risked the menu bloat that has become a signature complaint of McDonald’s franchisees.
McDonald’s has highly restrictive rules for its franchisees, for instance forbidding them from owning any other kind of business. It was so excited about Chipotle that it made an exception for the first time, which led to eight franchised restaurants. The experiment didn’t go well.
“What we found at the end of the day was that culturally we’re very different,” Chipotle founder and co-CEO Steve Ells said. “There are two big things that we do differently. One is the way we approach food, and the other is the way we approach our people culture. It’s the combination of those things that I think make us successful.”
Chipotle ended up expensively buying the franchisees out. And it hasn’t experimented with the concept since; all of Chipotle’s restaurants are under the company’s ownership.
Based on recent sales data, it seems ignoring some of the advice it got while under the ownership of McDonald’s was the right thing to do.